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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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Complicated tax question.I work as visual effects artist

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Complicated tax question.
I work as visual effects artist in Los Angeles. I'm a permanent resident of California.
Due to subsidy a lot of jobs have vanished to Vancouver, bc.

In 2012 I have spent 10 months working in Vancouver, bc on a work permit. I never became a resident. I never owned a residence. I did not sign a lease. I lived with friends. I did create a rbc bank checking a account for the payroll direct deposit.
I have spend more than 183 days in bc but not more than 330. I had no intention to stay and have returned to Los Angeles now.

Turbo tax Canada tax experts think I'm a deemed-non-resident. I don't quite understand the difference between deemed resident, deemed non-resident, non-resident in terms of tax rate it seemed to be the same. Then there is his subsection 217 that looks like it could save me some tax.

My payroll was normal income ax withheld. As well as CPP and EI payments that I'd like to get back. My world income includes 38.000$ from California wages. Plus about 100.000$ of wages from Vancouver, bc.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.
Hello and thank you for using Just Answer,
As a nonresident of Canada, you will be allowed to use the foreign tax credit on your US return per the tax treaty between US and Canada. Because you were there more then 183 days you are still liable fo rthe tax in Canada but when you file your US return, you will be allowed the Foreign Tax Credit and you will not be Double Taxed on your Income.
Had you not been in Canada for more than 183 days you could have exclude up to $15000 of your income from Canada taxation. Of course you would not be allowed a US tax credit when you exclude the same income.
One of the main differences in resident and deemednonresident are the areas of tax relief available to you and what income is taxable to Canada. If you are a resident, Canada would tax you on all your income earned anywhere. You may say all you had was wages but if you had income from some other country and you were a Canadian resident, you would be taxed on that income too. Plus, tax treaties look to residency for tax relief form double taxation.



Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7526
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 5 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
I expected more indepth information.
What type of resident do you think I am? Is section 217 useful for me?

The question for the Canadian tax return: my us income gets a tax credit for all taxes withheld already. That's fine. How much of my withheld Canadian tax can I get back?

The question for the us tax return: I tried the foreign income exclusion. I don't pass neither the bona fide nor physical presence resident test. I seem not slight able to exclude my Canadian income. I'm able to get a tax credit or tax deduction of taxes paid on the Canadian income though.

I was under the impression the tax treaty basically says: us income is to be non taxed by Canada and Canadian income is to be non taxed in the us. Is that correct? Is that the same as a tax credit of taxes already withheld?
Expert:  Robin D. replied 1 year ago.
You are correct, you do not qualify to exclud eyour income using the US form 2555 becaus eyou were not outside the US fo rthe needed time. Yes, you are allowed the Foreign tax credit for your US liability.
You are not correct about your understanding on how Canada and the US taxation works. A citizen of teh US is taxed on worldwide income and that includes income from a Canadian source. Your US source income would not be taxed to Canada because you are a nonresident. The tax credit afforded by the US is your relief from Double Taxation.

The section 217 election applies to the following types of Canadian-source income:

  • old age security pension ;
  • Canada Pension Plan and Quebec Pension Plan benefits;
  • most superannuation and pension benefits;
  • most registered retirement savings plan payments;
  • most registered retirement income fund payments;
  • death benefits;
  • employment insurance benefits;
  • certain retiring allowances;
  • registered supplementary unemployment benefit plan payments;
  • most deferred profit-sharing plan payments;
  • amounts received from a retirement compensation arrangement, or the purchase price of an interest in a retirement compensation arrangement;
  • prescribed benefits under a government assistance program; and
  • Auto Pact benefits.

If you recieved any of the above then you should file under 217. I did not see where you were paid anything but wages.

 

Finally, I believe you could be deemed a nonresident for Canadian tax purposes.

Customer: replied 1 year ago.
Also what about CPP and EI payments? Can I get those back?
Expert:  Robin D. replied 1 year ago.
The CPP is considered part o f the overall Canadian tax for withholding. The EI is employment insurance. If the employer had overdeducted your amount then the employer would have been allowed to refund to you the amount over deducted. Neither is likely to be refunded.
Your CPP would be allowed for payment at retirement, unfortunately.
Customer: replied 1 year ago.
Relist: Answer quality.
None of my numbers were addressed

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