Does a Canadian spouse have to pay taxes on American spouse's income?

[alizon 77]

My husband and I just got our CR-1 approved today (yay!), but we've also gotten some disturbing news from an accountant friend: she claims that my husband has to report my American income on his Canadian taxes and that he will either 1. be taxed on my income or 2. receive a decreased return. This seems absurd to me given that I paid taxes on my income in the US, and the US-Canada tax treaty is meant to prevent double taxation. None of my income was earned in Canada, none of his income was earned in the US, and we have been residents of our respective countries all year. This won't be his exit return as he won't leave Canada until April 2012. Anyone know if this is true, that he will pay taxes on my income, or if he can enter "0" as my income since none of it was earned in Canada and I am not a resident of Canada?

EDIT: I did do a search for this issue through VJ and Google, and I haven't been able to find anything identical to it.

Edited March 13, 2012 by alizon

[Neela & Jitu 79]

My husband and I just got our CR-1 approved today (yay!), but we've also gotten some disturbing news from an accountant friend: she claims that my husband has to report my American income on his Canadian taxes and that he will either 1. be taxed on my income or 2. receive a decreased return. This seems absurd to me given that I paid taxes on my income in the US, and the US-Canada tax treaty is meant to prevent double taxation. None of my income was earned in Canada, none of his income was earned in the US, and we have been residents of our respective countries all year. This won't be his exit return as he won't leave Canada until April 2012. Anyone know if this is true, that he will pay taxes on my income, or if he can enter "0" as my income since none of it was earned in Canada and I am not a resident of Canada?

EDIT: I did do a search for this issue through VJ and Google, and I haven't been able to find anything identical to it.

Congrats! may be Saylin can help u with it.pm Saylin.

[Neela & Jitu 79]

Let me know what she says coz i will face the same prob as urs.

Thanks

[sheeshkabelle 153]

My husband files married filing separately. He does list me as a spouse and where the SIN goes he writes US citizen. He's never had an issue, and he's never claimed my US income.

A US citizen HAS to file income tax on foreign income they earned during the tax year no matter where in the world it was earned. Even if they no longer reside in the US.

Edited March 14, 2012 by sheeshkabelle

[SF2007 48]

I want to know the answer to that one too! It was my understanding that income earned in Canada to a Canadian employer paid taxes in Canada, same goes for the U.S.

If it's anything like foreign bank accounts, you have to declare them to the IRS if over a certain amount (10k total), but you are not taxed on them.

[neiks 19]

No, that doesn't sound right. I file Canadian taxes every year. Married but file separately, do not file jointly. I do not get taxed on my husbands US income. We do have to put in his net income but it is only for determination of household income for GST/ child tax benefit eligibility

[MissDinaDee 8]

I called the CRA regarding this issue as when I used tax software to complete my return for 2011 it greatly decreased my tax return (by $2k) due to my husbands income.

CRA said that my husbands US income will not and should not reflect on my taxes and suggested seeing a tax preparer or doing them by hand to ensure that this does not happen.

Good luck!

MrsJ

[alizon 77]

Thanks for the responses, all. My husband tried to call CRA this morning, but they weren't answering their phones. The person he spoke to at the Quebec tax agency said that it would likely reduce his refund somewhat because I'm included in his familial income, but that it should not be reduced as much as the online preparation service was showing. We're going to try to make a few more calls and will probably do his taxes by hand rather than electronically. It sucks that my income is included in his household when we literally don't yet share the same house! Getting taxed as if we share one home, and in reality having to pay for two.

[S and P 9]

Any more info on this thread??

If my husband (canadian citizen) files married filing separately.... does he still need to list my income (USC) anywhere on his forms?? This is so confusing!!

[Residentangel 1]

I filed last month.

They ask if spouse is Canada resident/citizen or non resident. You will need to enter their income as it is used to determine whether you're eligible for the GST credit or not. It does not affect your taxes at all.

[S and P 9]

I filed last month.

They ask if spouse is Canada resident/citizen or non resident. You will need to enter their income as it is used to determine whether you're eligible for the GST credit or not. It does not affect your taxes at all.

Thank you!