Canadian Retirement Plans – Simplified Reporting

Posted by on Wednesday, February 25th, 2015 in Blog

New for the 2014 tax year, U.S. citizens and residents with certain Canadian registered retirement savings plans (RRSP’s) automatically qualify for deferral of U.S. tax on the income earned on their Canadian retirement accounts. Rev. Proc. 2014-55. Previously, in order to defer taxation, Taxpayers were required to file the Form 8891 reporting account activity including undistributed earnings, contributions, etc. Now, deferral is automatic as long as the Taxpayers file U.S. income tax returns and properly report distributions.

Please note, this simplified procedure does not appear to apply to Canadian citizens and nonresidents. There also may still be additional reporting via FinCEN Form 114 and/or Form 8938. California continues to treat any undistributed earnings within the RRSP as taxable regardless of whether or not the Taxpayer made any distributions.

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