March 24, 2017

CRA does not accept US 1040 forms for claiming foreign tax credit

In 2015, I worked in the USA for a few months, and received income. Later on, I filed my US tax return based on the US IRS 1040 form. Since I was a Canadian resident, I also needed to file the Canadian tax return. I did this and also submitted the copy of US 1040 tax form.


My prior experience with this tax return issue was in general satisfactory. Canada Revenue Agency used to accept the US 1040 tax forms as proofs to support the claim of foreign tax credit. However, I recently received the letter from Canada Revenue Agency and notified that my claim of foreign tax credit was denied since I did not submit the supporting proof.

I was very shocked about the letter as I was notified to pay to Canada Revenue Agency quite a bunch of money!

I called Canada Revenue Agency and explained all the details of the matter. It seems that there are some tax return changes made inside Canada Revenue Agency. They require the formal IRS tax documents. I need to contact IRS and obtain the official US IRS tax return transcript.

I waited for 4 weeks to get the IRS transcript, and uploaded the documents to Canada Revenue Agency online system. I will report back to check how this matter goes.

Such a mess!

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