In my first tax returns after moving to the US last year, I was careful to navigate the maze of residency rules for all four of my tax returns. Notably, in the Quebec case, the instructions they provide for nonresidents clearly states that the "basic personal amount" deduction has to be prorated by the amount of time spent in the province. I went ahead and did so in my tax return, but then last week I received a letter saying that they had "corrected an error" in my return, and it appears to be that they brought back the basic personal amount to the usual full-year amount that 99% of taxpayers use. They went ahead and deposited in my bank account nearly 1000$ more refund than I had asked for.
What are my responsibilities in such a case? I don't desperately need this extra money or anything, and I'm willing to call them to correct their error if I have a duty to do so and penalties may be assessed on me in the future if they later correct themselves. But of course, I'd be happy to keep it if by being above-board in my initial return I have already done all I legally need to. And what if, after contacting them, they insist my return was wrong and they were right; at what point have I fulfilled my obligations and can let it go? It would be absurd to get into a long bureaucratic battle to give away money.
Quebec tax agency made a mistake in my favor
Moderator: Mark T Serbinski CA CPA
As long as you correctly put a departure date on your MRQ return AND entered your total foreign income for the year (lines 18 and 19) , I don't see how you should be expected to contradict them.
Of course, 2 things to remember. If you filed a full year US tax return and used some QC tax as a foreign tax credit, you now have to correct that US return for the amended tax. It might just be simpler to get the MRQ error corrected
And, be aware that MRQ can always come back and 're-correct' their error for 3 years, but you would be liable only for the tax, and no interst or penalty.
But be sure your entered lines 18 and 19 correctly.
Of course, 2 things to remember. If you filed a full year US tax return and used some QC tax as a foreign tax credit, you now have to correct that US return for the amended tax. It might just be simpler to get the MRQ error corrected
And, be aware that MRQ can always come back and 're-correct' their error for 3 years, but you would be liable only for the tax, and no interst or penalty.
But be sure your entered lines 18 and 19 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
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