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Publication 597

Pensions, Annuities,
Social Security, and

Under Article XVIII, pensions and annuities from Canadian sources paid to U.S. residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity). Canadian pensions and annuities paid to U.S. residents may be taxed by the United States, but the amount of any pension included in income for U.S. tax purposes may not be more than the amount that would be included in income in Canada if the recipient were a Canadian resident.


A pension includes any payment under a pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances, and payments under a sickness, accident, or disability plan. It includes pensions paid by private employers and the government for services rendered.
Pensions also include payments from individual retirement arrangements (IRAs) in the United States, registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) in Canada.
Pensions do not include social security benefits.
Roth IRAs.(p3)
A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U.S. tax if paid to a U.S. resident. In addition, you may elect to defer any tax in Canada on income accrued within the Roth IRA but not distributed by the Roth IRA. However, you cannot defer tax on any accruals due to contributions made after you become a Canadian resident.
Tax-deferred plans.(p3)
Generally, income that accrues in certain Canadian retirement plans (including RRSPs or RRIFs) is currently subject to U.S. tax, even if it is not distributed. However, a U.S. citizen or resident can elect to defer U.S. tax on income accrued in the plan until the income is distributed.
The election procedures differ depending on whether an individual qualifies as an "eligible individual" as described under Section 4.01 of Revenue Procedure 2014-55 available at A beneficiary of a Canadian retirement plan is an "eligible individual" if the individual:
Eligible individuals are treated as having made the election in the first year in which they would have been entitled to defer U.S. tax on the undistributed income from the plan.
Filing Form 8891 (now obsolete) is no longer required to make the election. An individual who has previously made the election on Form 8891 or under the procedures set forth in Revenue Procedure 2002-23 (superseded by Revenue Procedure 2014-55) is not required to file Form 8891 or a similar statement for tax years after December 31, 2012.
Individuals who have previously reported the undistributed income accrued in a Canadian retirement plan (including RRSP or RRIF) on a U.S. federal income tax return are not eligible individuals as described in Revenue Procedure 2014-55 , and must continue to report the undistributed income accrued in their Canadian retirement plan on their U.S. federal income tax return and pay U.S. tax on the undistributed income. If these individuals want to make the election, they must seek approval from the IRS.
Revenue Procedure 2014-55 also provides guidance concerning information reporting with respect to interests in certain Canadian retirement plans (including RRSPs and RRIFs). However, the revenue procedure does not affect any other reporting obligations that a beneficiary or annuitant of a Canadian retirement plan (including RRSPs and RRIFs) may have, including the requirement to file a Form 8938, Statement of Specified Foreign Financial Assets, and FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
For more information on the election and information reporting requirements, see Revenue Procedure 2014-55. Information on FinCEN Form 114 is available at

Annuities. (p3)

An annuity is a stated sum payable periodically at stated times, during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). Annuities do not include:

Special rules. (p3)

Special rules apply to pensions and annuities with respect to:Generally, distributions in such cases are deemed to be earned in the country in which the plan is established, without regard to where the services were rendered.

Social security benefits. (p3)

U.S. social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax.


Alimony and similar amounts (including child support payments) from Canadian sources paid to U.S. residents are exempt from Canadian tax. For purposes of U.S. tax, these amounts are excluded from income to the same extent they would be excluded from income in Canada if the recipient was a Canadian resident.