How are US pensions taxed in Canada


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Phil Hogan, CPA, CA, CPA (CO)
Cross-Border Tax and Investment Specialist


I moved back to Canada a few years ago and will be starting to draw on my US pension in the coming months.

How will my US pension be taxed in Canada?


Hi, thanks for your question, however considering I don’t know much about your situation let me give you the basics:

  • US pension income will be taxable both in Canada and the US (assuming you’re also a Canadian resident)
  • The amount of US tax you pay will be different depending on whether or not you’re a US Citizen, Green card holder or a non-resident of the US
  • For US citizens and green card holders the US pensions will first be taxed (the taxable portion on the 1099-R) in the US on your 1040 return at regular rates. Note however that if your average US tax rate is more than 15% (maximum under the treaty) you’ll need to resource enough tax via form 1116 to ensure only 15% tax is paid to the US.
  • For non-residents of the US the pension income will attract a 15% US withholding tax that will be the final US tax for any distribution
  • For Canadian purposes the full amount of taxable pension per the 1099-R will be converted to Canadian dollars at the average USD/CAD rates and taxed at regular Canadian graduated rates.
  • Any US tax you paid on the pension income (either as a US citizen, green card holder or non-resident) will be available as a foreign tax credit on your Canadian income tax return. As mentioned above the maximum allowable to claim is 15% under the treaty.
  • In some cases lump sum pension payments will attract a 30% withholding rate, however administratively CRA and the IRS often only allow for the flat 15% rate.
  • Social security payments however are taxed completely differently. Under the treaty social security payments are only taxable in the country of residence. Therefore, for US citizens living in Canada that are currently receiving US social security payments these payments will be taxable only in Canada. Make sure to properly file your 8833 treaty election forms to properly disclose the fact that you’re not reporting the SS payments on your annual 1040 return.

Also note that most US pensions (excluding IRAs) will be available to pension split with a spouse. However, in cases where you income split with your spouse please ensure to also allocated the foreign taxes paid to the spouse so they can also claim their portion of foreign taxes.

Hope that helps and please let me know if you have any further questions.




  1. > Social security payments however are taxed completely differently. Under the treaty social security payments are only taxable in the country of residence. Therefore, for US citizens living in Canada that are currently receiving US social security payments these payments will be taxable only in Canada. Make sure to properly file your 8833 treaty election forms to properly disclose the fact that you’re not reporting the SS payments on your annual 1040 return.

    Does this apply even for non-US citizens (e.g. green card holders who gave up their green cards)?

  2. Dear Phil,

    I have a question for you. I am a Canadian citizen but have dual citizenship. I receive Social Security Survivors Benefits under $12,000 yearly. Do I have to pay taxes on U.S. Survivors Benefits, as a widow, now living in Canada to the Canadian gov’t? Thank-you.


  3. Hi Phil, I am a Canadian Citizen applying for a Canadian OAS. My husband is a US citizen recieving a US Social Security. We live seperately in our Countries. Am I required to give information on his income for my application? I understand if something happens to him and I want to recieve his Social Security I would have to file both in the US and Canada. Would his income affect my Canadian OAP amount?

  4. Hi Phil- I saw your youtube video on Pensions and Social Security. I am a dual citizen in US and Canada. For the past five years I have been reporting my Social Security on my US Return. There is a small amount of tax that is generated by doing that. I have shown the taxable amount of SS as resourced on Form 1116 and taken the Foreign Tax credit on the amount that is taxed. I have not taken any tax credit on the Canadian return. After seeing your video I realize I am doing it incorrectly. Should I amend the last three years of US returns and file the 8833 or can I continue to file the way I have?

  5. Hi Phil- I hope this is not a duplicate post on my part.
    I am a dual citizen of US and Canada living in Canada. I saw your Youtube video on Pensions. I have been filing my US return for the past five years and have reported my Social Security payments on the US and Canada returns. A small amount is taxed in the US. I have taken the Foreign tax Credit on my 1040 for the amount of Canadian tax paid on the Social Security. After seeing your video, I realize I am doing it incorrectly. Should I amend the past three years and exclude the Social Security and file Form 8833 or just correct my filings going forward? Thank you.

  6. Hi.
    Reading the general instructions for the 8833 form:

    “Positions for which reporting is waived include, but are not limited to, the following. See Regulations section 301.6114-1(c) for other waivers from reporting.
    • That a treaty reduces or modifies the taxation of income derived by an individual from dependent personal services, pensions, annuities, social security, and other public pensions,…”

    This would seem to suggest that filing an 8833 to report exclusion of SS income based on the treaty is not required.


