I left Quebec to work int the US on May 20, 2007. I severed all my ties to Canada/Quebec. According to Quebec tax guide, I need to pay premium for the Quebec drugs insurance plan for the time I was in Quebec if I did not have private insurance plan.
I use ufile to file my tax return. It asked for my departure date and how much income I made while I was not a resident of Canada. When I put the actual amount of my income it shows a 200$ of Quebec drugs insurance premium. On Quebec TP-1 form box 19 it says "enter the income you earned while you were not resident in Canada".
My understanding is that as a emigrant I do not need to report my US income to Canadian/Quebec government. Am I right? Do I need to pay the 200$ Quebec drugs insurance premium? If so, Can I use it as a tax credit on the US return?
Quebec drugs insurance premium for emigrants
Moderator: Mark T Serbinski CA CPA
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dhirenasha
- Posts: 57
- Joined: Fri Nov 23, 2007 9:31 am
- Location: USA
I cannot comment on the Quebec insurance program, but Turbo Tax standard Candian edition for Ontraio did not ask any questions about the income made after we left Canada. When we filed return we used the Ontario forms. As far as I had absorbed from this site, we should not be reporting the USA income in the Canadian return if you are filing in Canada as an Emigrant/US resident in USA.
dhirenasha, Thanks.
It might be specific to formal Quebec resident
After reading the Quebec tax guide. It seems to me that the Quebec drugs insurance premius for the whole year is 574.5$. Since I left in May 2007, I don't need to pay the insurance premium from May to Dec. If my total world income for the whole year was above 13000CAD, the prorated premium I should pay is around 200$.
If I do not report my US income while I was not a Canadian resident, I do not need to pay this premium at all.
Nelsona, could you clarify on this?
It might be specific to formal Quebec resident
After reading the Quebec tax guide. It seems to me that the Quebec drugs insurance premius for the whole year is 574.5$. Since I left in May 2007, I don't need to pay the insurance premium from May to Dec. If my total world income for the whole year was above 13000CAD, the prorated premium I should pay is around 200$.
If I do not report my US income while I was not a Canadian resident, I do not need to pay this premium at all.
Nelsona, could you clarify on this?
Whether you need to pay the drug premium is determined month by month.
So for the first 5 months of the year, you must determine if you need to pay or are excused (due to being covered at work).
THEN, you use your reported income.
So for the first 5 months of the year, you must determine if you need to pay or are excused (due to being covered at work).
THEN, you use your reported income.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
In Pub 514
Your foreign tax credit cannot be more than your total U.S. tax liability (line 44 Form 1040) multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. To determine the limit, you must seperate your foreign source income into categories.
My taxable income from sources outside the US is only bank interest (around 700$). The Quebec premium is accrued because of my US income. Does that mean I cannot use the 200$ drugs premium tax as foreign tax credit in my US return using the form 1116?
Your foreign tax credit cannot be more than your total U.S. tax liability (line 44 Form 1040) multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. To determine the limit, you must seperate your foreign source income into categories.
My taxable income from sources outside the US is only bank interest (around 700$). The Quebec premium is accrued because of my US income. Does that mean I cannot use the 200$ drugs premium tax as foreign tax credit in my US return using the form 1116?
Of course you can only get a foreign tax crdit in US if you owe US tax. If you only made $700 in canada last year (I guess you wer enot working?) then you can only expect to have about $100 US tax on that income. That will be the limit of your foreign tax credit, regardless of how much you owed/paid in Canada.
Are you reporting your Cdn wages on 1040? Are you excluding them by form 2555? Are you doing the QC form correctly?
Are you reporting your Cdn wages on 1040? Are you excluding them by form 2555? Are you doing the QC form correctly?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
I did not work in Canada before I came to US, therefore, I have no Canadian wages to report on my 1040.
On my Quebec return, I used ufile to do my taxes. Ufile added a schedule K ( Drugs insurance plan ) and Quebec world income statement to my Quebec return. If I do not report my US income, the tax I owe is zero. When I put the actual amount in Ufile emigrant tab, it show tax I owed (drugs insurance premium ) is 200$.
I cannot claim this Canadian tax I paid as foreign credit in my US return since my Canadian income is too small. Right?
On my Quebec return, I used ufile to do my taxes. Ufile added a schedule K ( Drugs insurance plan ) and Quebec world income statement to my Quebec return. If I do not report my US income, the tax I owe is zero. When I put the actual amount in Ufile emigrant tab, it show tax I owed (drugs insurance premium ) is 200$.
I cannot claim this Canadian tax I paid as foreign credit in my US return since my Canadian income is too small. Right?
You said you had interest income. This is reported in US and taxable, so you can use the QC tax against this.
Or, you can simply use the $200 as a deduction on schedule A, if you are itemizing.
Or, you can simply use the $200 as a deduction on schedule A, if you are itemizing.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
I don't need to file form 1116 since it is a passive income. Right? One of the requirement of not using form 1116 is "all of your gross foreign income and foreign taxes are reported to you on a payee statement ( such as a form 1099-DIV or 1099-INT ). Does this mean I should file 1116 and apply the foreign credit limit using this formula?
No. You must use 1116. You did not receive 1099 statement. Foreign tax receipts do not qualify for this teatment. This applies only to foreign tax withheld and reported on 1099, which is often the case when one holds foreeign stocks or mutual funds in a US portfolio.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
I emigrated from Canada/Quebec in May. On Quebec return TP-1 box 19, enter income you have while you are not a Canadian resident, I report my world income (including US income) there. Do I need to use the my world income or Canadian income only to calculate my drug insurance premium on Quebec Schedule K? Since my Canadian income is low, I don't need to pay any premium. Which income should I use?
Line 19 should contain only the income you earned after leaving. Period.
Line 275 of tp-1 , which is the income used by Schedule K, should not incude any of this ammount. Does it?
Line 275 of tp-1 , which is the income used by Schedule K, should not incude any of this ammount. Does it?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best