I am a Canadian PR and a U.S.C. that started a full-time employment for a U.S. employer that started in 2021, I had a Canadian employer before that. The U.S. employer ran my payroll with my U.S. address and withheld U.S. taxes at source as it would for regular U.S. employees. I however worked remotely from Canada during 2021 for the U.S. employer due to COVID, travel restrictions etc.
1. I am getting ready for the taxes and noticed that CRA has extended relief for folks who worked for U.S. employer remotely from Canada for 2021 tax year also (Section VII, part C, item ii, "Canadian Resident Employees" of the CRA guidance available at https://www.canada.ca/en/revenue-agency ... ssues.html). And as such, can I just file the U.S. taxes regularly (U.S. employer withheld all applicable taxes at source), and then file with CRA and claim foreign tax credit for amount paid to IRS under the exemption they are offering?
2. The section VII, part C, item ii, "Canadian Resident Employees" of the CRA guidance and Section III.C both use language "keep filing as in previous years" etc. since my U.S. employment started in 2021, am I still eligible for this relief, correct?
3. Section III.C (and section III.C when referred in section VII, part C, item ii) talk about "letter of authority". After reading the entire guidance, my understanding is that this relief is also applicable to folks who never obtained any letter of authority in the past to ask their U.S. employer to reduce U.S. source deductions. As such, this relief applies to people like me with new U.S. employment started in 2021, who never had any such "letter of authority". Is my understanding correct or this relief as discussed in section VII, part C, item ii ****DOES NOT**** ONLY APPLY TO FOLKS WITH "LETTER OF AUTHORITY" AND PROVIDED IT TO THEIR U.S. EMPLOYER?
4. Since I am a Canadian PR, I want to make sure my "filing status" with CRA reflects that I was a Canadian resident. As such, I plan to file my U.S. taxes with my U.S. address that the U.S. employer has on record, and my Canadian taxes with my Canadian address and as a Canadian resident. My understanding is that CRA only cares that I actually did pay the IRS the tax amount I am claiming the tax credit for and do not care about the address I use on my 1040 (U.S. or Canadian). Are there any issues with this plan?
5. What I need to do exactly during CRA filing to claim this exemption of foreign tax credit payed at source to IRS even though worked remotely from Canada? Is it like an option on the online tool to check?
6. Since I am a U.S. citizen, I am guessing I just have to file U.S. taxes as a resident via 1040? U.S. doesn't seem to have presence requirement for resident status for U.S. citizens for tax filing purposes. Correct?
Thank you!!!!
Asking @jclarke99 @deibler @harirajmohan @canuck78 to answer.
1. I am getting ready for the taxes and noticed that CRA has extended relief for folks who worked for U.S. employer remotely from Canada for 2021 tax year also (Section VII, part C, item ii, "Canadian Resident Employees" of the CRA guidance available at https://www.canada.ca/en/revenue-agency ... ssues.html). And as such, can I just file the U.S. taxes regularly (U.S. employer withheld all applicable taxes at source), and then file with CRA and claim foreign tax credit for amount paid to IRS under the exemption they are offering?
2. The section VII, part C, item ii, "Canadian Resident Employees" of the CRA guidance and Section III.C both use language "keep filing as in previous years" etc. since my U.S. employment started in 2021, am I still eligible for this relief, correct?
3. Section III.C (and section III.C when referred in section VII, part C, item ii) talk about "letter of authority". After reading the entire guidance, my understanding is that this relief is also applicable to folks who never obtained any letter of authority in the past to ask their U.S. employer to reduce U.S. source deductions. As such, this relief applies to people like me with new U.S. employment started in 2021, who never had any such "letter of authority". Is my understanding correct or this relief as discussed in section VII, part C, item ii ****DOES NOT**** ONLY APPLY TO FOLKS WITH "LETTER OF AUTHORITY" AND PROVIDED IT TO THEIR U.S. EMPLOYER?
4. Since I am a Canadian PR, I want to make sure my "filing status" with CRA reflects that I was a Canadian resident. As such, I plan to file my U.S. taxes with my U.S. address that the U.S. employer has on record, and my Canadian taxes with my Canadian address and as a Canadian resident. My understanding is that CRA only cares that I actually did pay the IRS the tax amount I am claiming the tax credit for and do not care about the address I use on my 1040 (U.S. or Canadian). Are there any issues with this plan?
5. What I need to do exactly during CRA filing to claim this exemption of foreign tax credit payed at source to IRS even though worked remotely from Canada? Is it like an option on the online tool to check?
6. Since I am a U.S. citizen, I am guessing I just have to file U.S. taxes as a resident via 1040? U.S. doesn't seem to have presence requirement for resident status for U.S. citizens for tax filing purposes. Correct?
Thank you!!!!
Asking @jclarke99 @deibler @harirajmohan @canuck78 to answer.