Foreign Tax Credit for Canada

[clevin01]

I was paid in the US for work with a Canadian Company.  All of that income in reported via 1099s.  I had to pay taxes in Canada for the time I worked there. In the foreign tax credit section, of Turbo Tax, it asks me about my foreign earnings.  How do I report the income without double counting? Should I report $0 even though I had to pay Canadian taxes on part of my US income?

[PhyllisG]

As with the United States, Canadians who are still considered residents of the Canada must report their world-wide income to Canada. 

The Canada-United States Income Tax Treaty prevents a resident of one country from being taxed by each of the two countries on the same income in the same year (referred to as "double taxation").

However, the treaty does allow Canadians, who paid taxes while residing and working in the United States temporarily, the ability to claim the foreign tax credit to offset Canadian taxes paid on the same income that has to be reported to Canada. 

It appears according to the treaty, that double counting is not an issue if you had also reported the U.S. income on your Canadian return and paid the tax.