Question

How to report distribution reported on NR4 (code 39) on US Taxes? I'm reading conflicting posts on where to add both the distribution and the amount withheld by Canada.

Forum|Forum|3 years ago
April 6, 2023
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Enter the income as Canadian Registered Pension Income in the "Wages and Income" section using the "Retirement and Social Security" dropdown. The distribution is taxable.

Next use the "Deductions and Credits" tab and find the "Estimates and Other Taxes Paid" dropdown. There you can find the "Foreign Tax Credit (FTC)" topic to enter the Canadian withholding amount. Categorize the income as "General Income" in the FTC topic.

NOTE: Be sure to convert to US dollars. If the distribution was on a specific date, use a calculator like the one here. If the distribution was spread throughout the year, you can use the "Yearly Average" converter here.

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C

CHughes24Author

So if I understand this correctly, I enter the gross distribution as income using form 1099R AND enter the gross income distribution and the amount withheld under the deductions and credits under the foreign income section? It seems like I'm inputting the same gross distribution twice, is that correct?

LindaS5247

You are entering the distribution as SSA income. You are then entering any foreign (Canadian) tax paid on that income under Foreign Taxes as "Other Taxes Paid" to get the credit for the tax paid on such distribution.

To enter the NR4, treat it as if it is a SSA-1099 and enter it in the Retirement Plans and Social Security section, under ‘Social Security (SSA-1099, RRB-1099)’.

Then, go to the Deductions and Credits section and select Foreign Taxes under ‘Estimates and Other Taxes Paid’ to enter any foreign tax you already paid to Canada on that income.

For more info specific to the US/Canadian tax treaty, please see http://www.irs.gov/pub/irs-pdf/p597.pdf

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F

fredk99

Is this thread also apply to turbotax 2023 filing? I am having issues on the "Deduction" of the Foreign Taxes part. I followed the instruction in this thread, and answered all the turbotax interview questions and choose "Credit", which takes me to questions for form 1116, and I am not sure what to choose for "Income Category Type". Is that the correct way? if so, what is the "Income Category Type"? Any help is greatly appreciated.

AmyC

Employee

Yes. Form 1116 is used for the foreign tax credit. The general income category is generally used but if you had a lump sum distribution, the rules shift.

See:

About Publication 514, Foreign Tax Credit for Individuals see page 37 for tax treaty income and / or page 43 if lump sum

Claiming the Foreign Tax Credit with Form 1116 - TurboTax

@fredk99

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fredk99

@AmyC Thank you, I have been reading conflicting posts about how to enter the NR4 (code 39) Gross Income, which is monthly pension benefit from my prior employer. I am using 2023 Turbotax premier for Mac. Where should I enter Gross Income as?

Under "Retirement plans and social security", choose "Social Security (SSA-1099, RRB-1099), use "SSA-1099" form?
OR, under "Retirement plans and social security", choose "Canadian Registered Pension Income"
OR, under "Less Common Income", choose "Miscellaneous Income", and "Other reportable Income"?