Determining Canadian foreign 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.

Moderator: Mark T Serbinski CA CPA

Post Reply
taxcanus
Posts: 3
Joined: Sun Feb 21, 2021 3:10 am

Determining Canadian foreign tax paid

Post by taxcanus »

Can someone tell me exactly how to determine the Canadian "foreign tax paid" for filling out IRS form 1116 (Section II)?

Is this essentially the amount found on Line 43500 of the Canadian T1 return? So, "total payable tax" excluding all the credits such as Canada Workers Benefit, etc?

Line 43500 contains net federal and provincial taxes as well as mandatory self-employment CPP contributions.

All of the Canadian income is general, active, business income from self-employment - no passive investments.
nelsona
Posts: 16793
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Determining Canadian foreign tax paid

Post by nelsona »

First off, it is usually best to use foreign tax accrued rather than paid, since "paid" is on a caledar basis rather than a tax year basis.

So, there is no one line that fits the bill. The states has the same problem when they give credit for federal tax. They add certain lines and subtract others.

The simplest way to do it is to add your withholding and installments (lines 43700 + 47900) +/- your balance owing/refund.
If you have EI premiums add those. Your slef-employment CCP and provincial taxes are is already included in your balance.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
Post Reply