additional child tax credit

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Montreal_us
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Joined: Thu Jun 09, 2005 3:33 pm

additional child tax credit

Post by Montreal_us »

Since 2001 the ACTC has been available to US citizens living in Canada with eligible children. Is the amount received, taxable in Canada? In addition, is federal (and Quebec) family allowance received to be reported on the 1040?
nelsona
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Post by nelsona »

Just to clarify, the IRS additional child tax credit is, in most cases, whatever credit you would be entitled to if you owed taxes, but since your income is low, it really becomes a refund.

IRS uses the term 'refund', so I wouldn't be worrying about reporting it to CRA, since refunds is not income.

I would also lump all the CCTB and family allowance as 'social benefits' which generally are not taxable in the other country.

To receive all of these you pretty much have to have low world income, so the tax on this money even if it were reportable would be very little.

<i>nelsona non grata... and non pro</i>
Montreal_us
Posts: 10
Joined: Thu Jun 09, 2005 3:33 pm

Post by Montreal_us »

Thanks for the reply. However I can see that a family of five kids and an income of $75,000 US you can max out at $5,000 of a refund using the 1116 and exemptions and other deductions etc.. With close to $100,000 Canadian income adding that $5,000 US would cost close to 50%,so thanks for the answer that CRA shouldn't get their hands on it. Unrelated question, have you ever heard that a canadian source scholarship would qualify as earned income as far the 8812 is concerned?I've heard conflicting opinions.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

My comment on low income was in regards to getting CCTB, which is for low income.

Personally, I think all Cdns should start filing 1040's and get that money too. The tax treaty would probably allow it under non-discimination.

The scholarship would have to be reported on the worksheets or on 8821, even if it is from Canada.


<i>nelsona non grata... and non pro</i>
Montreal_us
Posts: 10
Joined: Thu Jun 09, 2005 3:33 pm

Post by Montreal_us »

I guess it depends on the definition of low income.as the benefit is paid per child a large family can still be earning a modest income and receive benefits. For example a family with 5 children earning $75,000 canadian would still receive over $10,000 in family allowance.(quebec resident)
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

Again, I repeat that the CCTB is for low income earners.

<i>nelsona non grata... and non pro</i>
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