Hi,
Canadian resident with TN-1 worked in California in 2020.
I plan on filing a 1040NR (and 540NR) for 2020 and had some dividend income on some short term (< 1 year) investments (~$80) and interest income (~$20) from USA bank accounts while I was in the USA. Since the brokerage didn't have a W8-BEN, they didn't withhold any tax. I have since closed my account.
1. Will I have to report this on 1040NR under Schedule NEC? Do I pay the 15% tax on the dividend as per the USA-Canada tax treaty? What treaty article should I use?
2. Do I have to do the same for the interest income?
3. How would I get a credit for this on my Canadian return?
Thank you.
1040NR Reporting Dividend and Interest Income
Moderator: Mark T Serbinski CA CPA
Re: 1040NR Reporting Dividend and Interest Income
Non-residents are not required to report bank interest (even earned in US) on their 1040NR. So nothing to claim as a foreign tax credit
As you say, include the dividend on NEC table of 1040NR. You claim the 15% as a foreign tax credit on your cdn return. Article X.2(b)
As you say, include the dividend on NEC table of 1040NR. You claim the 15% as a foreign tax credit on your cdn return. Article X.2(b)
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Re: 1040NR Reporting Dividend and Interest Income
Thank you for the reply. So it's just the same federal foreign tax credit form https://www.canada.ca/en/revenue-agency ... t2209.html that I should use? Or is there a separate one for dividends?
Re: 1040NR Reporting Dividend and Interest Income
Your software will handle this. It all goes one one line of the tax form (for fed, and for prov). It will generate the needed form(s)
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Re: 1040NR Reporting Dividend and Interest Income
Thank you. Just for clarification, I still got 1099-DIV and 1099-INT and Form 8949 forms from my broker. Will all this information still go in the NEC section of 1040NR? Thank you again for for your help.
Re: 1040NR Reporting Dividend and Interest Income
sure
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