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Form 1042-S Forien Person's US Source Income


john_gml
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Hello,

 

My wife is working in Canada for a US company.

She received a Form called 1042-S "Foreign Person's U.S. Source Income Subject to Withholding".

 

Does she need to claim this? If yes, can someone kindly advise where to input it.

I tried to search in help file, but no clue on how to do it.

 

Thanks,

John

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Is your wife a Canadian resident? If you are not sure, please contact CRA to find out the status of your spouse.

 

If she is a Canadian resident and she has received US source pension income, please follow the intruction below.

 

Your foreign pension may qualify for a tax deduction under the terms of a treaty signed between Canada and the originating country.

If you do not know whether any part of your foreign pension is tax exempt, contact the CRA.

 

To enter the amount of your foreign pension income, follow the steps below:

 

1. In the "QuikClik Navigator" located on the left-hand side of the screen, click on "Interview setup".

2. On the page that appears on the right, check the box "Foreign income and foreign property (T1135)" and click on "Next" at the bottom of the page.

3- Return to the "QuikClik Navigator" and select "Foreign income and property".

4- On the screen to your right, click on "Foreign pension income (includes U.S social security benefits)".

5- On the new page generated, you must enter the "Country from where you received the foreign income", a brief "Description of the source of the foreign income" as well as the "Exchange rate to apply".

6- For the line "Type of foreign pension income", choose the income that corresponds to your situation from the drop-down menu on your right.

7- For the line "Amount of foreign income received", enter the amount you received.

If part or the entire pension is exempt from tax under an agreement or a tax agreement concluded between that country and Quebec or Canada, you can claim a deduction for income not taxable under a tax treaty. The International Tax Services Office of the Canada Revenue Agency can inform you about these tax treaties and arrangements.

8- Once this information is obtained, for the line "Income exempt under a tax treaty (leave blank for US social security benefits)", enter the amount.

This amount will be reported on line 256 of the federal return and line 297 of the Quebec return. The code 12 will be entered on Quebec line 296.

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