When a Canadian works within the U.S., their employment source of revenue is also exempt from U.S. taxation in some instances as much as a $10,000 prohibit. To your son’s case, Arlene, it appears like each federal and state withholding tax carried out to his income from the Silicon Valley corporate in California.

What’s an Particular person Taxpayer Id Quantity? When do you wish to have it?

When Canadians earn U.S.-source source of revenue, like employment source of revenue, they’re usually required to record U.S. federal and state tax returns. The U.S. similar of a Social Insurance coverage Quantity (SIN) is a Social Safety Quantity (SSN). SSNs are usually required for U.S. electorate and a few non-citizen citizens of the U.S. To your son’s case, his non-resident alien standing within the U.S. approach he wishes an Particular person Taxpayer Id Quantity (ITIN) to record a federal go back. This is a tax processing quantity for positive non-resident and resident extraterrestrial beings.

With the intention to practice for an ITIN, Arlene, a taxpayer will have to record a Shape W-7, Software for IRS Particular person Taxpayer Id Quantity (ITIN) with their U.S. federal tax go back.

Arlene, it appears like your son had a federal and state tax submitting requirement within the U.S. He must search out recommendation from a U.S. tax skilled who can assist validate and help along with his tax submitting necessities.

Methods to record international source of revenue in Canada

Canadian citizens are taxed on their international source of revenue. In case your son spent a summer season within the U.S. running, however in a different way maintained his Canadian ties, he most probably remained a Canadian resident for tax functions for all of 2022. That suggests his U.S. source of revenue must be reported on his Canadian tax go back, transformed to Canadian greenbacks.

To steer clear of double taxation, international tax withheld is usually eligible for a international tax credit score on a Canadian tax go back. Then again, for your son’s case, it’s the web tax withheld that are supposed to be claimed, Arlene. It isn’t the tax withheld on his W-2, however the federal and state tax payable as calculated on his federal and state tax returns. So, for instance, the California refund would scale back the declare for the state tax withheld on his W-2.

When do Canadians need to record a U.S. tax go back?

Canadians will have to usually record a U.S. tax go back with the Inner Earnings Provider (IRS) for incomes different U.S.-source source of revenue. This contains U.S. apartment source of revenue. U.S. non-resident belongings house owners who promote actual property within the U.S. also are usually required to finish a U.S. tax go back.

Sadly, the processing occasions for non-residents submitting U.S. tax returns can also be gradual. It’s common for the Canada Earnings Company to invite for documentation of international tax paid. A duplicate of a U.S. tax go back might not be enough proof, both. The CRA usually desires documentation of the U.S. tax review from the IRS and state tax government with the steadiness owing or refund.