Canadian T4E on US taxes
Moderator: Mark T Serbinski CA CPA
Canadian T4E on US taxes
Hello
Thanks for all your help last year!
I moved to the USA on a K1 visa in October 2013, was married Nov 2 2013, and received EI income from Canada while looking for work (February 2014 - August 2014).
I received a T4E from the CRA, and I am wondering if I have to include this on my US taxes, or is this just for information. Or do I need to file my Canadian taxes again and include this information? I filed my exit return last year, and included/excluded my CDN income on my US return.
Thanks!
Mark
Thanks for all your help last year!
I moved to the USA on a K1 visa in October 2013, was married Nov 2 2013, and received EI income from Canada while looking for work (February 2014 - August 2014).
I received a T4E from the CRA, and I am wondering if I have to include this on my US taxes, or is this just for information. Or do I need to file my Canadian taxes again and include this information? I filed my exit return last year, and included/excluded my CDN income on my US return.
Thanks!
Mark
I'm still trying to figure out the US taxation issues, but I do know for certain through discussion with Canada Revenue agency, that we do not include the T4E numbers on our Canadian return for 2014.
I had initially added it in as part of my income, but once I confirmed it was not to be included, removed it from line 119 and of course the tax withheld, from line 437. That essentially increased my refund by $500!, lucky for me.
If my reading so far is correct, once residency starts in the US, we do need to have the US be aware of our worldwide income and am hopeful that it qualifies for a foreign tax credit since the required 25% withholding taxes were removed in Canada (yes, 25%, which I confirmed both with CRA and EI, as I had hoped it was like most other incomes taxed at only 15%)
I had initially added it in as part of my income, but once I confirmed it was not to be included, removed it from line 119 and of course the tax withheld, from line 437. That essentially increased my refund by $500!, lucky for me.
If my reading so far is correct, once residency starts in the US, we do need to have the US be aware of our worldwide income and am hopeful that it qualifies for a foreign tax credit since the required 25% withholding taxes were removed in Canada (yes, 25%, which I confirmed both with CRA and EI, as I had hoped it was like most other incomes taxed at only 15%)
I ask to be sure you filed exit return in 2013, 217 works differently in departure year.
You'll have to try 217 in software (ufile will work) . it probably won't be tax-free because most of your income was from US, but you'll have to run the numbers.''Of course the lower you Cdn tax, the lower your US tax credit.
You'll have to try 217 in software (ufile will work) . it probably won't be tax-free because most of your income was from US, but you'll have to run the numbers.''Of course the lower you Cdn tax, the lower your US tax credit.
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Good thread.
Can anyone confirm that T4E income (from EI) and T4RSP income (fom cashed out RRSP) don't need to be reported on a Canadian tax return if that income was received by a non-resident of Canada living in the U.S at the time? If so, does this hold true whether or not one is making a Section 217 election?
More generally speaking, under what scenarios is making a Section 217 election for Canadian EI and RRSP income better than simply claiming a foreign tax credit on a 1040? Is it best to just run both scenarios with tax software and see what comes out best?
Can anyone confirm that T4E income (from EI) and T4RSP income (fom cashed out RRSP) don't need to be reported on a Canadian tax return if that income was received by a non-resident of Canada living in the U.S at the time? If so, does this hold true whether or not one is making a Section 217 election?
More generally speaking, under what scenarios is making a Section 217 election for Canadian EI and RRSP income better than simply claiming a foreign tax credit on a 1040? Is it best to just run both scenarios with tax software and see what comes out best?
It should not be reported UNLESS you are making a 217 election. Even then, when doing 217 in your departure year, you need to contact CRA.
The reason you want to use 217, if eligible, is that unless you are single, or your spouse doesn't work either, the 1116 usually doesn't use up the 25% tax (especially the RRSP portion, since very little of your RRSP is taxable in US), so you want to minimize the CDn NR tax on that income.
The reason you want to use 217, if eligible, is that unless you are single, or your spouse doesn't work either, the 1116 usually doesn't use up the 25% tax (especially the RRSP portion, since very little of your RRSP is taxable in US), so you want to minimize the CDn NR tax on that income.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing