Whether you get the tax withheld returned to you on your tax return, depends on the tax bracket you are in. If your net income, including the RRSP withdrawal is below $11,635, you should be refunded the tax withheld. The T4RSP slip you have been issued by the bank will show the amount of taxable income you need to report and the tax withheld.
Your bank is mandated to withhold tax on RRSP withdrawals by CRA, and the withholding rates vary according to the amount of the withdrawal. The tax that was withheld may not always be enough to account for the tax you owe at your tax bracket. You may have to pay more tax on the withdrawal when you include the withdrawal on your income tax and benefit return for that year.
Whether you get the tax withheld returned to you on your tax return, depends on the tax bracket you are in. If your net income, including the RRSP withdrawal is below $11,635, you should be refunded the tax withheld. The T4RSP slip you have been issued by the bank will show the amount of taxable income you need to report and the tax withheld.
Your bank is mandated to withhold tax on RRSP withdrawals by CRA, and the withholding rates vary according to the amount of the withdrawal. The tax that was withheld may not always be enough to account for the tax you owe at your tax bracket. You may have to pay more tax on the withdrawal when you include the withdrawal on your income tax and benefit return for that year.
I suppose once you take the money out of the RRSP, you would get a tax slip for reporting it to the CRA. Does anybody have any idea about how to report the same distributions on the US tax return for a US citizen living in Canada who is over 60 years old? Instead of electing to defer income until distribution, the interest income have been reported annually to the IRS. Now that I am withdrawing the entire balance, I wonder if I need to subtract what I have already paid in taxes on the US side. For example, the total contributions over the years is $10k. And the current balance is $10,500; but taxes has already been paid on the $500 interest income. Thanks very much in advance.