question about calculating back and forth tax credits

[lanman2000]

When claiming US taxes paid on my Canadian return as foreign tax credits how do I handle US source income earned while residing in canada? That is lets say for example I have 100,000 of US source income for the year on my US tax return and i figure out the tax on that but lets say 10,000 of that income was earned while living in Canada. I assume I carryover the US taxes paid on JUST that 10,000 since the 10,000 is all i'm going to declare on my Canadian return since the other 90,000 was earned while not residing in Canada and thus is NOT taxable in Canada . For this I assume I should just do a calculation like :

US tax carried over to Canadian return = Effective tax rate X 10,000

or like:

10,000/100,000 is 10% so I bring over 10% of the total us tax from the us return over to the canadian return

right?? i hope my question makes sense. Its hard to articulate....

[nelsona]

You take the ENTIRE US income tax that you owe, and divide by the ratio of US income you are reporting form your 1040.

So, if you have $100K of income, and are reporting $10K on your Cdn return, then 10% of the total tax is eligible for the credit.

Same for any state tax.

As for FICA, the ratio would be your total wages divided by the wages reported on your Cdn return.

[lanman2000]

Ok thanks thats what I figured.

So for FICA, it would obviously be limited the income ceiling for SS right? I know there is no ceiling for Medicare.

[nelsona]

sure