How to report US income while resident of Canada

Nishant · Post by **Nishant** » Sat Nov 14, 2009 5:36 pm

We are Canadian citizens who moved to US last year. Due to small period last year, we filed 1040NR. This year we qualify for substantial test and will file 1040 since family, job and house is in US since second half of 2009.

We have US income from first half of 2009 while we were deemed resident of Canada. Traditionally we would show this on Canadian return in previous years.

Do we show this only on Canadian return or also show on 1040 and show as a part of world income and claim credit on tax paid to Canada since it is US sourced income?

Please advise.

nelsona · Post by **nelsona** » Sat Nov 14, 2009 7:39 pm

You said you moved "last year", and now you say you were "deemed resident of canada" at some point this year. Which is it?

(I suspect you use of the term "deemed resident" is incorrect as this is a term with specifc maening and implications that I'm sure you don't meet, you were simply resident until you left, and then became non-resident).

In any event, US income earned for the portion of the year while you were resident in canada would be reported on both your US full-year 1040 and on your Cdn departure return, and you would take credit for the US tax you paid on this income on your Cdn return (prorated by what was calculated on all your US income on your 1040).

Nishant · Post by **Nishant** » Sat Nov 14, 2009 9:00 pm

Hello Nelsona,
Sorry for not clarifying earlier. I moved first last year. Family moved this year after school year end. Hence deemed resident term for first half of 2009.

Nishant · Post by **Nishant** » Sat Nov 14, 2009 9:01 pm

There was no tax deduction at source on US income while in Canada hence can we claim credit on accured tax?

nelsona · Post by **nelsona** » Sat Nov 14, 2009 9:03 pm

Again, you were not "deemed resident". You were resident.

I would argue that you were deemed non-resident, if you spent all of your time in uS after you moved (I believe we went over your case). But you were NEVER deemed resident, as this applies to military and govt employees overseas.