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Hi Allan,
My question is about the child tax credit claimed on a US return and how that affects the Canadian return. If my total tax was say $10,000 on my US tax return, but I received a $4,000 child tax credit to offset that, would my foreign taxes claimed on the Canadian return be $6,000 or $10,000? (This of course doesn't include the medicare and SS tax paid in the US.)
I had my taxes previously done by a reputable cross border accountant and they informed me that "You have to include your US sourced income in your Canadian tax return as you are considered a resident of Canada, however you get a credit for the amount of tax paid on your US tax return related to that specific income. Doesn’t matter if you received a child tax credit, you still paid tax on that income and you get a credit for that in Canada."
The CRA is now saying that is incorrect.
Thank you for your response.
Great question. I have taken the net US tax liability (after tax credits) and claimed the net amount as a foreign tax credit. In your case, this is $6,000. I am not saying that your accountant is wrong, but this is the approach that I have followed.