Nathan Somasundaram (anonymous)

Hi Allan:
I have a client for whom I want to file a T1 return. Here’s the background information of the client:

1. The client and his family moved from the US on Sept 4, 2018.
2. The client and his wife have had income in the US and they both have W-2s.
3. The client and his wife also have T4s issued by their employers in Canada.

Here are my questions:

1. I’ve included the US employment income on line 104 and deducted it fully on line 256. Is this correct? (Because Canada has tax treaty with the US).

2. Do I have to file a T2209, and T2036? My understanding is T2209 (Federal Foreign Tax Credit) & T2036 (provincial foreign tax credit) need to be filed only where non-business income is from a country with which Canada has no tax treaty. Am I correct?

3. If on the other hand, I’m to report foreign income and taxes from the US (i.e. on T2209 and T2036), then which taxes do I consider on these forms, just the federal and state taxes or even Social Security tax, and medicare tax, too?

4. The tax payer became a resident in Canada only on Sep 4, 2018. The income he derived from the US was earned entirely prior to him becoming a resident in Canada? Also, it doesn’t seem fair to report this in the Canadian return because he was only part of year resident in Canada (He will be filing a 1040 or 1040NR to the IRS).