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May 18, 2024
Question

Canadian tax return

  • May 18, 2024
  • 1 reply
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Where do you enter the tax paid on canadian tax return on us tax return. how to do enter Social Security on us tax return if tax is already paid on canadian return

    1 reply

    May 19, 2024

    I assume you're talking about US Social Security taxed by Canada

     

     

    Canada and the United States have a tax treaty in place to prevent double taxation for Canadian residents earning U.S. income and U.S. citizens working and living in Canada. Here are some key points about the treaty:

    1. Residence and Citizenship: Regardless of your citizenship, if you live and work in Canada, you are required to pay Canadian income tax. The U.S., on the other hand, bases taxation on both your residence and citizenship status1.

    2. Relief from Double Taxation: The U.S.-Canada tax treaty ensures that income earned in one country by residents or citizens of the other is not taxed twice. Specifically, U.S. citizens and residents can credit the income tax they pay to Canada against their U.S. tax obligations2.

    3. Deemed Source Rule: Under this rule, if Canada is allowed, under the terms of the treaty, to tax an item of income, it is deemed to be Canadian source; otherwise, it is deemed to be U.S. source3.

    Since Canada is taxing this income, it would be considered foreign source income. you report the Social Security on your US tax return and then take the foreign tax credit for the taxes paid to Canada. you would use form 1116 and the category is general. 

     

    the issue for the US return is determining the income to report and the Canadian taxes paid  

     

     

    here's more info

    https://turbotax.intuit.ca/tips/reporting-american-social-security-income-in-canada-6220