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AltaRed

Foreign Tax Credit - MATERIAL Software Error

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A few sharp users of Ufile 2017 have found the software (UFile for Windows) has an error in Page 1 of T2209 diagnostics that could result in too much of a FTC being granted from US sourced income. 

Column C sometimes shows numbers that reflect Column A rather than calculating the allowable Can-US tax treaty rates of Note 2.   In other words, Column C data points cannot exceed the numbers of 10% or 15% as applicable in the tax treaty.   If too much withholding tax was actually withheld (Column B), then Column C data is supposed to restrict the amount of the data point of Column B that could be claimed as a credit against Canadian taxes in Column E.

Fortunately, in my case, foreign withholding taxes meet the tax treaty guidelines so that I am not overclaiming tax credits. This may not be the case For some taxpayers. Be aware! 

Added later:  Column C calculation seems to be the correct tax treaty number with inputs from T5 tax slips (e.g. foreign non-business income earned as dividends), but is incorrect with inputs from T3 tax slips (as foreign non-business income)

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