Hi, my wife and I got our Canadian PR in 2018 but we have only stayed in Canada from time to time, so far in total over 200 days (2018 60 days, 2019 30 days, 2020 120 days). We both work in US companies, and our annual income is 150-200K USD (my wife stopped getting paid since mid 2020).
We got paid in USD in each paycheck with taxes and social securities withheld. Now we are filing our US tax return and Canada tax return for the first time as a residence due to the significant tie (got a home in Canada 2020). I know when we report our US income to Canada, we do not need to pay double tax due to the US Canada tax treaty for the tax part we already paid to US IRS, but might still owe a lot to Canada CRA (Canada tax rate higher than US, and we live in WA US with no state income tax and BC Canada with province tax). I have 2 questions:
(1) for our case, should we use our stays in Canada during the past 3 years to save US tax? or should we use our stays in US during the past years to save Canada tax? We want to do everything we can to save our Canada/US tax through foreign tax credit as much as possible.
(2) can I use Turbotax directly to file my 2020 US tax? seems that there is no place to enter the foreign tax credit info
Thanks very much for the advices from nelsona and anyone else!
how can we save tax through foreign tax credit?
Moderator: Mark T Serbinski CA CPA
Re: how can we save tax through foreign tax credit?
First off, if you live in WA, you are not Cdn resident. merely owning a house in Canada does not make you Cdn resident, if you live elsewhere.
Where have you been performing your work?
Where have you been performing your work?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Re: how can we save tax through foreign tax credit?
Thanks so much for your reply nelsona!
Most of the times I live in WA pre-covid, and we stay in Canada from time to time after the covid started, like in BC for around 3-4 months then back to WA for 1-2 months, then back to BC again and continue this trend. We bought a house in Canada in the fall 2020, although we still honestly tell the Canada immigration officers that WA is our current permanent home and we are relocating to Canada in 2021. I agree that we are not Cdn resident, but we plan to (and want to) file Canada tax for 2020 as a Canadian tax resident with the significant tie of the BC house, as well as getting the Canada citizenship in 3 years.
I have been performing my work wherever I stay, both Canada and US. My employer knew that I got stuck in Canada for a few months, since I came to Canada last March before the border closed, although each of my paycheck with US tax and SS withheld. We are both actively looking for new jobs in Canada now.
Thanks very much for any advice nelsona!
Most of the times I live in WA pre-covid, and we stay in Canada from time to time after the covid started, like in BC for around 3-4 months then back to WA for 1-2 months, then back to BC again and continue this trend. We bought a house in Canada in the fall 2020, although we still honestly tell the Canada immigration officers that WA is our current permanent home and we are relocating to Canada in 2021. I agree that we are not Cdn resident, but we plan to (and want to) file Canada tax for 2020 as a Canadian tax resident with the significant tie of the BC house, as well as getting the Canada citizenship in 3 years.
I have been performing my work wherever I stay, both Canada and US. My employer knew that I got stuck in Canada for a few months, since I came to Canada last March before the border closed, although each of my paycheck with US tax and SS withheld. We are both actively looking for new jobs in Canada now.
Thanks very much for any advice nelsona!
Re: how can we save tax through foreign tax credit?
CRA has directives for those who live in US but are stuck in Canada due to covid. I suggest looking at that.
You are not, in my opinion, a CDn resident.
You are not, in my opinion, a CDn resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: how can we save tax through foreign tax credit?
Thank you so much nelsona! Always appreciate your valuable recommendations.
I definitely agree that I am NOT a CDn resident. Then am I correct to say, with CRA covid waiver (for non-residents 'trapped' in Canada applies to residency, not sourcing of income), I do not need to adjust my W2 to separate the US source income and Canada source income, by counting how many working days I have spent in Canada, right? I can just file US tax as normal years without worrying about Canada stays, and file Canada tax as a non-resident. This is what I got by reading from many other posts here, as well as the non-con resident feedback for me. Thanks very much for your confirmation!
I definitely agree that I am NOT a CDn resident. Then am I correct to say, with CRA covid waiver (for non-residents 'trapped' in Canada applies to residency, not sourcing of income), I do not need to adjust my W2 to separate the US source income and Canada source income, by counting how many working days I have spent in Canada, right? I can just file US tax as normal years without worrying about Canada stays, and file Canada tax as a non-resident. This is what I got by reading from many other posts here, as well as the non-con resident feedback for me. Thanks very much for your confirmation!