Question about foregin tax credit

[nachochip]

Hello all, I have a question regarding how to claim the foreign tax credit on my Canadian tax return. Here's my situation:

I transferred back to Canada in November 2024 from the US within the same company, after working in the US for the last 10 years. For my 2024 tax return, I will file a US tax return for income earned from January 2024 to October 2024, and a Canadian tax return for income earned from November 2024 to December 2024. However, my RSUs vested sometime in November 2024, and both the US and Canada withheld tax on this vested amount. Canada withheld around 33%, and the US withheld around 21%. I understand that when I file my Canadian tax return, I can claim a foreign tax credit for the tax I paid to the US on this vest.

The question is, what is the exact amount I should claim for the foreign tax credit here? Someone suggested I can only claim 21% since the last US pay stub (specifically for the November vest) showed 21% of the vest was deducted for tax. Another accountant suggested I can claim the actual tax I paid to the US for that vest because my full-year income in the US (January - October) pushed me into a much higher tax bracket than the 21% withholding rate, which in my case is around 27% for the vested money.

However, one accountant warns that if I claim 27% based on my tax bracket, CRA might challenge why it's 27% when my US pay stub only shows a 21% deduction, and in a worst-case scenario, they might consider it intentional misrepresentation. I have the US tax already filed, but because the total tax paid is combined across all income sources, it will be difficult to show the CRA the exact amount of US tax paid specifically for that vested transaction; I can only estimate it based on my US tax bracket.

Have other people experienced a similar issue, and how did they handle it? I have prepared the US tax transcript to show the tax paid to the US, and I am also ready to explain to the CRA why I fall into a certain tax bracket (which is fairly straightforward based on my employment income). Any thoughts? Thanks in advance!

[nachochip]

One more information, my accountant said I should use my effective tax rate on the 1040 as the foreign tax rate, because CRA will only accept that as to calculate the foreign tax rate credit. However, it totally doesn't make sense to me as my total income include employment income (56%) as well as capital gain (44%). The employment income is from 10% to 32% bracket, while the capital gain is within 10% to 20% range. I think simply using the effective tax rate is very wrong to determine my foreign tax credit rate right. Anyone experience that it is how CRA determine the foreign tax credit rate?

[LS2023]

Other than using foreign tax credit, there is cross-border tax treaty already there for many years.

Pls. surf on the internet for this subject "Canada-US Cross Border Tax Issues In Connection With Employee Stock Option" etc.
In my understanding, here "stock options" should include employee stock benefits in a broader sense.

For example,

https://www.cadesky.com/publications/co ... k-options/

"... However, the Canada-US tax treaty includes a provision whereby the employment benefit is allocated to each jurisdiction based on the number of days of employment in each location. This is a unique provision that does not exist in other treaties. In most other scenarios, the usual foreign tax credit mechanisms should relieve double tax."