Filing resident taxes in both US and Canada (1040 + T1)

[willowhp]

I will be filing taxes in Canada for the first time. I have H1b in US and PR in Canada and maintain permanent homes in both US and Canada. I am a tax resident of both countries for 2024, but all my income is US sourced (W2, rental income, stock). All US sourced income was earned on US soil.

I was thinking of doing the following -

1. File 1040 in US (as a resident), married filing jointly, claim child tax credit - apply for transcript
2. File T1 in Canada separately for me and spouse - claim FTC for taxes already paid in US, pay difference in taxes to CRA - send via mail including IRS and state transcripts

My question is - if I have filed resident tax in US, can I still claim FTC on the taxes paid in Canada? OR does the treaty force dual residents to choose to be a tax resident of just one country? I have noticed many in this forum have used 1040NR and filed in US as non-residents, hoping to hear from someone who has filed resident taxes in both places without issues - please share your experiences?

 

[hauptbahnhof]

In a similar boat, did you ever figure this out? Do both you and your spouse have to each file Canadian tax return as a tax resident?

 

[willowhp]

In a similar boat, did you ever figure this out? Do both you and your spouse have to each file Canadian tax return as a tax resident?

Yes, spouse and I will file separately as Canadian tax residents. We filed US as residents already, now waiting to file with CRA (within next 3 weeks).

Will definitely share my experience here once all the expected CRA assessments are completed and this tax chapter is closed.

 

[hauptbahnhof]

Yes, spouse and I will file separately as Canadian tax residents. We filed US as residents already, now waiting to file with CRA (within next 3 weeks).

Will definitely share my experience here once all the expected CRA assessments are completed and this tax chapter is closed.

Great thanks, would love to hear about your experience and the tax credit claiming process!

 

[abdmuq11]

can we create a group for this?

 

[willowhp]

Sharing my timeline for the 2024 tax year -
Mid March - Filed US taxes 1040, married filing jointly using turbo tax
April - Filed Canadian tax returns for myself and spouse, claimed FTC on taxes already paid to US - we used H&R block
April 30 - Paid our taxes at the local bank
August - Received review letter from CRA, asking for supporting documents
September - Sent the documents to CRA
January - CRA sent us a final review letter saying they have allowed the claim under review based on the documents we sent them

These were my learnings from last year for the Canadian tax filing -
1. As we were paying taxes for the first time, we had no RRSP room, which meant that our 401K contribution was taxed - I believe this is the case for anyone filing tax for the first time.
2. We were allowed to deduct all our medical expenses, including medical, dental, vision premiums which were payroll deductions. This helped reduce our tax bill somewhat.
3. What I sent to the CRA - W2, all 1099, US tax returns, IRS transcripts, State transcripts, an excel file with medical expense summary, explanation of benefit documents from the insurance provider, prescription receipts, copy of last pay stub of the year for the insurance premiums.

Hope this helps - I don't monitor this forum regularly but I will try and answer any questions if I can when I see them.