Cdn working in US, with Cdn income. How to avoid double tax?

[canadiannyc]

This probably came up before in the forum but I can't seem to find the right information. HELP!!

I am a Canadian working in the U.S., supported partly by a science research fellowship from Canada. The Canadian income was unfortunately less than 90% of my world income, so I don't get the normal federal tax credits. I already paid U.S. taxes on this Canadian income, and now I am about to get hit with the Canadian taxes on this same income, with no federal tax credits, and a 48% non-resident surtax! Is there a way around this?? Thank you!

[nelsona]

I already paid U.S. taxes on this Canadian income

If you realy have to report the income in US, then you should amend your US return to claim a foreign tax credit for any Cdn tax that you owe, by filing a 1116 form

You should be preparing your Cdn and US returns together so as to avoid having to amend one when you finish the other.

What is your US status? If you are a student (F or J) then the Cdn income should not have even been reported in US by article XX of the treaty.

I wouldn't complain much about the non-resident surtax, that is merely like provincial tax. The goal is for you to pay 23% flat tax on the first $35,000. Any deductions you do get to claim (and I agree there aren't many) is merely a bonus.

so, you should either be looking at claiming a foreign tax credit on your US return, or if you were a student before entering US, exempting that income altogether.

But your Cdn return sounds about right.