# claiming Canadian income



## bonnieh (Mar 11, 2014)

I have just begun to receive Canada Pension and Old Age Pension living in the United States.
Does this have to be claimed on my US tax form?

Because I don't live in Canada I do not have to do a yearly income tax form so I'm wondering if it is wiser to have the checks deposited into my Canadian Account?


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## BBCWatcher (Dec 28, 2012)

All income must be reported. Which bank account it's paid into doesn't matter, except that there could be _additional_ reporting requirements (FBAR and/or FATCA).

Whether that income attracts tax or not, and at what rate, are separate questions.

"Income" isn't quite the same as "everything of value" -- a kiss and a rose may be valuable, but they're not generally reportable. What you describe is most definitely income.


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## maz57 (Apr 17, 2012)

It's my understanding that according to the Canada/US tax treaty US Social Security, Canadian CPP and OAS are taxable only in the country of actual physical residence. So the answer in this case would be yes, the benefits must be declared on your US tax return because you live in the US.

As BBC pointed out, if the benefits are paid into a Canadian account and later transferred to your US account, the FBAR requirement might be triggered if the $10,000 threshold is reached at any time during the year. I believe it is possible to set up your Canadian government benefits so they are direct deposited into your US account in US dollars. This would eliminate the FBAR complication if you don't have other Canadian accounts over $10,000.

Also be aware that while CPP can be received just about anywhere, OAS has specific prior Canadian residence rules in order to collect it long term outside of Canada. Also note that if you also worked in the US and paid into Social Security, you might qualify for a small SS benefit as well, even though you didn't work the requisite 40 units (generally10 years). This is made possible by the totalisation agreement between the two countries whereby the time requirement can be satisfied by paying into either system. The benefit is calculated according to the amount actually paid into the system.


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## Bevdeforges (Nov 16, 2007)

Just an additional note - if you are preparing your taxes with a tax software or online, you may need to fill in a FEC form for your foreign pensions. This is sort of a substitute for a W-2 or 1099 that indicates that the income is from a foreign source.

At least on the software I used, there is a way to report foreign pensions to indicate the total amount received and then the amount taxable in the US. (You'll have to check on the treaty provisions to find out what part is or isn't taxable in the US.)
Cheers,
Bev


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