[michesim]

US citizen and resident employed in Quebec all of 2007. Commuted weekly.

Where do I find tax froms to report employment ervenues to Quebec.
Profile insists on completing Canada return only and no option to reprot to Quebec.

Do I even need to report to Quebec in such circumstances.

Thank you.

[Tim Parris]

Have you not done this type of return before... it is a normal return for the border region of Ontario/Quebec and New Brunswick/Quebec. And have you thought about the requirement to file a US return yet?

[Tim Parris]

I just checked your profile and realized that you are on the West Coast, not East. Now I understand why you have a problem.

First, the right to tax the employment income in Quebec is held by the province of residence where the person lives. If they do not live in Quebec, there is no Quebec return and you follow the instructions at http://www.cra-arc.g...ml#P1576_212117

However, note that Profile may be sold with or without Quebec returns. Which version are you using? If you are using the version without Quebec, you may likely be unable to produce a Quebec return even if it is necessary.

Given that you are West Coast and unlikely to have many Quebec returns, I would recommend that you refer this return to someone who has the experience in Quebec.


As another note, do not forget the US return must be addressed. You seem to have a high incidence of foreign issues in your practice... Why?

[smudgeid]

What were you looking at, Tim? I don't see West coast - and the OP says they are a US resident & citizen.

I think they probably need an accountant experienced in cross border income taxes - I thought they paid in the States first since they live there & then may have to pay an amount in Canada. Sounds as if it is time for a professional.
Kate

[Tim Parris]

Michesim has a BC Timezone. So unlikely to do Quebec returns that frequently. Given that, I cut him/her some slack which I would not have done for a tax preparer located on the border of Quebec.

As for paying the States first, no, you've reversed things. You are mixing residency with effectively connected income. All countries reserve the right to tax effectively connected income first. Canada also reserves the right to tax its residents (full or part time) on their world-wide income. The US reserves the right to tax its citizens and its residents (full or part time) on their world-wide income. Those final parts are secondary to the effectively connected tax.

I do cross-border returns. The Treaty says that each contracting state (country) has the right to tax the effectively connected income first and the other contracting state will give credit for the taxes paid on that income, to the extent that it taxes the same income. So, the Quebec employment income was earned in Canada and is considered effectively connected to Canada, not the US. A Foreign Tax Credit is prepared using 1116 for the US Federal, plus any other state equivalent if the state recognizes the Treaty. (If Canada was the second to tax, you'd use T2209 and the provincial equivalents T2036 or TP772.)

[smudgeid]

You are mixing residency with effectively connected income. All countries reserve the right to tax effectively connected income first.

Gotcha. Thanks.
Kate

[D.F. (Nick) Lapenna]

Tim Parris, on May 12 2008, 07:15 PM, said:

Michesim has a BC Timezone. So unlikely to do Quebec returns that frequently. Given that, I cut him/her some slack which I would not have done for a tax preparer located on the border of Quebec.

As for paying the States first, no, you've reversed things. You are mixing residency with effectively connected income. All countries reserve the right to tax effectively connected income first. Canada also reserves the right to tax its residents (full or part time) on their world-wide income. The US reserves the right to tax its citizens and its residents (full or part time) on their world-wide income. Those final parts are secondary to the effectively connected tax.

I do cross-border returns. The Treaty says that each contracting state (country) has the right to tax the effectively connected income first and the other contracting state will give credit for the taxes paid on that income, to the extent that it taxes the same income. So, the Quebec employment income was earned in Canada and is considered effectively connected to Canada, not the US. A Foreign Tax Credit is prepared using 1116 for the US Federal, plus any other state equivalent if the state recognizes the Treaty. (If Canada was the second to tax, you'd use T2209 and the provincial equivalents T2036 or TP772.)

I have not been called upon by my clients to "do" this type of tax preparation work.

Your complete explanation was much appreciated and well received by me as an interested observer from the sidelines.

Ciao!