Taxed twice

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wiscan
Posts: 3
Joined: Thu Mar 10, 2011 10:18 pm
Location: Wisconsin

Taxed twice

Post by wiscan »

Hopefully some can help. I went to pick up our taxes today and found out that I owe into the state. I live in Wisconsin but have income from Canada. $12000. in EI payments and $5500 in WCB payments. I was notified that when it comes to my federal return that the tax treaty comes into effect however the state of Wisconsin doesn't recognize the treaty and I was told that I have to pay tax on all the Canadian Income. Is he right? This just seems so wrong to me. Any help is greatly appreciated. I left my return with him as he is going to check into the Workers Comp payments to see if that can be tax free as WCB payments in Wisconsin aren't taxable.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You should be used to being taxed twice on your income. In canada you were taxed twice, once fedearlly and once provincially. Same in US.

Some states give credit for provincial tax paid, as a courtesy to former Cdns, but most do not. In any event, you didn't pay provincial tax on this income. So all your income while resident in Wisconsin will be taxed by wisconsin. Think of it as replacing the provincial tax you were apying.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
wiscan
Posts: 3
Joined: Thu Mar 10, 2011 10:18 pm
Location: Wisconsin

Post by wiscan »

Well I don't agree with it at all. On $12,000 I paid over $3000 to Revenue Canada. That is more then enough tax. If I were back in Canada I would actually be getting back some of that $3000 if not all of it. WCB payments are non-taxable in Canada and in Wisconsin. I don't think they should be allowed to consider those as income just because it came from Canada. In Canada I would not be paying addition tax on what I had.
wiscan
Posts: 3
Joined: Thu Mar 10, 2011 10:18 pm
Location: Wisconsin

Post by wiscan »

oh and I wanted to add, we don't file separate returns for provincial and federal in Canada like they do in the US. Income tax you pay into the federal government is distributed to the individual provinces in transfer payments.
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