CDN Tax Return - Calculate Foreign (US) tax paid?

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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cooltoronto
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Joined: Sat Jul 18, 2020 2:26 pm

CDN Tax Return - Calculate Foreign (US) tax paid?

Post by cooltoronto » Sat Aug 29, 2020 12:55 pm

Working on TN visa in US. Has property and ties to Canada and also buying investment property in Canada . So we are resident of Canada for tax purposes. We filed the US return and just in process of filing CDN Tax Return. For estimation of tax owing I am using Turbotax Canada software. Most likely will file with an accountant but just using Turbotax for calculation/education purposes.

Once I add Foreign income then it asks for foreign tax paid. In my W-2, I see section : Federal tax withheld, Social security and Medicare taxes and in Column 17 there is Sate tax. My question is what amount should I write in "Section Foreign tax paid". Do I add all of the tax mentioned above or (i) Its just Federal tax withheld or (ii) just combination of Federal and State income tax only.

nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Re: CDN Tax Return - Calculate Foreign (US) tax paid?

Post by nelsona » Sun Aug 30, 2020 8:04 am

First, Living and working in US makes one a CDn non-resident. The ties in Canada you mention are insufficient to keep you resident, unless it is a wife and kids which you visit regularly.

If you are still considered Cdn resident, the the social security and medicare taxes on your W-2 are eligilble.
For fed and state tax, the taxes determined on your US tax returns (fed and state) will be eligible for credit, not the amounts withheld.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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