FTC not offsetting US taxes simply due wages being above a certain amount
Moderator: Mark T Serbinski CA CPA
FTC not offsetting US taxes simply due wages being above a certain amount
Hi, I'm a US person residing and earning wages in Canada, and while filling out my US tax forms, I found that the AMT kicked in and the foreign tax credit is not zeroing-out my US taxes. Here's a simplified example: Canadian wages of $150,000 USD, Canadian taxes of $50,000 USD. If I fill out the US tax forms with these values, the regular Form 1116 gives me a full credit for US taxes, but the AMT version of Form 1116 reduces the FTC by about $2,000 USD, and my Form 6251 yields an AMT of about $2,000 USD, not zero.
Re: FTC not offsetting US taxes simply due wages being above a certain amount
Whoops, I hit enter too early. Here are my questions:
1. Did I make a mistake, or for 2022 does any income above about $137k cause the AMT to kick in and not zero out my US taxes?
2. If indeed I have to pay the US $2k due to the AMT FTC not offsetting my US taxes, can I clam that $2k (after converting to CAD) on my Canadian return as a foreign tax credit?
1. Did I make a mistake, or for 2022 does any income above about $137k cause the AMT to kick in and not zero out my US taxes?
2. If indeed I have to pay the US $2k due to the AMT FTC not offsetting my US taxes, can I clam that $2k (after converting to CAD) on my Canadian return as a foreign tax credit?