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How do taxes work for IRA withdrawal for U.S. citizen living in Canada?


Hero Member
May 10, 2020
I've done a lot of digging, but can't seem to get my arms around this one. Assume..
- U.S. citizen who is PR of Canada, living in Canada
- over the age 59 1/2 (no early withdrawal penalty)
- Wants to start making IRA withdrawals from U.S. brokerage account (that does allow for Canadian home address)

As best I can figure out...
- pay U.S. taxes on the distribution in the standard fashion (i.e., personal tax rate)
- file Canadian taxes on the distribution as well; not sure if this is based on personal tax rate for Canada, or the tiered tax rate used for RRSP distributions (that is a combined federal & provincial tax rate)
- on the Canadian tax return, I assume I'd take a foreign tax credit for the U.S. taxes paid on the distribution (but the credit can't be more than the calculated Canadian taxes)
- Does this sound right so far?
- Note this assumes that federal U.S taxes paid on the distribution can offset (using the foreign tax credit) the combined Canadian federal + provincial taxes on the distribution. Or can federal only offset federal? If so, how to tease out federal from provincial for the special tiered RRSP rates?
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