Canadian taxes on US stimulus benefit?

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Ron.Henderson
Posts: 76
Joined: Sun Jan 06, 2019 2:24 pm

Canadian taxes on US stimulus benefit?

Post by Ron.Henderson » Sat Aug 15, 2020 1:08 pm

This seems to be generating confusion among dual citizens in Canada who've receive the $1200 US stimulus benefit. It's a tax credit as far as the US is concerned, but is it taxable income as far as CRA is concerned?

I would assume not but Google yields no definitive answer. I would also assume it should be treated the same as the child tax credit payments, but Google didn't provide much insight on that question either.

nelsona
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Location: Nowhere, man

Re: Canadian taxes on US stimulus benefit?

Post by nelsona » Sat Aug 15, 2020 4:15 pm

This is a much better source than Google (unless google points you directly to this forum. ;o)

See:
viewtopic.php?f=2&t=212068
The stimulus is not a new animal, therefore one can assume tax treatment in US (and Canada wil be the same as last time.

None of these benefits are directly reportable as income in Canada.

The only way it could indirectly affect your Cdn taxes is if you generally owe US tax, and use the US tax as a credit, since it *could* lower your foreign tax credit. This is what happens, for example with the Child tax credit.

HOWEVER, the 2009 stimulus was treated like a PAYMENT against your US taxes. NOT as a credit. This one will be treated the same. Therefore it does not reduce your US tax, and does NOT lower your foreign tax credit for Cdn purposes, so it not taxable in canada, neither directly, nor indirectly.

If it were a credit, like the Child tax credit, then it would reduce your US taxes, and lower your foreign tax credit, if you use that.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Ron.Henderson
Posts: 76
Joined: Sun Jan 06, 2019 2:24 pm

Re: Canadian taxes on US stimulus benefit?

Post by Ron.Henderson » Sun Aug 16, 2020 9:15 pm

Thanks, had forgotten that.

Seeing some very amusing reports of people suddenly receiving stimulus cheques despite having renounced circa 2014 and never filed since.

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