Help with understanding T2209 and T2036

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rsibleyJunior Member
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Joined: 20 Nov 2008
Location: Sunnyvale

Help with understanding T2209 and T2036

Post Mon Apr 13, 2009 8:19 pm

I moved from Ontario to California in October 2008 to work on a TN work visa. I worked for a company in Ontario up until end of August, then began working for the company in California from beginning of October forward.
I've filed my taxes as 1040NR and am now looking at my Canadian taxes. I understand that the taxes I paid to the USA are used as a foreign tax credit when filing my Canadian taxes by using the T2209 and T2036 forms. I'm trying to understand how these forms are to be filled out and am confused about the following things.

(1) Non-business income vs. business income. I worked for a company, is my income therefore non-business?

(2) What about the fact that I will receive a fairly large tax refund from the US? When claiming foreign tax credits, do I report the amount of tax I paid in 2008? Or the amount of tax that I should have paid? (ie. the amount I paid is significantly higher than what I should have paid - hence the large refund).

(3) A few places on both these forms say "Only include for the part of the year you were a resident of Canada". Now - I was only living in canada from Jan-Sept, but because I filed 1040NR does that mean for tax purposes I am a resident of Canada for the entire year?

T2209:
(3) line 431: Is this basically the sum of the Federal income tax, state income tax, social security and medicare taxes that I paid?

(4) line 433: (b) This is the amount of income I earned in the USA from Oct-Dec? (after converting to CDN $)

T2036
(5) Provincial or territorial tax otherwise payable. The instructions say "calculate this amount by adding the amounts from lines 42 and 43 of ON428 to the amount form line 48 and continue the calculation. The amount from line 60 is your 'provincial or territorial tax otherwise payable'." I'm confused - is this amount 42+43+48 or is it 60? These values are not the same for me. This instruction is very confusing.

Thanks to anyone who can provide some insight on these things!!

Richard
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StevenCanuckAbroad VIP
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Location: Calgary

Re: Help with understanding T2209 and T2036

Post Wed Apr 15, 2009 7:57 am

I think you're going to need to call the CRA or get some software to help with calculations, but non-business income usually means income from investments, dividends, etc. Professional income is business income.

If you're expecting a refund from the IRS, probably better to wait until you have it before you file in Canada, unless you know exactly what it will be.

If you filed as non-resident in the US then you were resident in Canada for the whole year for tax purposes.
Steve.
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