Author Topic: state taxs on IRA distribution for non US residents  (Read 2695 times)

coco1106

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state taxs on IRA distribution for non US residents
« on: May 17, 2019, 02:01:31 PM »


   Please forgive me if this is a stupid question.

  we are both 54 , plan on moving to Ontario next yr, we plan on taking withdrawals from our IRAs when we are 60.
 we currently live on OHIO...when we move I know we file 1040 and ohio for first yr, after that we will file 1040 for ever.
we will live on savings for 6 yrs until we start taking funds from IRA

What happens when we start taking funds from  our IRA, I know we will pay fed taxs on the distribution, but what about state taxs??? by that time we would have been in Ontario for 6 yrs, we have will have zero ties to ohio, no home, drivers license, etc
Does anyone have experience on this matter ??

Thank you for any input.

Goldielocks

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Re: state taxs on IRA distribution for non US residents
« Reply #1 on: May 21, 2019, 02:30:36 AM »
I used this resource, it worked quite well for me.   I did not have to pay any state tax, but I rolled over my entire IRA to an RRSP (in a high Canada tax year), and I did not take it as annual withdrawals / pension...   

https://www.sunnet.sunlife.com/files/advisor/english/PDF/IRA_401k_RRIF.pdf
Note, last update 2017... tax codes do change from time to time.

In general,
1) any taxes withheld by the US or STATE, can be claimed as "foreign tax" on your Canadian return, so you usually do not pay more at year end (unless in an unusually low bracket in Canada, I guess). 

2) Pension distributions have special tax treaty recognition between Canada / US that gives you some benefit / exemptions.

3)  If you did not earn your 40 credit minimum for SS payments in the USA, they are not lost... your years of residency there could potentially contribute to your OAS and CPP credits for Canada.