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Entering Canadian Pension Income and Tax Withheld in Turbo Tax

Where do I input in TurboTax Canadian Pension Income and tax withheld, as per the Canadian's Employers completed NR4 Form, Income Code 39?  The background is that I am now a U.S. Citizen, but receiving Canadian Pension income for a few years that I worked for an employer in Canada.

 

I saw a few posts on this topic, but unless I missed it, I didn't see anything definitive.

 

Thank you!

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1 Best answer

Accepted Solutions
DaveF1006
Expert Alumni

Entering Canadian Pension Income and Tax Withheld in Turbo Tax

No.  You would enter this as other income and then report your taxes paid in the Foreign tax Credit to receive credit for the withholding tax paid. Here are the sequence of steps to report.

 

To report the income.

 

  1. Log into your account
  2. Select Wages and income>other income
  3. Miscellaneous Income, 1099-A, 1099>start
  4. Scroll to the bottom of the page to Other Reportable Income
  5. Other taxable income, answer yes
  6. Then give a brief description of the income and the $ amount listed.  Describe it as Canadian Foreign income'

Now to report the tax withholding for the Foreign Tax Credit.

 

  1. Open Turbo Tax
  2. Go to federal>deductions and credits>estimate and other taxes paid
  3. Foreign taxes >start
  4. Start answering questions. Make sure you answer the question correctly about if this is the first year you are making the simplified  election
  5. Answer the questions in the next screens until you reach a screen that talks about income type. indicate this is general category income. 
  6. Next screen is where you add the country your foreign income was earned in. 
  7. Next screen will ask you what your source income earned in that country. Here you will report the pension amount. Don't worry, this is not reported as income in your return but is used to determine the foreign tax credit.
  8. You will continue answering questions until you get to a screen that says foreign taxes paid to XXXX. Be sure not to list a date at the bottom beyond 12/31/2023 or you won't get the foreign tax credit and will show up as an error in your return

 

 

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5 Replies
Cynthiad66
Expert Alumni

Entering Canadian Pension Income and Tax Withheld in Turbo Tax

Per IRS Publication 915:

 

Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under the social security legislation of the United States.

 

In other words, if you're a U.S. resident, you'd enter your Canadian CPP and OAS benefits as though you'd received a Form SSA-1099 from the Social Security Administration.

 

The U.S.-Canada tax treaty also applies to the Québec Pension Plan (RRQ). Note that the agreement only addresses government-issued Social Security benefits, not money received from private Canadian pensions.

 

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Entering Canadian Pension Income and Tax Withheld in Turbo Tax

Thanks for the reply.  The Pension I receive from Canada is from a private party (General Electric), versus the government, when I worked at GE several years ago. Accordingly, based on your post, I don't think it is proper inputting the GE Canadian pension income / taxes paid from the NR4 Form in TurboTax, as if it was a SSA-1099.

 

To clarify my question, I appreciate any guidance on where I should input into TurboTax private party pension income and taxes paid, per the Canadian NR4 Form, Income Code 39.  

 

Thank you!

DaveF1006
Expert Alumni

Entering Canadian Pension Income and Tax Withheld in Turbo Tax

No.  You would enter this as other income and then report your taxes paid in the Foreign tax Credit to receive credit for the withholding tax paid. Here are the sequence of steps to report.

 

To report the income.

 

  1. Log into your account
  2. Select Wages and income>other income
  3. Miscellaneous Income, 1099-A, 1099>start
  4. Scroll to the bottom of the page to Other Reportable Income
  5. Other taxable income, answer yes
  6. Then give a brief description of the income and the $ amount listed.  Describe it as Canadian Foreign income'

Now to report the tax withholding for the Foreign Tax Credit.

 

  1. Open Turbo Tax
  2. Go to federal>deductions and credits>estimate and other taxes paid
  3. Foreign taxes >start
  4. Start answering questions. Make sure you answer the question correctly about if this is the first year you are making the simplified  election
  5. Answer the questions in the next screens until you reach a screen that talks about income type. indicate this is general category income. 
  6. Next screen is where you add the country your foreign income was earned in. 
  7. Next screen will ask you what your source income earned in that country. Here you will report the pension amount. Don't worry, this is not reported as income in your return but is used to determine the foreign tax credit.
  8. You will continue answering questions until you get to a screen that says foreign taxes paid to XXXX. Be sure not to list a date at the bottom beyond 12/31/2023 or you won't get the foreign tax credit and will show up as an error in your return

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
gregoryguthrie
Returning Member

Entering Canadian Pension Income and Tax Withheld in Turbo Tax

These two answers are contradictory.

And the current TurboTax tool has specific screens for entering Canadian SSA - labelled Canadian registered Pension Income.

However, The screens there "Canadian Retirement Summary" refers to RRSP & RRIF - not (CPP & OAS), and only has fields for interest income, dividends, and Capital Gains, but then also a list of income sources. I entered the CPP & OAS into two items in this area but the amounts don't show up as income.

Am I putting these into the wrong place?

And should instead just enter NR4 and NR4(OAS) unlabelled as SSA-1099 income?

AmyC
Expert Alumni

Entering Canadian Pension Income and Tax Withheld in Turbo Tax

CPP and OAS are best entered as 1099-SSA. The NR4 income should be converted to match what goes on the US tax return in the same place, as much as possible. Bank interest is clearly easier than retirement due to the state issues that can arise. 

@gregoryguthrie 

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