Jump to content
Français
Markbo

Foreign tax credits not calculated correctly by Ufile online?

Recommended Posts

Ufile online does not seem to calculate the foreign federal and provincial tax credits correctly. 

 

The foreign income diagnostics do not show any deductions, so the gross figure is just restated.

 

On form T2099, instead of the Net foreign non-business income, on line 433 the gross amount is used (line 431 is apparently ignored).

 

On form T2036, where the Net foreign non-business income is requested, the program uses the gross figure. This is then carried over to the the line for the provincial or territorial foreign tax credit of Form 428.

 

All of these amounts are then carried over to Schedule 1 and the T1 forms.

 

Is that correct? Is the Net foreign non-business income the income before foreign taxes are deducted?

 

The result would be a much higher federal and provincial foreign tax credit, i.e. $250 more in my case than Turbotax online has calculated.

Share this post


Link to post
Share on other sites

Normally the net foreign non-business income is not net of taxes it's net of other amounts.

 

Here is the explanation as per the form T2209:
 
 
Net foreign non-business income
(see note below)
Net amount you calculate when the non-business income you
earned in a foreign country is more than the non-business
losses you incurred in that country. When you calculate the non-
business income and losses, claim the allowable expenses and
deductions relating to the foreign income or loss. Subtract the
following from your foreign non-business income:
any income from that foreign country for which you claimed
a capital gains deduction;
any income that was, under a tax treaty between Canada
and that country, deductible as exempt from tax in Canada
or in that country;
any employment income from that country for which you
claimed an overseas employment tax credit;
any foreign resource and exploration and development
deductions; and
any deduction claimed under subsections 20(11) or 20(12)
and under subsection 4(3) relating to the foreign income,
including any deduction claimed for:
foreign union dues; contributions to a foreign pension plan or a social security
arrangement; and foreign carrying charges.
Do not reduce your foreign non-business income by any
deduction you claimed for a dividend you received from a
controlled foreign affiliate. If your net foreign non-business
income is more than your net income, use your net income in
the calculation.
 
For more information on deductions claimed under
subsections 20(11) and 20(12) of the Act, see Interpretation
Bulletin IT-506, Foreign Income Taxes as a Deduction from Income.
 
Note
Only include your foreign non-business income for
the part of the year you were a resident of Canada.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

© 2013 ImpôtExpert, Thomson Reuters. Tous droits réservés. Politique de confidentialité
×
×
  • Create New...