I have an interesting question if someone wants to answer: Canadian citizen only, moved back from usa to Canada July 2020. Filing form 1040 for full tax year. Due to covid, made a little employment income and passive bank interest in usa, passive bank interest Canadian bank also. Did my 1040, because of low income, required to pay IRS $3500 for the year, but, because of their child tax credit adjustment, I owe no IRS taxes and get to keep the $3500. So technically I owed taxes but got it back.
It's probably a no brained (but I've been surprised before) that I am Not allowed to claim the foreign tax credit to the CRA cause I never did pay federal usa taxes. I imagine the reverse is true for the cra taxing me on a small amount of Canadian earned income as a new resident, but with tax credits, I don't actually owe them anything.
The reason I'm interested is I still have room in my child tax credit so if I did pay foreign taxes, I could use that to maximize my child tax credit refund. If that's possible at all.
Foreign tax credit
Moderator: Mark T Serbinski CA CPA
Re: Foreign tax credit
The child tax credit reduced your US tax, and thus reduced US tax available for tax credit on your Cdn return.
The stimulus payments are NOT considered as lowering your US tax.
Don;t forget that on your 1040, you must also include any Cdn income you earned.
The stimulus payments are NOT considered as lowering your US tax.
Don;t forget that on your 1040, you must also include any Cdn income you earned.
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