QUOTE(ceriserose @ Feb 19 2007, 10:15 AM)

QUOTE(flames9 @ Feb 14 2007, 04:39 AM)

You can still file Cdn taxes. My exit taxes were 2004(december). I received EI from Feb to Oct. 2005 My only income for the most part was the EI (and a bit of severence pay carried over from 2004) You may not get much back for 2 months, bu tprobably enough for a good night out!! I think my refund check was over $2000 cdn. And there is a income tax progrom (probably a few) that allows you to file for FREE if u make under a certain amount, and it recognizes non-residents in its software. Think it was quick tax??
I'm really confused now.
Why would I be filing Canadian taxes and reporting world income on that? Won't I be taxed by them just as I'm being taxed by the US?
Don't I recoup the 25% nonresident tax on my US taxes somehow?
I'll check out Serbinski but this makes no sense to me on the face of it...tell me where I might have it wrong.
Cerise...
As a non-resident, the Canadian Tax Code states the amount of taxes that you owe them can be determined in one of two ways:
The first way is to just have then take the 25% non-resident tax on Canadian source income and ignore your worldwide income otherwise which I believe is Section 216..
The Second way is to opt to get taxed on your worldwide income based on filing a return as if you were a Canadian resident via Section 217.
Basically, if the amount of tax based on your worldwide income is less that the amount that they took on your Canada source income, you can apply to get the portion of the 25% non-resident tax back. In essence, you have to be under the 25% tax bracket to make it work. Or you really need no or very little US income.
Or in another way.. if your worldwide income causes you to owe more than 25% tax, all you owe Canada is the 25%. If your worldwide income causes you to owe less than 25%, you get a refund between the amount you owe and the amount they collected.
Even if the International Tax Office told you you wouldn't qualify, I would probably do the Section 217 anyways to make sure. You never know until you do the numbers. Remember, your spouses income DOES NOT come into play here...
Rememebr that you have to report ANY Canada source income on your US 1040, but you can take a credit of those taxes by filing for a foreign tax credit. The US/Canada tax treaty does not allow for ANY double taxation.