How to report Canadian RRSP withdrawal on US Tax return? Canada uses T4RSP

[JohnB5677 · Accepted solution]

You will post the Canadian T4RSP in the Retirement Plan and Social Security section of TurboTax.

Log into TurboTax

1. Go to Federal > Income & Expenses 
2. Scroll to Retirement Plans and Social Security
3. Choose Canadian registered pension. 
4. Post the amounts:
   • Gross Amount: Enter the total withdrawal amount 
     • (Box 16 on T4RSP).
   • Withholding Tax: Enter the Canadian tax withheld
     • (Box 30 on T4RSP).
5. You can now Claim a Foreign Tax Credit:
   • Go to Deductions & Credits 
   • Scroll to Estimates and Other Taxes Paid 
   • Under Foreign Tax Credit.
   • Select Passive Income as the type.
   • Choose Canada as the country.
   • Enter the tax withheld in the Foreign Taxes on Other Income section.
6. The US-Canada Tax Treaty allows for tax deferral 
   1. If a specific election was made in previous years.
   2. If this is a new, total withdrawal, it is taxable in both countries, with the credit offsetting the tax in the US.