Filing Taxes in Canada from US

[Brenda2010 1]

Hi all - apologies if the answer exists in the EI thread but I couldn't find it.

Background:

- I poe'd Dec. 27th, 2011, got my Green Card in May 2011, and have been collecting EI from Canada ever since (payments stopped Dec. 31 2011).

- last year/April 2011 I filed my Canadian tax return, an exit return (in anticipation of becoming a US resident)

Question:

- I think, as I received $$ from a Cdn source/EI that I should file a 2011 Cdn tax return, but my Cdn acct is telling me that as a US resident I don't ...is that true?

- fyi: I intend to claim the income (and tax collected) on my US return

Appreciate your input when you have a moment, thanks, Brenda

[Udella&Wiz 325]

EI takes off the standard amoutn of income tax so I think that now, you don;t have to file Cdn return, but double check that by either calling CRA or asking in this tax forum http://forums.serbinski.com/

As you've noted you will have to declare it on the US tax return. Since there is a tax treaty between the two countries you shouldn't theoretically have to pay taxes twice. I think you will have to pay US tax and then you have to try and get the tax back from Canada though by filing a Section 217 (before the end of June I think)

This is what I had to do in order to not be taxed twice...on the advice of the tax forum gods....I screwed myself by not understanding the time limit on the section 217 so I infact was taxed twice and never did get anything back from Canada

[SunnySanDiego 17]

EI is considered taxable income that is why it's taxed and must be reported as such. To not report is fraud and EI also reports the income to CRA so CRA will know that you had that income. So you would file with Canada for the year you received the EI as it is a Canadian benefit and the taxes taken by EI went to CRA. On a side note EI does not usually take enough taxes and in most cases you end up owing taxes if that was your only income. I worked for EI for a few years. If you are unsure just call EI.

Edited February 4, 2012 by SunnySanDiego

[Udella&Wiz 325]

EI is considered taxable income that is why it's taxed and must be reported as such. To not report is fraud and EI also reports the income to CRA so CRA will know that you had that income. So you would file with Canada for the year you received the EI as it is a Canadian benefit and the taxes taken by EI went to CRA. On a side note EI does not usually take enough taxes and in most cases you end up owing taxes if that was your only income. I worked for EI for a few years. If you are unsure just call EI.

Do they not take 25%? They certainly did on mine In hind sight my exit return was the one which contained the EI so perhaps my situation was different. I didn;t jave to pay any extra tax that year in Canada and I both the EI and US income but I don;t recall that I had to report my US income on my Cdn return.

Edited February 4, 2012 by Udella&Wiz

[Brenda2010 1]

Thanks both for your input. Yup, they did take the 25% up front.

I did have a sneaky suspicion that even though I'm a US resident now, and had filed a 2010 exit return in Canada I should file a Canadian return for 2011 for the EI. Will call just to do diligence but makes sense to me, surprised my CA would advise otherwise, will let him know!

[SunnySanDiego 17]

Do they not take 25%? They certainly did on mine In hind sight my exit return was the one which contained the EI so perhaps my situation was different. I didn;t jave to pay any extra tax that year in Canada and I both the EI and US income but I don;t recall that I had to report my US income on my Cdn return.

It depends on your family situation how much they take and if you have had other income over the course of the same year. They determine that based on how you answer some tax questions in your application that number can always be changed by calling also.

[Brenda2010 1]

So did some more digging and came across an article about electing to file Canadian Tax Return as a non-resident of Canada for tax purposes - requires filing of a '217' as you mentioned Udella&Wiz.

If you're interested have a read: http://www.cramagazine.com/issues/fall08/article04.htm