More tax credits on Canadian side

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sajc
Posts: 16
Joined: Sun Apr 12, 2020 5:55 pm

More tax credits on Canadian side

Post by sajc »

Hi Nelsona

Hope you are well during this chaotic period. I have a question regarding the TN US-Canada tax issues. I live in Canada and work in USA as aTN commuter. From what I have read on the forum, the main assumption is that US taxes are less than Canada taxes, so there is not a real advantage in reducing the taxes on US side.

I am in a different scenario where I have more tax credits on the Canadian side (due to disability tax credit for my child). I cannot claim my child tax credit on the US side as we don't have a ITIN.

I see that by applying ITIN for my child, I could get the $500 credit. Is that correct? Is there any other way in the treaty that I could bring my taxes on the US side lower?

Thank you
Saj
nelsona
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Re: More tax credits on Canadian side

Post by nelsona »

As exlained many times, you can file a "pro forma" joint tax return with your spouse, even if they live outside US, and pay tax married tax rates and standard deduction. That is for exactly that situation.

It is an XXV return.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
ND
Posts: 173
Joined: Thu Feb 21, 2013 5:28 pm

Re: More tax credits on Canadian side

Post by ND »

Investigate whether Reg § 301.6114-1(b)(1) requires including 8833 with your return. "...a list of particular positions for which reporting is specifically required....That a nondiscrimination provision of a treaty precludes the application of any otherwise applicable Code provision...
nelsona
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Re: More tax credits on Canadian side

Post by nelsona »

It is always a good idea to include an 8833 when using the treaty., even just to explain what you are doing. if you can do the XXV(2) return, the 8833 is simple.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
sajc
Posts: 16
Joined: Sun Apr 12, 2020 5:55 pm

Re: More tax credits on Canadian side

Post by sajc »

Thank you very much for your answers. Much appreciated!!
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