Question

Foreign Tax Credit for California.

Forum|Forum|6 years ago
March 6, 2020
1 reply
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Does premier live support CPA TurboTax handles foreign tax credit on California tax return?

Tax-treaty Canada? purchase of a home in Canada? rental income? bank accounts?

How does this work with regards to this? some say that california doesnt have treaty with canada and will result in double taxation.

TurboTax Premier Online

K

KarenJ2

Yes, Premier live support will handle the issues you detailed.

California does not recognize the federal foreign earned income exclusion or foreign tax credits that the IRS allows for the federal return.

However, if you've resided outside the US long enough, and can thus qualify for the California "safe harbor" provisions for being a nonresident of California In this instance, your foreign income would be excluded from California income taxes, by default.

You can read more about this "safe harbor" exception on Page 4 of the following California Franchise Tax Board website:

California Guidelines for Determining Resident Status

TurboTax does not yet support tax treaties, however their are workarounds.

If you have Canadian income you can use foreign tax credit to help offset your federal tax.

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