You can enter Canadian sourced retirement income in the TaxAct program in one of two ways. The amounts are then carried to the applicable lines of Form 1040. 

• In the Social Security section
• On the worksheet FEC Foreign Employer Compensation and Pensions.

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:

1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
2. Click Social Security Benefits, and continue with the interview process to enter your information.

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:

1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
2. Click the Retirement Plan Income dropdown, then click Foreign pension distributions.
3. Click + Add Form 1040 FEC to create a new copy of the form or click Edit to edit a form already created (desktop program: click Review instead of Edit).
4. Continue with the interview process to enter your information.

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.

For more information, see:

• Publication 54
• Publication 597
• Publication 901
  
• Top Frequently Asked Questions for U.S. Aliens and Citizens Living Abroad
  
• Publication 915
  

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.