GST/HST/LITC

[GlobalCitizen]

I have been diligent about filing my taxes in US and Canada every year, but recently started to worry about some refundable credits--namely, the GST/HST rebate and provincial Low Income tax credit I receive each year. Is this reportable on my 1040?

[nelsona]

The GST/HST credit as simply a return of sales taxes, so no worries thre.
As long as the various LITCs do not reduce your income tax on your return (thus reducing tax you can use on your 1116), these are non-events from a US tax point of view.

[GlobalCitizen]

Thanks Nelson. Since my income is too low to actually owe Canadian tax, I have always taken the earned income exclusion rather than the foreign tax credit. So I should be fine.

[nelsona]

That's fine.
But do remember that FEIE only accounts for EARNED income, which is only wages. All other income and its Cdn tax must be claimed on 1116, if you need to.

And FEIE prevents you from getting any child tax credit on your 1040. which using 1116 would probabaly allow. If you have kids, FEIE is probably not the best way to go, although it is the easiest.

[GlobalCitizen]

Thanks for that. I'm for the child tax credit anyway as my children are not US citizens. I was born abroad and haven't lived in the US for the five years required to pass on my citizenship.

[GlobalCitizen]

*not eligible for the child tax credit

[nelsona]

Hve you gone thru the steps on the IRS form for the "additional" credit. US citizenship is not a requirement.

[GlobalCitizen]

What I see there is child must be a "US citizen, US national, or US resident alien". Still don't qualify.

[nelsona]

Good, just making sure you went through the exercise.