Is income from US annuity taxed under tax treaty?

The taxation of income from a US annuity in Canada would depend on the terms of the tax treaty between the United States and Canada.

The US-Canada tax treaty provides that the income from a US annuity received by a resident of Canada may be subject to taxation in Canada. However, the amount of tax that may be imposed by Canada is limited by the terms of the treaty. Specifically, the treaty limits the amount of tax that Canada may impose on the income from a US annuity to the amount of tax that would be imposed in the United States if the recipient were a resident of the United States.

Therefore, if you are a resident of Canada and receive income from a US annuity, you may be subject to tax on that income in Canada. However, the amount of tax that you may be required to pay in Canada will be limited by the terms of the US-Canada tax treaty.

Please see the two TurboTax FAQs for more information:

The USA/Canada Tax Treaty Explained

Foreign Income and Tax Treaties

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