Living in US, Crossing Border to Work in Canada daily

jonathonstate · Post by **jonathonstate** » Fri Dec 14, 2007 5:14 pm

Hi, I live in a border town (Detroit) and am looking into the possibility of commuting on a daily basis across the border to work in Canada (made possible by the strength of the Canadian $). I am a dual citizen of both countries.

I have a few questions:
1) Would I be taxed in Canada, or the US. If I'm taxed in Canada would I get a US tax credit?

2) What about State versus provincial taxes?
3) What about Medicare/Social Security vs Canadian employee taxes?
4) I pay the AMT currently. If I get a US tax credit for taxes paid in Canada - will I lose some of this credit due to the AMT

I'm am looking for a general answer and realize that to fully evaluate this situation I'll need a consultation.

Thanks!

nelsona · Post by **nelsona** » Fri Dec 14, 2007 6:02 pm

Your WAGES only would be taxed in canada, at the provincial rates. You would file an Fed/Ontario return, with some mods made for the fact that you are not resident.

These fed and prov taxes (and CPP and EI) would be credited on your US return.

The states do not generally give any foreign tax credit. Check with MI.

The AMT is in such flux now that it is hard to say what the FTC will have as an effect. I do know that foreign tax credit is not supposed to adversely affect your AMT position (ie. your foreign tax credit doesn't make your AMT increase).