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Reporting Canadian pension income

PostPosted: 29-Jun-2020 6:17pm
by mikestaxes55
Client has Old Age pension from Canada totaling $1558 USD. She has lived here for over 30 years and is a US citizen. My research tells me that this income should be reported on line 5a of the 1040 (the line where social security benefits go). She has Social Security benefits of $26,418 so I would be correct to put $27,976 in line 5a? I have a concern that the IRS is expecting to see $26,418 in that line from the SSA-1099. Could anyone alleviate my concerns? Thanks!

Re: Reporting Canadian pension income

PostPosted: 29-Jun-2020 6:52pm
by Joan TB
Including it on line 5a is correct. It is also entitled to the no-more-than-85% is taxable calculation.

Re: Reporting Canadian pension income

PostPosted: 29-Jun-2020 7:51pm
by HenryDavid
Agreed

Re: Reporting Canadian pension income

PostPosted: 29-Jun-2020 8:29pm
by AccTaxMan
Joan TB wrote:Including it on line 5a is correct. It is also entitled to the no-more-than-85% is taxable calculation.


Does that only apply to Canada? Lets say a US citizen has social security benefit from UK, Is he also eligible for the 85% cap?

Re: Reporting Canadian pension income

PostPosted: 30-Jun-2020 4:55am
by HenryDavid
Did you check the tax treaty?

Re: Reporting Canadian pension income

PostPosted: 30-Jun-2020 10:26am
by Joan TB
You have to look at the US/UK tax treaty which may or may not have the same provisions as the US/Canada tax treaty.

Here is a link:

https://www.irs.gov/businesses/international-businesses/united-kingdom-uk-tax-treaty-documents

I guess I am just a nerd, but I find these to be fascinating reading!

Re: Reporting Canadian pension income

PostPosted: 30-Jun-2020 1:51pm
by mikestaxes55
Thank you very much for confirming - I hope everyone has a safe and happy 4th of July - try not to do too many tax returns that day!