CRA confirms that US Social Security Taxes are tax

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nelsona
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CRA confirms that US Social Security Taxes are tax

Post by nelsona » Thu Nov 25, 2004 3:14 pm

From time to time CRA wavers on their treatment of Social Security taxes, as to whether these are usable towards the foreign tax credit calculation on the Cdn tax return (for Cdn residents paying US soc Sec taxes, or FICA).

In a recent Technical Release, they have clarifid that while, in general Social Security taxes are NOT to be credited, that the US-Canad tax treaty mandates that <b>US </b> Social Security taxes ARE creditable. The social security taxes of other countries (like France and Germany) will no longer be creditable.

The IT-122 dealing with foreign tax credit, will be changed to remove the eligibility of SS taxes from credit, so it is likely that some taxpayers will see their credits for US FICA denied in the near future. <b>This treatment will be wrong</b>. The credit allowed by the treaty will continue to trump any change in interpretation, or even change in Cdn Tax code. The treaty supercedes all this.

<i>nelsona non grata</i>

nelsona
Posts: 16015
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona » Thu Nov 25, 2004 3:23 pm

The source is

http://www.cra-arc.gc.ca/E/pub/tp/itnew ... -31r-e.pdf

<i>nelsona non grata</i>

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