Hi, I am a U. S. Citizen, I just found your very comprehensive forum but I have failed to find a topic related to my question, and I am in sort of a rush for an answer…Sorry :).
The Facts:
I am a permanent U. S. Resident golf pro (not team athlete). I own no property or business interests in Canada. In 2009 I spent a total of 1 week in Canada during which I won $ in pro golf tourney. For the win, I was paid in excess of $10,000 Canadian and subsequently received 2009 T4A-NR reflecting 15% Canadian tax withheld. I have subsequently called the Canadian Revenue Agency (CRA) and also spoke to a Canadian Chartered Accountant (CCA). Both gave me conflicting answers.
1. CRA told me file T1 and claim a full refund of 15% withholding on the basis of no tax due on Canadian Income due to Treaty Article XIV.
2. CCA told me income is self- employment and is taxable in Canada and I should file 2009 T1 and pay any additional tax (works out to about a total of about 30%) and subsequently take foreign tax credit for total Canadian tax paid on Canadian Income on my 2009 US 1040.
Q1: Seems like a wash to me to pay tax to US or tax to Canada and take US foreign tax credit, but I want to file my tax returns properly and pay any tax due correctly, which method is correct, 1 or 2? If there is a 3, please advise.
Q2: If I file and pay Canadian tax the add’l Canada tax is due on 4/30/10 and T1 due by 6/15/10, correct?
U.S. Citizen Golf Pro Win in Canada Received T4A-NR
Moderator: Mark T Serbinski CA CPA
Well, its troubling that CRA would tell you to claim against treaty article XIV, as this was actually repealed 3 years ago --so that is jus tplain wrong.
The correct answer is none of the above.
As an athelete, you fall under Article XVI, which allows your grross income to be $15K to be exempted. and your tax to be limited to 15%.
So, if your winnings (befre tax) were less than $15K, you report the on a non-resident retur, and then exempt them on line 232. That way you will get ALL your tax back.
If your winnings were more than %15K, you don't need to do anything, except claim the 1%% as a credit on your uS return. The 15% tax is your final obligation. The treaty specifies no more tax than that.
The tourney handled it exactly correctly.
The due date is not important.
The correct answer is none of the above.
As an athelete, you fall under Article XVI, which allows your grross income to be $15K to be exempted. and your tax to be limited to 15%.
So, if your winnings (befre tax) were less than $15K, you report the on a non-resident retur, and then exempt them on line 232. That way you will get ALL your tax back.
If your winnings were more than %15K, you don't need to do anything, except claim the 1%% as a credit on your uS return. The 15% tax is your final obligation. The treaty specifies no more tax than that.
The tourney handled it exactly correctly.
The due date is not important.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best