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I left Canada in 2019 after living and working there for 2.5 years. I returned to the USA to live and work. I cashed out of my Canadian employers' pension plan upon leaving, and received the lump sum proceeds in Canadian dollars minus 20% withholding tax by the Gov't of Canada. How do I handle reporting this income on my 2019 US tax return? Is this pension cash out handled as part of foreign earned income exclusion, or as a substitute 1099-R, or something else?
Registered Pension Plan (RPP) withdrawals made by a resident of Canada are subject to a withholding tax of 20%. Since you made the withdrawals prior to moving to the US, the amounts withdrawn are not reportable on a US tax return.