topic Are CPP and EI deductible? in Deductions & credits

I moved to Canada in May, do I have to input my Canadian T4 (income) and if so, how and where can I input this?

jamesrmacneill — Thu, 06 Jun 2019 00:50:18 GMT

If you are a US citizen or resident who earned Canadian i...

LinaJ2018 — Thu, 06 Jun 2019 00:50:19 GMT

If you are a US citizen or resident who earned Canadian income, you will need to enter the amount as foreign income. To do so in TurboTax Deluxe online program, go to:

1. After sign into your account, select Take me to my return

2. At the right upper corner, in the search box , type in foreign income and Enter

3. Select Jump to foreign income

4. Next screen, Did You Make Any Money Outside the United States? answer Yes

5. On screen, What Form(s) Was Foreign Income Reported On ?check the third box and continue to proceed

If you lived outside United States for at least 330 days during 12 consecutive months, you might be able to exclude your foreign income from your taxes. For more information, see Foreign income and exclusion and Extension. For tax year of 2016, the maximum foreign earned income exclusion amount is $101,300

If you pay taxes on the same amount of income to both US and Canada, you might be able to receive a foreign tax credit on Form 1116. To enter this information in the program, please follow these steps:

1. After sign into your account, select Take me to my return

2. At the right upper corner, in the search box , type in foreign tax credit and Enter

3. Select the 1st choice on the search results - Jump to foreign tax credit

4. Start with screen Foreign Taxes and select Continue to follow prompts.

its helpful if TURBO tax told us which items are deductib...

stronsa — Thu, 06 Jun 2019 00:50:20 GMT

its helpful if TURBO tax told us which items are deductible from a T4 and where to put them on. I do follow the instructions, but there should be more information to assist people doing their own taxes. CPP, EI are these deductible and where do they go. I know income with held where it goes but come on now....

Are CPP and EI deductible?

nam — Thu, 06 Jun 2019 00:50:22 GMT

Are CPP and EI deductible?

Turbotax offered me the option to put in amounts paid for...

velvetmonster — Thu, 06 Jun 2019 00:50:23 GMT

Turbotax offered me the option to put in amounts paid for EI (box 18), and for Union Dues (box 44). CPP contributions (box 16) and RPP contributions (box 20) do not qualify according to the tax treaty because these payments go toward a specific economic benefit (pension payments).

Per IRS publication 514, if you get specific benefit from a payment you make, it is not a tax, and you don't get credit for paying it. So if you pay into the Canadian Pension Plan, it's possible you can retire and collect a pension, so that means you will get a specific benefit from the payment. EI is different because it is calculated on a flat percentage of salary basis, and so it qualifies as a tax. Here is the specific text that says required foreign pension contributions are not taxes and EI benefits can be considered taxes:

"A foreign tax imposed on an individual to pay for retirement, old age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. For more information about these agreements, see Publication 54."

This is my best guess and the way I'm entering things, and I am noting that here for when I forget what the rules are next year. I am not a tax expert, though.