Relocation expenses

yevdan · Post by **yevdan** » Mon Apr 28, 2008 2:21 pm

I am working in US on TN since June 2007.

My US employer assigned 10000 $ of my US salary to relocation expenses.

But my W-2 doesn't show it .10000 $ is added on top of my total income in the box 1 of W-2.

But I uderstand that for canadian taxes I can use this ammount to reduce my world income, which I claim to CRA

How should I proceed claimimng this and what documentation I need to have proving the fact that 10000 $ of my salary is for relocation.

nelsona · Post by **nelsona** » Mon Apr 28, 2008 3:04 pm

You need to document your expenses to reduce your taxes.

BTW, if you have moved to US, how can you be claiming moving expenses on your Cdn return? You are either non-resident of canada and should not be reporting any US incoem, or you have not moved, and thus can't claim moving expenses.

yevdan · Post by **yevdan** » Mon Apr 28, 2008 3:24 pm

Thank you Nelsona for the fast reply.

But again my employer gave me this money as a relocation package, but as far as I know relocation expenses are taxable in US, thus he included this anmmount in my W-2 and I paid tax for this.

But for canadian tax purposes relocation money is not an income and shouldn't be taxed. Thus I am assuming that I can reduce somehow) my US income by this ammount (10000) when I show my US income in CRA tax return.

Am I right ?

nelsona · Post by **nelsona** » Mon Apr 28, 2008 4:47 pm

How about you answer my question first, before repaeating yours:

Why are you reporting US income on your Cdn return, if you have moved to US?

We'll talk about relocation after.

nelsona · Post by **nelsona** » Mon Apr 28, 2008 5:05 pm

My understanding of non-taxable relo fees is that they they need to be related to a change in the employees workplace for the same employer, not new employment (but you know otherwise, I won't debate it).

The 'plan' must also be accountable. What your US employer gave you appars to be from a non-accountable plan, thus there is no fiugure on your W02, which would indicate to me that you can't claim it.

You would know if it was accountable if your W-2 had a figure with a 'P' code beside it. Since you don't seem to have this, I'm thinking you are not eligible.

Shouldn't matter though, because you probably shouldn't be reporting any of the income.

yevdan · Post by **yevdan** » Mon Apr 28, 2008 5:13 pm

Thank you for your help again.

but actually I am filing both US and canadian per your recommendation.

http://forums.serbinski.com/viewtopic.p ... highlight=

I have filed 1040NR so I assume now I need to file canadian return and to pay around 10K extra for US income because of the tax rate difference.

Or it could be done something that can help me to optimize my tax return

nelsona · Post by **nelsona** » Tue Apr 29, 2008 12:42 pm

So it is like I said. You have not moved, thus cannot claim moving expenses.