Canada tax info

[bobo 2]

[No.. you do not have to report your EI income that had the 25% non-resident taxes taken out of it on your Canadian tax forms... It does have to be reported on your US 1040 however...

This is your opinion or you have seen it written somewhere on CRA website?

As per the instructions on the T4E slip EI benefits have to be reported on the Canadian return, box 14 (Total benefits paid) on line 119 and box 24 (Non-resident tax deducted) on line 437.

So I would report the EI on the Canadian return.

[ceriserose 1]

[No.. you do not have to report your EI income that had the 25% non-resident taxes taken out of it on your Canadian tax forms... It does have to be reported on your US 1040 however...

This is your opinion or you have seen it written somewhere on CRA website?

As per the instructions on the T4E slip EI benefits have to be reported on the Canadian return, box 14 (Total benefits paid) on line 119 and box 24 (Non-resident tax deducted) on line 437.

So I would report the EI on the Canadian return.

According to the US/Canadian tax treaty, for tax purposes, unless you maintain a vacant residence in Canada that you could return to, or unless you have a spouse and minor children permanently residing in Canada while you are living in the US, you are a resident of one country or the other, but not both. Residence changes on the date one leaves Canada.

The 25% non-resident tax deducted is the only tax liability required to be paid (which is why they take it off the top). The EI, or any other foreign* monies received by a Canadian permanently residing in the US, is reportable as income to the IRS and the taxes collected by Canada (the 25% non-resident tax) is reported as a foreign tax credit on the US taxes.

There are many reasons why a Canadian would be collecting EI in a foreign country and not all of them have tax treaties with Canada. Depending on an individual's situation, those instructions you mention may be valid, and probably the majority of the time, the exact way to file. For a Canadian permanently residing in the US, it works as I've outlined above.

If one chooses to declare EI benefits on the Canadian taxes I believe it places the taxes into a "partial year 217" situation which can have other implications. My suggestion is to contact the International tax office to get specific answers using your own situation(s) so you know that the information you're getting is correct.

1-800-267-5177

(All my information was gleaned from numerous conversations with CRA at that number, using my own personal data. I'm satisfied that I understand it completely for myself and can explain it, but I am a stranger on a message board to y'all so your best bet is to research it for yourselves.)

*foreign in this case being of Canadian origin, as one would be living in the US at that time

Edited March 16, 2006 by ceriserose

[daisy16 0]

I called CRA yesterday. They reported that I DO NOT have to report the EI income or federal tax on my tax return.

Also, since I don't have any US income, and 90%+ of my income is from Canadian sources I don't have to prorate my exemptions. I was told to send in Schedules A and B for this.

[allycat 0]

Daisy - I'm glad you called and confirmed! Sure saves a ton of dough if you don't have to pro rate.