  7. Hi Phil,

    My husband is a American veteran with a 100% service related Disability rating. Because of this, he receives Disability benefits from the VA. Me and him have been both pulling our hair out trying to figure out how this will be taxed in Canada (in the US, this income is not taxed at all). Could you please provide more clarity on this?

    Thank you!

  8. Good Night Phil,
    I just watched you video, great job. Here is my question. Last year I started receiving social security payments from the US. I am a Canadian living in Canada. Can I spilt my payments between my wife and I?

  9. I am a Canadian that has just started to receive in the fall a monthly survivor’s pension from the US. My question is, do they send me some kind of form every year (like a T4 here) with the information on it for tax purposes? I have no idea and can’t find anything online. I received 4 payments in 2022 – do I just put the total amount on my tax return under Foreign income? It just appears magically in my account every month so I don’t know if it’s already taxed or not. I am ready to file but don’t know if I should wait to receive something from the US for the year 2022. Thanks. Love the money, hate figuring out the paperwork.

  10. I have same question as Geoffrey. Can you income split US social security payments. I understand you cannot spit IRA or 401K withdrawals. My wife and I are dual citizens living in Canada.

  11. Hi Phil,
    Great Videos.
    Does income(s) from a 1099R constitute “foreign Property”, and have to be included with, or reported on a T1135 form as part of foreign property assets over 100k or more etc…, that fall under this reporting form?
    Thanks in advance

  12. Hi Phil,

    I would be interested in arranging a consultation to discuss Canada-U.S. tax issues. As a bit of background, my wife (Aileen) and I are U.S. citizens and currently live in Virginia, near Washington, DC. We were both employed as economics professors in Canada (University of Toronto for a couple years, followed by University for several more years) during the 1990s (we had landed immigrant status), and we have RPP accounts with the Carleton University Pension Plan as well as RRSP accounts with the Bank of Montreal. We are up to date with our U.S. filing requirements, including FBAR and Form 8938. We anticipate retiring in the next 2-3 years. I am interested in learning about the following sorts of issues:

    (1) Tax treatment and reporting of RRSP distributions — I have roughly CDN$150,000 and Aileen has about CDN$100,000 in RRSP accounts.

    (a) I understand that Canada will impose a 25% withholding tax on any RRSP withdrawals we decide to make, which we can then claim as a tax credit on our U.S. returns. I am wondering whether the full amount of an RRSP withdrawal is subject to U.S. tax. I had read somewhere that, since RRSP contributions are not deductible from U.S. tax, that only the earnings (not the principal) is subject to tax in the U.S., but I am unsure whether this is correct.

    (b) I gather that RRSP distributions would be reported on Form 1040, lines 5a and 5b, and also documented on Form 8938, Part III, while the tax credit for Canadian withholding would be reported on Form 1116. Does that cover the reporting issues? (We may be interested in assistance with tax preparation when we begin withdrawing funds.)

    (2) Tax treatment and reporting of distributions from our RPPs. We each have roughly CDN$375,000 in RPPs (University Retirement PLan).

    (a) Should we arrange to have our RPPs unlocked under the Ontario provisions for non-residents? I gather that this would make it possible to make periodic withdrawals from our RPPs in the future directly, rather than having to setting up a LIF or annuity. If we took this approach, I gather that we would still have to roll over any undistributed funds to a LIF or annuity when we turn age 71. I am wondering whether such a rollover is considered a tax free event from the U.S. tax perspective (as it is in Canada).

    (b) I gather that the reporting of RPP withdrawals would involve the same forms and line items as RRSP withdrawals. Is that right? I am wondering whether the full amount of the withdrawal is taxable in the U.S. or if only the portion attributable to employer contributions and earnings on employer contributions is taxable. (I read somewhere that employee contributions and earnings on employee contributions are not taxable in the U.S., because employee contributions to RPPs are not deductible in the U.S.)

    (c) We are eligible for modest CPP benefits, which we are tentatively planning on deferring until we are 70 years old. We will likely be subject to the social security windfall elimination provision (WEP). I am wondering whether the Social Security Administration tends to apply the WEP provisions properly with regard to CPP. My understanding is that the WEP calculation is based on the benefits that would be available when one first becomes eligible for both programs (i.e., at age 62), so I am wondering if the Social Security Administration will be aware when we are 70 years old of what our CPP benefits would have been had we instead claimed them when we were first eligible at age 62.

    Please let me know if you have availability for a phone/virtual consultation and, if so, your fee schedule and some possible days/times.

    Best regards, Jammie


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