Canadian sourced retirement income may be entered in one of two ways. The amounts are then carried to the applicable lines of Form 1040.
Social Security Benefits
Foreign Employer Compensation (FEC) Worksheet
Social Security Benefits
Under the income tax treaty between the U.S. and Canada, benefits paid under the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), and Old Age Security (OAS) program to a US resident are treated as US social security benefits for US tax purposes. If your total income is above certain limits, a maximum of 85% of your benefits will be subject to tax.
Canadian benefits that are treated as US Social Security Benefits are reported on Lines 6a and 6b on Form 1040. To enter this information in the TaxAct program, follow the steps below.
Online
Dashboard
From within your TaxAct return, click Income.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click the Retirement & Social Security drop-down.
Click Add beside Social Security Benefits (From SSA-1099 or RRB-1099).
Complete the rest of the interview process.
Classic
From within your TaxAct return, click Federal.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click Social Security Benefits (SSA).
Complete the rest of the interview process.
Desktop
From within your TaxAct return, click Federal.
Click Social Security Benefits (SSA).
Complete the rest of the interview process.
Foreign Employer Compensation (FEC) Worksheet
If your Canadian retirement income does not meet the provisions of the income tax treaty detailed above, you will need to enter the information on the FEC worksheet instead. To enter the retirement income on the worksheet, follow the steps below.
Online
Dashboard
From within your TaxAct return, click Income.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click the Wages & Salaries drop-down.
Click Add beside Wages & Distributions from a Foreign Employer.
Complete the rest of the interview process.
Classic
From within your TaxAct return, click Federal.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click the Retirement Plan Income drop-down, then click Foreign pension distributions.
Complete the rest of the interview process.
Desktop
From within your TaxAct return, click Federal.
Click the Retirement Plan Income drop-down, then click Foreign pension distributions.
Complete the rest of the interview process.
The FEC worksheet is not an IRS form, but is a worksheet used in the TaxAct program to collect the information and transfer it to the appropriate place on the return. All information entered on the worksheet is transmitted with the return (if it is electronically filed). If the return is paper-filed, there is no documentation required to be sent with the return. The IRS will contact the taxpayer if they need any additional information on the amount entered on the return for foreign retirement income. If you still want to print the FEC worksheet to mail with the return, go to our Printing Your Return and Individual Forms FAQ.