Foreign tax Credit-- how to file correctly

[maskdoll]

After going through previous posts on this topic, I just want to make sure I understand it correctly.

For US filing, on Form 1116, we can use Canadian tax actually paid during the filing year, in sometimes it's over paid, as we would get refund the next year.

For Canada Filing, on form T2209, we use US tax that we should pay, which are the numbers on places on 1040 form, not the actual tax withheld from W-2.

Correct?

[maskdoll]

One more question, for form T2209, "foreign income": is it total gross income without any standard/itemized deductions? E.g., wage + interest+dividend+capital gain. Can we just "adjusted gross income" or "Taxable income" in 1040?

[nelsona]

For 1116, you can use the tax paid, but if it is refunded later you must amend your 1116. It is simpler to use accrued methos.

for Canada (and your software will handle this) the foreign income is the amount of US income you report on your Cdn return, so it does not matter how your 1040 handles it. It doers not include capital gains or interest, since these cannot give rise ti a tax credit in Canada.