Richard 777

Foreign tax credit is benefit from US-Canadian treaty.  US tax law (Internal Revenue Code) never mentions the Foreign Tax Credit.  Only treaty mentions the FTC.  Treaty can override IRC in this case.  FTX is a treaty concept, not Code concept.

The total FTC will be used first by Federal until the Fedeal tax payable to zero, then the leftover can be used by Quebec.

Good Luck

woandlion

Hi BL.TAX,

Sorry, I cannot understand. Could you explain that further? Thanks.

BL.TAX

Roughly, take Fed. tax payable (before foreign tax credit) less Quebec rabate on your T1  plus Quebec tax payable on your TP1 (Be aware-- your tax paid is not your balance owing)

To find the foreign credit is not a big problem. The problem is to find how much foreign credit you are allowed in your US retrun if you do it manually because you are filing jointly.

woandlion

Thank you, BL.TAX.

For the first question, the problem is my income, which is all from Canada. How can I get those credits from Canada and Quebec in order to file my tax form in US?

Thanks again.

BL.TAX

1.Your wife can claim the US tax she paid as foreing credit with her Canada return, but she may not bring any tax she paid in Canada to US and claiming them as foreing tax credit as her income is US source. so, Q1 is not a question.

2. Probalbly not in your case. You choose resident for both countries, and I can't see any benefit from the treaty. Hope others can.

Post by woandlion
Thank BL.TAX for your comments. And thank Boooooooks for many helps.

I found making first-year choice and filing as a resident would be benefitful to me. 如果按resident 报税，仍然不能claim standard deduction because of my dual-status。但是we can claim child tax crdit, which will reduce $1000 directly from our tax.
在加拿大这边，因为有许多tuition credit，目前在联邦没有太多的balance owing，但是在quebec，必须交不少drug insurance。

所以现在我打算先在加拿大报税， 在美国先申请延期，然后make first-year choice, 等加拿大的foreign tax credit , 再按resident 报税。最后拿到美国的foreign tax credit 回加拿大做调整。最麻烦的报法！

有两个问题想请教：

1. 关于在加拿大的收入，如何从加拿大联邦和魁省得到foreign tax credit (用来在美国报税)？

2. 关于Canda-US treaty: may I get any benefit from Canda-US treaty?

Thanks.

woandlion

Hi lore,

Are you in Montreal now? I will come back to Montreal on Monday. Pls tell me your phone number to deng_shca@yahoo.ca. I will try to call you.

lore

;);););););)

hi guys, it's been my headache in terms of the two countries tax returns. I dont know how to file the tax properly. someone told me filing US tax return first the get the foreign tax credit filled into the CA forms. it's exact the reverse way as you said above.

I will appreciate it if you would like to share info with me in respect of the US incoming tax return thing here in Quebec.

send message to me at ccievoice.han @ gmail.com.

merci !

Stpaul

mark

woandlion

Thank BL.TAX for your comments. And thank Boooooooks for many helps.

I found making first-year choice and filing as a resident would be benefitful to me. 如果按resident 报税，仍然不能claim standard deduction because of my dual-status。但是we can claim child tax crdit, which will reduce $1000 directly from our tax.
在加拿大这边，因为有许多tuition credit，目前在联邦没有太多的balance owing，但是在quebec，必须交不少drug insurance。

所以现在我打算先在加拿大报税， 在美国先申请延期，然后make first-year choice, 等加拿大的foreign tax credit , 再按resident 报税。最后拿到美国的foreign tax credit 回加拿大做调整。最麻烦的报法！

有两个问题想请教：

1. 关于在加拿大的收入，如何从加拿大联邦和魁省得到foreign tax credit (用来在美国报税)？

2. 关于Canda-US treaty:  may I get any benefit from Canda-US treaty?

Thanks.

BL.TAX

The topic interests me too, so I would like to add some.

The advantages to file US return as non-resident are that you report only the income you earned in US, i.e. you don't have to report your world-wide income as you will do in Canada.

But in your case, I guess the income your wife has is only US source, salary, meaning that her US income is simply her world-wide income. If it is the case, reporting as a resident might be benefitful to you because non-resident can't claim standard deduction but only itemized deduction. The fact is that I don't think your wife will have more itemized deductions than standard, such as: mortgage interest, medical expenses, local taxes, donations etc. From this point of view, resedent is nice, but don't jump to the conclusion too quick for the following reasons.

First, to be the resident, as boooooooks said, there is a lot works to do.

Second, you may not get too much benefit by paying less tax in US. The reason is that usually Canada has higher tax rate than US does. because your wife will file Canadain return anyhow, if she pay more in US, but will pay less in Canada due to the foreign credit. let's put it in a simple way, US tax will have little effect on your total tax, which will be canadian tax ( but as you said, you have too many tuition credit, it may change the case. as tuition credit can not be deferred ferderally, the foreign credit may be wasted out ferderally and you can't carry over foreign credit to the future in Candad ( but you can use it in Quebec if you need it)


Alll in all, it seems complicated, you have to do more home work.

Good luck!!