Canada Social Security

[ruthc]

Have a client with a statement for Canada social security. I don't see any instructions for this. I think I include it under SS, but I am not sure where on the SS worksheet. Any Help? Thanks

[bgiez]

I've been adding it to

SS for so long I can't remember the cite. I know that I researched it when it first came up. Sorry I can't be more help.

[Burke]

Have a client with a statement for Canada social security. I don't see any instructions for this. I think I include it under SS, but I am not sure where on the SS worksheet. Any Help? Thanks

See Canadian Tax Treaty Pub 597, page 2. Treated same as US benefits.

[ruthc]

Found it!

Thanks for your input. I was just getting ready to post that I did find it.

[Roland Slugg]

See Canadian Tax Treaty Pub 597, page 2. Treated same as US benefits.

Either your eyesight is a whole lot better than mine, or we are looking at two completely different Pubs. The Pub 597 I looked at doesn't say one word about taxation of Canadian social security by U.S. residents. It's called "Old Age Security" there and is fully taxable in Canada. This country's taxation of social security benefits refers to United States social security benefits, not equivalent benefits from foreign countries.

I believe Canadian Old Age security benefits received by U.S. residents are fully taxable here. If this is not true, I'd welcome someone's posting an authoritative cite to the contrary.

[MRPLOW]

(CPP), (QPP), and (OAS) from Canada, are taxed in the same manner as Social Security benefits.

You have to look at the income code on the Canadian statement and then cross reference it to make sure that code matches one of the above descriptions.

If not it is taxable like a pension, and then you will possibly have foreign tax credit if taxes were paid to Canada on the income.

[New York Enrolled Agent]

I believe Canadian Old Age security benefits received by U.S. residents are fully taxable here. If this is not true, I'd welcome someone's posting an authoritative cite to the contrary.

Candian SS benefits are treated in the same manner as U.S. SS benefits. The cite you seek is IRS Notice 98-23 which contains, inter alia, the following:

HOW WILL MY BENEFITS BE TAXED UNDER THE NEW RULES?

[7] Under the new rules (that is, the 1997 Protocol), Canadian social security benefits paid to U.S. residents generally will be taxable, if at all, only by the United States. The benefits will be taxed at graduated rates on a net basis as if they were benefits paid under the U.S. Social Security Act. Thus, under section 86 of the Internal Revenue Code, the portion of the benefits that is taxable will depend on each recipient's income level. ...

[Burke]

Either your eyesight is a whole lot better than mine, or we are looking at two completely different Pubs. The Pub 597 I looked at doesn't say one word about taxation of Canadian social security by U.S. residents. It's called "Old Age Security" there and is fully taxable in Canada. This country's taxation of social security benefits refers to United States social security benefits, not equivalent benefits from foreign countries.

I believe Canadian Old Age security benefits received by U.S. residents are fully taxable here. If this is not true, I'd welcome someone's posting an authoritative cite to the contrary.

Understand your confusion. I was quoting from Pub 597 which I had in my file (Rev. Feb 2006) which very clearly states this on page 2. I see the newer edition omits this info, but I do not believe the procedure has changed. On the IRS website under Canadian & US Tax Issuers, Help & Resources, it spells out the same thing under Tools-&-FAQs.....U.S.-Aliens.... address too long to post here. Perhaps it is now included in Pub 519.

"If the recipient is a resident of the Unites States, the benefits:
.are taxable only in the US
.are treated as US social security benefits for US tax purposes, and
. are reported on Form 1040 on the line on which US Social Secuity beneftis would be reported."