Canada US Taxes

srini88 · Post by **srini88** » Tue Nov 28, 2006 8:42 pm

I apologize if this has been addressed before. I am a Canadian Permanent Resident living in Canada and commuting to the US, on H1. My company deducts US taxes from my paycheck including social security and medicare.

When filing my canadian taxes, can I deduct the amount paid towards social security and medicare to calculate my taxable income in Canada?

Or is there a way to stop the deduction of Social security and medicare taxes from my paycheck?

Thanks!

nelsona · Post by **nelsona** » Tue Nov 28, 2006 9:15 pm

Your medicare and SS are considered foreign taxes, which you get CREDIT for along with IRS ansd state tax. This will reduce yur Cdn tax owing (not your income).

No, you cannot avoid SS/Medicare as an employee working in US.

srini88 · Post by **srini88** » Tue Nov 28, 2006 9:25 pm

Wow, thank you very much for your quick response. I still need to understand what a CREDIT on these taxes means. If I understand correctly, I can claim that I have paid these taxes in the US, and subtract an that amount from the final taxes payable to Canada. Is this correct? will I get a credit on 100% of what was paid as taxes in the US?

Thank you very much for answering some of my basic questions.

nelsona · Post by **nelsona** » Wed Nov 29, 2006 10:26 am

There are 2 lines on your return (one fedearl and one provincial) were these are claimed.

All your US taxes will be eligible against the Cdn/Prov taxes you pay on your US income. There ia a calculation involed, which may or may not yield 100% use.