Canadian fellowship for US work. Help Please.

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matthewr87
Posts: 2
Joined: Sat Apr 07, 2018 9:30 pm

Canadian fellowship for US work. Help Please.

Post by matthewr87 »

Hello,

I am a Canadian citizen working as a post-doctoral fellow in the USA on a TN visa. I am considered a US resident for tax purposes. Because I am here temporarily, and have assets in Canada, I am still a deemed resident of Canada.

I receive a fellowship from the Canadian Institutes of Health Research that covers part of my salary here in the US. I receive a T4A for that income. Since the work is performed in the USA the IRS considers it US sourced income. I also receive a small salary from the US institute where I work in US funds for which I receive a W2. I have adjusted my witholding to the level of my total salary (fellowship + US salary).

The problem is that since I receive a T4A for the fellowship income, I do not receive any credit for the tax I paid in the US already. Canada does not consider it foreign income. In effect I am paying double tax on my Canadian fellowship. I was wondering if anyone had any advice on how to work through this.

Thank you.
Bubba Gums
Posts: 54
Joined: Tue Jul 15, 2014 7:20 am

Post by Bubba Gums »

Did CRA determine that you are a "deemed resident"? Assets, in general, would be insufficient to make one a resident of Canada. You may be a US resident, but still owe Canada tax liability as your income is Canadian sourced and this seems reasonable since you received a T4A.

While the "work" is performed in the USA, the treaty may resource it to Canada. Who sent you the T4A? Did you pay FICA or FUTA on that portion of your income?

I think you will be able to get your money back from the US treasury either by treaty (8833) or by credit (1116). You might consider filing for an extension so you can learn more. If you do get money back you might consider filing with your university to lower your rate of withholding.
matthewr87
Posts: 2
Joined: Sat Apr 07, 2018 9:30 pm

Post by matthewr87 »

Thanks for the input.

T4A was sent to me by the Canadian Institutes of Health Research (CIHR) which is a federal granting agency.

I think the problem in this case relates to the sourcing of the income.

In the USA when I enter W2 information (for the portion of my salary that comes from my US institute), it gives me the option to say that this money was earned for work in another country (which it was not in this case). However, I do not see a similar option for T4A on the Canadian side, which is what the ideal scenario here would be I believe. I have reached out to the CRA to see what they say about this.

In any event, I am probably going to claim a foreign tax credit (1116) on the amount of tax paid to the CRA for that same CIHR fellowship income, and I'll get most of my excess with holding back. Then I'll just adjust my US with holding to not account for the Canadian income.

Hopefully that works.
Griffchard
Posts: 1
Joined: Fri Apr 29, 2022 2:30 pm

Re: Canadian fellowship for US work. Help Please.

Post by Griffchard »

Have you ever thought about finishing your education in the USA? Well, that is, if you work here, then you probably plan to stay here. It seems logical that you should enroll in some of the educational institutions in the USA. For example, asa college hialeah https://miami.asa.edu/ and some others have very good reviews. It would solve your problem with double taxation, and I think some other problems can also be solved in this way. But this is just my opinion, and to be honest, I don't understand much about such subtleties.
BettySwenson
Posts: 2
Joined: Thu Sep 07, 2023 2:56 am

Re: Canadian fellowship for US work. Help Please.

Post by BettySwenson »

I can't help you.
Betfner20
Posts: 22
Joined: Fri Feb 09, 2024 5:31 am

Re: Canadian fellowship for US work. Help Please.

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