Get Publication 3137 (rev. 10-2000). People On A Pension: You May Not Be Required To Have Federal Tax

Canadian-source retirement income If your total income is above certain limits, a maximum of 85% of your benefits will be subject to U.S. tax. Canadian benefits that are treated as U.S. social security benefits are reported on Lines 6a and 6b on Form 1040.

Form 1099-R is used to report the distribution of retirement benefits such as pensions and annuities. You should receive a copy of Form 1099-R, or some variation, if you received a distribution of $10 or more from your retirement plan.

Lump-Sum Benefits Unless you choose no withholding, a lump-sum benefit that is not an eligible rollover distribution, the taxation is 10% of the distribution.

Line 31400 Pension Amount Tax Credit This is a non-refundable credit, but can be transferred to a spouse or common-law partner if it is not fully used by the taxpayer. Any unused portion can not be carried forward or back.

What is the pension income tax credit? If you have up to $2,000 of “eligible pension income,” you can claim a federal tax credit that will reduce your tax payable on that income by 15%. On $2,000, that's a savings of $300.

Age amount - Federal line 30100. The Canada Revenue Agency has made changes to the non-refundable credit on line 30100 "Age Amount." If your net income on line 23600 is $38,508 or less, the applicable credit will be $7,637. However, if your net income is $89,422 or more, no credit will be allocated to you.

Like employment income, most retirement income is taxable. That includes Canada Pension Plan (CPP), Old Age Security (OAS) and company pension payments.

Line 31400 Pension Amount Tax Credit Taxpayers receiving certain pension income may claim both a federal and provincial/territorial pension income tax credit. This is a non-refundable credit, but can be transferred to a spouse or common-law partner if it is not fully used by the taxpayer.