Where/How do I report EI and Taxes from EI in the US?

[chiggins82 88]

Hi,

I have searched here and Serbinsky and and I keep getting confused on this one. I am working on my taxes for the first time. Canada was pretty easy and for the most part US ones have been too with the exception of EI.

I am using Turbo Tax and I am not sure where EI and the tax from EI goes. Can anyone help me with this or tell me what IRS form I should be using for each of these?

Right now I have the income from EI in Federal > Wages and Income > Other Reportable Income> Other Taxable Income

and then I have the EI taxes in Federal > Deductions > Estimates and Other Taxes > Foreign Taxes

Is that what others are doing? Sound right to those that have done this before?

Thanks for your help

[chiggins82 88]

Since no one answered, I called Turbo Tax last night. In case others see this, this is what they advised:

EI is not considered an earned income, so you cannot claim it with work income. It has to be entered in the other foreign earnings section. The tax from EI is not considered as something you can get a credit for, so you do not need to enter it anywhere. He said it seemed like a weird loophole in the double taxation clauses in the Canadian-US tax treaty.

[thatangela 134]

Thanks, chiggins. That's one of the questions I came here looking for an answer for. Stay tuned on Twitter; I'm sure you'll hear me screaming.

[dee&vee 79]

Since no one answered, I called Turbo Tax last night. In case others see this, this is what they advised:

EI is not considered an earned income, so you cannot claim it with work income. It has to be entered in the other foreign earnings section. The tax from EI is not considered as something you can get a credit for, so you do not need to enter it anywhere. He said it seemed like a weird loophole in the double taxation clauses in the Canadian-US tax treaty.

That is NOT correct at all. You certainly can get tax credit for all the tax paid on your EI income using form 1116. Read through this thread below, especially the last reply which is my comment there. I left two really good links there regarding this in my last comment.

http://www.visajourney.com/forums/topic/590211-at-wits-end-with-taxes/

Some people recommend claiming EI income as unemployment income, and some recommend as other income. There doesnt seem to be agreed upon opinion on that. But EVERYONE on this site and Serbinski accounting forum agrees that you can claim all your EI income tax as tax credit using form 1116.

Edit:- http://www.visajourney.com/forums/topic/590211-at-wits-end-with-taxes/?p=8080758

Refer to above link for two good sources for proof that you can claim EI income tax on tax credit form 1116.

Edited April 9, 2016 by dee&vee

[chiggins82 88]

Yes I saw these posts... and found them confusing. Not your particular post, but more that there were a number of posts and they don't all say the same thing. I didn't know if you were right vs others, so I called the IRS.. They would not answer the question, so I called Turbo Tax who gave me that info above. They came to their conclusion by reading the Canada-US tax treaty and that it states Unemployment is not considered earned wages. They also told me I could try using 1116, but technically I should not based on how the treaty was written and that in the end, it may not be caught by IRS anyways. If it was, they would likely just adjust it.

Whether Turbo Tax is right, or you are right, I don't know.

What I do know is that for me after seeing this and getting the info from Turbo tax I learned that entering my EI taxes on 1116 did not do anything to my return. So in the end it doesn't seem matter for me anyways.