ON tax question

[cc cc]

I have a quick question on ON tax...

I understand we can claim foreign tax credit on the Canada Federal tax return if we work in the US, get all income from the US, and pay US tax.

But seems to me we really cannot claim any foreign tax credit on Ontario tax return if all the US income or non-business income, e.g. salary.

Would somebody, (e.g. vault) who file Canadian tax before confirm on this?

Thanks a lot!

 

[vault]

Originally posted by cc cc
I have a quick question on ON tax...

I understand we can claim foreign tax credit on the Canada Federal tax return if we work in the US, get all income from the US, and pay US tax.

But seems to me we really cannot claim any foreign tax credit on Ontario tax return if all the US income or non-business income, e.g. salary.

Would somebody, (e.g. vault) who file Canadian tax before confirm on this?

Thanks a lot!

thats correct. You cannot claim foreign tax credit when you file for ON taxes. I have been adding the state (US) and Fed (US) and deducting it as foreign tax credit.

 

[cc cc]

Hi Vault,

Thanks a lot for your confirmation, although it is not a good new... ... since the Ontario tax is pretty high as well...

Anyway, you are saying that you use US Fed. tax and State tax as Foreign Tax Credit for Canada Federal Tax return. I believe you've got no problem in the past few year. But, I went through the Canada-US tax treaty breafly and found out the following paragraph,


(a) subject to the provisions of the law of Canada regarding the deduction from tax payable in Canada of tax paid in a territory outside Canada and to any subsequent modification of those provisions (which shall not affect the general principle hereof)

(i) income tax paid or accrued to the United States on profits, income or gains arising in the United States, and

(ii) in the case of an individual, any social security taxes paid to the United States (other than taxes relating to unemployment insurance benefits) by the individual on such profits, income or gains

shall be deducted from any Canadian tax payable in respect of such profits, income or gains;


So, seems the Social Security Taxes should also be detuctable from Canada tax. Don't know about the Medical Tax, though

 

[anonymous12]

taxes

I am new to this Canadian immigration stuff. I have a simple question,

If one is Canadian PR but working and paying taxes in usa (no sourse of income from Canada), then do you just have to file tax return in Canada or you have to pay taxes in Canada as well?

In theory you are supposed to pay taxes only to your source of income country.

any comments!

 

[vault]

Re: taxes

Originally posted by anonymous12
I am new to this Canadian immigration stuff. I have a simple question,

If one is Canadian PR but working and paying taxes in usa (no sourse of income from Canada), then do you just have to file tax return in Canada or you have to pay taxes in Canada as well?

In theory you are supposed to pay taxes only to your source of income country.

any comments!

If you are Canadian landed Immigrant, then you are taxed on world wide income. If you do not live in canada, then fill out NR74 to get an answer of your have to pay taxes. Keep in mind, if you do not pay taxes, it will haunt you in the long run.

 

[vault]

Originally posted by cc cc
Hi Vault,

Thanks a lot for your confirmation, although it is not a good new... ... since the Ontario tax is pretty high as well...

Anyway, you are saying that you use US Fed. tax and State tax as Foreign Tax Credit for Canada Federal Tax return. I believe you've got no problem in the past few year. But, I went through the Canada-US tax treaty breafly and found out the following paragraph,


(a) subject to the provisions of the law of Canada regarding the deduction from tax payable in Canada of tax paid in a territory outside Canada and to any subsequent modification of those provisions (which shall not affect the general principle hereof)

(i) income tax paid or accrued to the United States on profits, income or gains arising in the United States, and

(ii) in the case of an individual, any social security taxes paid to the United States (other than taxes relating to unemployment insurance benefits) by the individual on such profits, income or gains

shall be deducted from any Canadian tax payable in respect of such profits, income or gains;


So, seems the Social Security Taxes should also be detuctable from Canada tax. Don't know about the Medical Tax, though

Because of the tax treaty you are eligible to claim retirement benefits in the US and Canada. I think, if you deduct the SS taxes, then you will have to pay the Canadian Pension Taxes, which is much higher than SS. I guess I may have to consult a CGA to see what he/she thinks. Thanks fo rthe info

 

[cc cc]

Hi Vault,

Would you please post the answer you get from tax consultant when you get it? I don't have the access to any Canadian tax account right now and really would like to know the answer.

Thanks a lot.

 

[vault]

Most probably I might worry about it, since I don't have patience to ammend the returns. But If I talk to someone I will let you know.