CCRA being difficult about FTC for cross border commuters
Moderator: Mark T Serbinski CA CPA
CCRA being difficult about FTC for cross border commuters
It seems CCRA is no longer accepting US and state returns and W-2 to document FTC claims. They want a "Notice of Assessment' which of course IRS doesn't provide.
You have to request transcript from IRS and from state of employment.
Since these aren't available until your US and state returns are processed, your FTC will be rejected and you will have to file Notice of Objection, gather the transcripts, and submit them.
Major PIA. Rumour has it that the CCRA *might* accept banking evidence of refund or payment in lieu of transcripts, but so far, just rumour. I'lll know when I get my CCRA letter and Notice of Assessment - from My Account I know it's coming.
Supposedly this is new for 2015. I've never had to do this in 16 years of cross border commuting. The only way around it seems to be to file your US returns as early as possible in the year and hope you can have transcripts available by the time you file with CCRA, but that seems problematic to me.
You have to request transcript from IRS and from state of employment.
Since these aren't available until your US and state returns are processed, your FTC will be rejected and you will have to file Notice of Objection, gather the transcripts, and submit them.
Major PIA. Rumour has it that the CCRA *might* accept banking evidence of refund or payment in lieu of transcripts, but so far, just rumour. I'lll know when I get my CCRA letter and Notice of Assessment - from My Account I know it's coming.
Supposedly this is new for 2015. I've never had to do this in 16 years of cross border commuting. The only way around it seems to be to file your US returns as early as possible in the year and hope you can have transcripts available by the time you file with CCRA, but that seems problematic to me.
References are always appreciated when posting new information:
http://hcbtax.com/changes-to-cra-review ... ax-credit/
http://hcbtax.com/changes-to-cra-review ... ax-credit/
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Got a message in CRA My Account. Called CRA as I now 'owe' a huge amount as my US FTC denied. Told that FTC denied, will need further documentation, await letter and Notice of Assessment.
Web search found that policy has changed. Contacted my accountant who confirmed he had same information.
I truly hope they will accept bank documentation such as refund deposit or payment. IRS, you can order transcript online, claim you will receive in 5-10 business days. Minnesota...have to file a form and submit nominal payment, 'most' requests take 30 days.
Even bigger PIA for those who have FTC from non-English or French speaking countries: You need a certified translation of the complete tax document, not just the relevant line or page.
Web search found that policy has changed. Contacted my accountant who confirmed he had same information.
I truly hope they will accept bank documentation such as refund deposit or payment. IRS, you can order transcript online, claim you will receive in 5-10 business days. Minnesota...have to file a form and submit nominal payment, 'most' requests take 30 days.
Even bigger PIA for those who have FTC from non-English or French speaking countries: You need a certified translation of the complete tax document, not just the relevant line or page.
Here are the key items requested by CRA. It made a request but didn't specify from whence to obtain the requested and what document qualifies as a source document to suffice.
- CRA Form T2209
- CRA Forms T3, T5, T4PS, Schedule 4, 3, Form T2125
-Foreign tax returns prepared
- Tax slip from USA employer
- IRS Federal account transcript (US)
- Account statement from state and municipal tax authority (US)
- Letter from taxpayer, indicating the following:
- "type of foreign income sourced"
- proof of refund
- exchange rate used to convert amounts to CAD
- CRA Form T2209
- CRA Forms T3, T5, T4PS, Schedule 4, 3, Form T2125
-Foreign tax returns prepared
- Tax slip from USA employer
- IRS Federal account transcript (US)
- Account statement from state and municipal tax authority (US)
- Letter from taxpayer, indicating the following:
- "type of foreign income sourced"
- proof of refund
- exchange rate used to convert amounts to CAD
Got the letter, called Winnipeg Preassesment Review line.
Agent *thinks* they may accept an IRS CP24 form ( which as luck would have it, I received, as my 1040ES arithmetic was off by $1 ) and a bank statement showing cheque payable to Minnesota Revenue matching amount owing on M1.
Faxed it to them, we shall see.
Postal Strike looming in Canada, will be problem to get IRS and Minnesota transcripts in timely fashion.
Also was told this is the 'New Normal' and everyone claiming FTC can expect this process to continue next year and beyond.
Definitely will want to file US returns as early as possible next year, to have the documentation available for CRA by Canadian filing time.
Agent *thinks* they may accept an IRS CP24 form ( which as luck would have it, I received, as my 1040ES arithmetic was off by $1 ) and a bank statement showing cheque payable to Minnesota Revenue matching amount owing on M1.
Faxed it to them, we shall see.
Postal Strike looming in Canada, will be problem to get IRS and Minnesota transcripts in timely fashion.
Also was told this is the 'New Normal' and everyone claiming FTC can expect this process to continue next year and beyond.
Definitely will want to file US returns as early as possible next year, to have the documentation available for CRA by Canadian filing time.
Wonder if this will apply only to those paying US tax on a graduated basis?
Those being flat taxed on a treaty rate should be able to rely on the 1099's, 1042's etc that they receive, since they aren't even filing.
Those being flat taxed on a treaty rate should be able to rely on the 1099's, 1042's etc that they receive, since they aren't even filing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
If CRA accept the CP24, it's a good idea. Easy for me since I always make 1040ES payments. I can just report $1 less than I actually paid, and generate a CP24.
However, if you have a US registered cell phone, or your accountant has access to IRS E-Services, you can get an IRS transcript online for instant download, once available ( 4-6 weeks after filing ). IRS apparently checks with Equifax re the cell phone so a Canadian phone won't work ( they send you code ).
The state and possibly municipal taxes, if applicable, are a bigger problem.
I sincerely hope CRA accepts my bank statement showing cheque image payable to Minnesota Revenue matching amount owing on my M1.
We'll see. I was told today there is a huge backlog ( due to this change ) and it may take 5-10 days just to acknowledge the faxed documents.
However, if you have a US registered cell phone, or your accountant has access to IRS E-Services, you can get an IRS transcript online for instant download, once available ( 4-6 weeks after filing ). IRS apparently checks with Equifax re the cell phone so a Canadian phone won't work ( they send you code ).
The state and possibly municipal taxes, if applicable, are a bigger problem.
I sincerely hope CRA accepts my bank statement showing cheque image payable to Minnesota Revenue matching amount owing on my M1.
We'll see. I was told today there is a huge backlog ( due to this change ) and it may take 5-10 days just to acknowledge the faxed documents.
You need a US-registered cell phone - in your name.
IRS checks with credit bureau that the phone belongs to you, and sends by SMS text a confirmation code you need to use to proceed with the download.
Since I live in Canada, I don't have an eligible cell phone. I suspect I'm not only cross boarder commuter in this situation.
IRS checks with credit bureau that the phone belongs to you, and sends by SMS text a confirmation code you need to use to proceed with the download.
Since I live in Canada, I don't have an eligible cell phone. I suspect I'm not only cross boarder commuter in this situation.