Yes, you can report claim the foreign tax paid because of the US and Canadian tax treaty. Go to:
- Federal>deductions and credits>deductions and credits>estimate and other taxes paid>Foreign Tax Credit>start or revisit
- When it asks We just need to check if you have any uncommon situations indicate I paid foreign taxes on income I earned while working in another country. Even though technically you didn't, you will to indicate this so the program can move forward.
- Navigate and record the entries that the program asks for and when you reach the page that mentions Foreign Tax Credit Worksheet, this is where you take notice.
- The first that you will be asked is what category of income is it, you will say passive income.
- Next screen will say Country Summary, select add a country and then select Canada.
- When it says Other Gross Income - Canada, don't put anything here since you already reported this on your K1.
- then you will navigate through the screens until you come to a screen that says Foreign Taxes Paid - Canada, here is where you record the amount paid under Foreign Taxes on Other Income. Then below that you will enter the amount of taxes paid.
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