UCCB

rantaya · Post by **rantaya** » Sun Feb 28, 2016 12:34 pm

Hi,

I was wondering if the UCCB is considered a paid tax or accrued tax in terms of filling out the form 1116 Foreign tax credit. I am putting it under general income. They ask for a date tax paid, but really I only pay tax on it once a year when doing my Canadian tax return, so what would I put there? thanks, Rachel

Frankd1 · Post by **Frankd1** » Sun Feb 28, 2016 10:25 pm

I'm pretty sure it is recommended to use accrued for form 1116...
If you type accrued into the search bar you will get some threads that come up explaining this.

Stevecanada · Post by **Stevecanada** » Mon Feb 29, 2016 12:59 am

Another question on the UCCB. I am a dual US-Canadian citizen, my wife is only Canadian. We are both residents of Canada. I file in the US as married, filing separately (my wife does not file US taxes). I am the higher income earner, so my wife is the one who includes the UCCB on her Canadian taxes.

My question: Should I report the UCCB on my 1040? Or, since I do not include the UCCB on my Canadian taxes, should I also not include it on my 1040?

Thanks for any help you can provide.

Frankd1 · Post by **Frankd1** » Mon Feb 29, 2016 9:22 am

I don't believe there is any requirement in your case to include the uccb on your 1040.
Your wife does not have a filing obligation with the IRS and you are filing mfs.
The rc62 that CRA sends you for the uccb will be in your wife's name and she shows it on her CRA return.

rantaya · Post by **rantaya** » Mon Feb 29, 2016 11:31 am

thanks Frank. I was thinking accrued, but wanted a second opinion. Do you just leave the date paid part blank then? I've read some of your other posts and I was wondering what exchange rate web page you ended up using to go from Canadian to US dollars when filling out form 1116. thanks, Rachel

nelsona · Post by **nelsona** » Mon Feb 29, 2016 9:54 pm

UCCB is not a tax. It is income. Any portion that is taxable in Canada is taxable in US.

rantaya · Post by **rantaya** » Tue Mar 01, 2016 11:00 am

true, it isn't a tax, but government income. The whole amount is taxable in Canada. However, I read on here that after I report it as other income on the 1040, I can take a foreign tax credit on it since I'm already paying tax on it in Canada. This would be form 1116, would it not?

nelsona · Post by **nelsona** » Tue Mar 01, 2016 11:43 am

Yes, of course. General limitation income for 1116 purposes.
Since you are living in Canada, it is preferable to use the accrued method, as this will be more easily tracked from year to year

rantaya · Post by **rantaya** » Tue Mar 01, 2016 11:52 am

thanks, and since it is accrued, is it best to just leave the date box empty?

nelsona · Post by **nelsona** » Tue Mar 01, 2016 12:38 pm

Your software will tell you this.