How do I not get double taxed for income in Canada I earned in 2024?

[arvind-doraiswam]

I worked for 2 months in Canada and got a T4. The T4 shows I paid taxes. Now I need to enter this in Turbo Tax USA. I can enter it in Foreign Income but then how do I say that I already paid taxes on this? I tried the Foreign tax credit but I am apparently not eligible for that as I did not stay 330 days in Canada. There are some posts that ask to enter a negative number but I am not sure about this. Please help - thank you. Arvind

[MaryK4]

If you are a U.S. resident or resident alien, you must report worldwide income.  Because you paid the tax in Canada, you can claim the Credit for foreign Taxes paid which is located in the Deductions & Credits.  You are referring to the foreign income EXCLUSION, which requires the 330 days.  

[arvind-doraiswam]

Thanks a lot. The problem is when I click there - it asks me "Where Did You Receive Interest Income From?" from a 1099-INT. I have *some* Indian foreign income I report on a 1099 INT. But the T4 is not a 1099... its a W2 equivalent - so I am unclear on how to enter it. Could you please help?

Arvind

[ThomasM125]

You first enter the income in the Wages and Income section, then Less Common Income, then Foreign Earned Income and Exclusion. On the screen that says What Forms(s) Was foreign Income Reported On? choose A statement from my foreign employer:

You then need to go to the Estimates and Other Taxes paid section in the Deductions and Credits area of TurboTax, then choose Foreign Taxes to assign your foreign income to a country and enter the tax paid. On the screen that says Does your total taxes paid only include taxes reported on a Form 1099-INT or Form 1099-DIV, indicate that you have foreign taxes paid on rental, royalty or other income (including wages) and enter the foreign taxes paid:

You will get credit for your foreign taxes to the extent of your US tax on foreign income. Any unused credit can be carried back one year or carried forward up to ten years.