US Income declared as Foreign Income to CRA

[samyvakil]

Hi,

I am a Canadian citizen working in US. I am a resident alien of US for 2010 tax. If in addition to US I file my tax in Canada as a resident and declare my US income and taxes paid in the US as foreign income and tax to CRA I will owe taxes to Canada.

I am wondering if I can declare this extra tax paid to Canada anywhere on IRS form 1116 as a foreign tax credit?

Basically, the main source of the income is US. However, If I delcare it to Canada and take credit for the taxes that I have paid to US I will still owe Canada (due to Ontario Health care Premium). My question is whether this can be claimed as a Credit for US tax.

Thanks!

[nelsona]

is there a reason you are still filing in canada?

You can use the Cdn tax you paid during the year and still owed as a deduction, but not a credit.

Read carefully: the Cdn tax you PAID during the tax year and still owed: Thaa means if you owe tax on your 2010 return, and pay it in April, you ca nonly deduct it on your 2011 US tax return.

What did you do when you left canada, presumably in 2009?

[samyvakil]

Thanks for your reply. I left Canada in 2008. I own a home in Canada and have stock investment income as well. Can I still be considered as non resident for Canadian tax purpose?

[nelsona]

of course. what ties do you have in US?

[samyvakil]

I have only been working in US. My filing status is single and have rented a place in US.

[nelsona]

So you should amend past return to say you departed in 2009.