what do i do in this situation? non resident now but withdrew rrsp at resident rate from bank generating t4rsp slips

[evelynmaxburns]

I am declaring non resident status for 2024 year, but withdrew from RRSPs in January 2025. I was taxed at resident rate rather than the 25% withholding rate. what do I do about this? DO I file taxes as non-resident in 2025 to deal with the lower interest being taken off my RRSPs?

[TurboTaxAniqua]

As a non-resident who withdrew RRSP funds at a resident rate, generating T4RSP slips, you need to file a non-resident tax return (NR4 slip) to report the income and potentially claim a refund of excess withholding tax. 

Here's a breakdown of what to do:

1. Understand the Situation:

• Non-Resident Status: You are now considered a non-resident of Canada. 

• RRSP Withdrawal: You withdrew funds from your RRSP, which is taxable income. 

• T4RSP Slip: Your financial institution issued a T4RSP slip showing the RRSP income and tax withheld. 

• Non-Resident Tax: As a non-resident, you are subject to a 25% withholding tax on RRSP withdrawals, unless a tax treaty with your country of residence provides a lower rate. 

2. File a Non-Resident Tax Return (NR4):

NR4 Slip:

Your financial institution will issue an NR4 slip to report the RRSP withdrawal and the tax withheld. 

File the Return:

You need to file an NR4 return with the Canada Revenue Agency (CRA) to report the income and tax withheld. 

Electing under Section 216:

You can choose to file a separate return to report this income, which is called "electing under section 216 of the Income Tax Act". This allows you to pay tax on your net Canadian-source income instead of on the gross amount. 

Guide T4144:

For more information, see Guide T4144, Income Tax Guide for Electing under Section 216. 

3. Report the Income and Tax Withheld:

Line 12900:

Report the RRSP income from box 22 of your T4RSP slip on line 12900 of your income tax and benefit return.

Line 43700:

Claim the tax deducted from box 30 of your T4RSP slip on line 43700 of your income tax and benefit return. 

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