How to get credit for CPP paid in Canada on US Return

[trevamy]

I am a dual citizen and have lived in both countries. Currently I live in Canada and am trying to figure out how to get a "credit" for CPP paid in Canada. When I do my US tax return I get a SS/Medicare owed amount and from what I've read I should be able to gain some credit for having paid CPP in Canada and not be double taxed. However, I can't find the specific reference to this, can anyone please help!

thanks!!!

[nelsona]

You do not owe SS/Medicare. Period. While I try not to delve into software questions, there is proably an option to exclude the foreign wages from the SS calculation (do not fill out a fake W-2 for your Cdn wages, for example).

The CPP you pay is NOT a credit towrds SS. You simply pay into the sytem of the country of residence, and nothing to the other. The only exceoption is if you were a temporary transfreee to Canada for mUS, in which case you would not pay CPP, but would pay SS>

CRA will issue you a ceretificate of coverage/complaiance that you would show IRS showuing that you are not subject to SS for the Cdn wages.

IRS Publication 54 talks about this.

[trevamy]

Thanks so much! So if I do a 1040-NR then I don't need to worry about Schedule SE I would think. This is my first year doing a Non-Resident Return and my accountant has never done one either so we're both in the dark, haha. I don't think he's enjoying it either. I had done up the 2555, Schedule C and SE, but the 1040-NR may not require the SE form. Any ideas or suggestions on that NR would be appreciated, thanks!

[nelsona]

You are not allowed to do a 1040NR.

You are a US citizen and must contnue to file a 1040 every year -- reporting all world income, and then doing exclusions etc. Your accountant should know this, or you should find another accountant.

Are you self-employed? Otherwise schedlue C and SE don't apply to you anyways.

[trevamy]

Good point, I hadn't realized that.... arggg! My accountant has never done this and is really helping me try to get it taken care of but I think his preference might be to not deal with it after this, haha. I moved to Canada, he had done my taxes in the US for a number of years... I don't think either of us realized how complicated this could get.

I am considered self-employed so I'll need to use Schedule C and SE. What about Form 1116 and 2555?

Thanks

[nelsona]

What about them? 2555 is to exclude earned income and 1116 is to get credit for Cdn taxes paid on Cdn income reported on your 1040.

If your accountant is not able to use his tax software to fill in a 2555 and a 1116, you need to get a better accountant -- is he your cuzzin or something ;o)

[trevamy]

Point taken, what is your fee? Email me a number to call at vcat50@hotmail.com please