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Canada and the United States

What’s New

U.S. Tax Day for Individuals Extended to May 17

March 22, 2021

The IRS has announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended to May 17, 2021, and that individual taxpayers can postpone federal income tax payments for the 2020 tax year normally due on April 15 to May 17, without penalties or interest and regardless of the amount owed. The extension only applies to individual federal income returns and tax payments (including tax on self-employment income) otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax.

Interest Relief for COVID-19 Benefit Recipients in Canada

March 2, 2021

Canada Revenue Agency has announced that taxpayers with taxable income of $75,000 or less, who received eligible benefits, will not be charged interest on 2020 amounts owing until April 30, 2022. Late filing penalties still apply for returns that aren't filed by their due dates.

Canadian Tax Change Highlights for 2020

Feb. 4, 2021

Employees working at home due to COVID-19 may be able to claim a deduction, income tax measures to support journalism, and the refundable Canada Training Credit for tuition fees.
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United States Tax Change Highlights for 2020

Feb. 4, 2021

EIP payments not taxable, Recovery Rebate Credit and other taxpayer relief, and a new charitable donations deduction on Form 1040.
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Tax Extension Update

March 23, 2020

The U.S. federal filing deadline is now extended to July 15.

COVID-19 Tax Extensions

March 18, 2020

The Government of Canada announced an extension today for taxpayers to file their 2019 returns and make payments of balances owing. The U.S. Treasury Department and Internal Revenue Service announced an extension for taxpayers to make payments of amounts owing, but the filing deadline remains April 15. Your state may also allow an extension. For example, California has announced an extension of time to file and pay. Check your state's finance website to find out.

Canadian Tax Change Highlights for 2019

Jan. 27, 2020

Revised tax forms, a new Canada Training Credit, and enhanced Canada Workers Benefit highlight the changes for Canada this year...
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United States Tax Change Highlights for 2019

Jan. 27, 2020

Revised tax forms and reporting, elimination of the federal Health Care Coverage Shared Responsibility Payment, and Virtual Currency reporting highlight the changes for the U.S. this year...
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Upcoming Changes to the Canada Pension Plan

Jan. 21, 2019

The Canada Pension Plan is an important source of retirement income for many Canadians, and the government has taken steps to enhance it.
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Tax Changes for the U.S.

Jan. 21, 2019

U.S. taxpayers have sweeping changes to contend with this year, including a major transformation of Form 1040, six new schedules, and modifications to Standard Deductions, Personal Exemptions, and Itemized Deductions.
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Tax Changes for Canada

Jan. 12, 2018

Exempt scholarship or bursary income can now include programs taken below the post-secondary level under certain conditions. The tuition amount has been enhanced, but the education and textbook amounts eliminated. The new “Canada caregiver amount” replaces the old caregiver amount, family caregiver amount, and amount for infirm dependants age 18 or older.
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Tax Changes for the U.S.

Jan. 12, 2018

The filing due date has been extended to April 17. There is tax relief for those impacted by Hurricanes Harvey, Irma, or Maria, and miscellaneous other changes.
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Tax Changes for Canada

Jan. 23, 2017

Canada Revenue Agency introduces a new reporting requirement when selling a principal residence. There are new credits for educators and individuals eligible for the Disability Tax Credit. Children's Fitness and Arts Credits have been reduced, and the Family Tax Cut has been eliminated.
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Tax Changes for the U.S.

Jan. 23, 2017

The filing due date has been extended to April 18. The IRS has reintroduced its online Get Transcript service. There are new bans for those claiming certain credits when not eligible, and various other adjustments.
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Tax Changes for Canada and the U.S.

Jan. 12, 2016

The Canadian government continues to provide some tax relief to families. Last year's Family Tax Cut is followed up by an increase to the Universal Child Care Benefit, and a refundable credit for children's fitness expenses. U.S. changes include a new Child Tax Credit rule that reduces the additional amount taxpayers can claim if they exclude foreign income, and a new one-rollover-per-year limit for IRAs.

Simplified Reporting on Form T1135

Jan. 12, 2016

Canadian taxpayers owning foreign property that cost more than $100,000 – but less than $250,000 – can now use a much easier reporting method on Form T1135 Foreign Income Verification Statement. CRA recently announced that these taxpayers will simply have to check a box for each type of property held. Taxpayers whose foreign property cost more than $250,000 must still use the detailed reporting method from prior years.

File Form T1135 Online This Year

Feb. 12, 2015

CRA has announced that Canadian residents owning foreign property costing more than $100,000 can now efile Form T1135 Foreign Income Verification Statement, for 2014 and subsequent years only.

Important Tax Changes for Canada and the U.S.

Jan. 20, 2015

The Family Tax Cut could lower tax for certain Canadian families in which both spouse's have income, with one spouse's income much higher than the other. U.S. taxpayers are now required to have health insurance coverage, qualify for an exemption, or make a shared responsibility payment.

IRS Launches International Data Exchange Service

Jan. 12, 2015

Financial institutions and host country tax authorities will use this service to securely send information reports on financial accounts held by U.S. persons to the IRS under the Foreign Account Tax Compliance Act (FATCA) or pursuant to the terms of an intergovernmental agreement (IGA).

Another Form to File for Americans Living in Canada

Dec. 8, 2014

U.S. citizens and resident aliens who have funds in a Canadian “Passive Foreign Investment Companies” (PFICs) are now required to file an information return with the IRS: Form 8621 Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. Canadian mutual funds and certain other investments are considered PFICs and Form 8621 should be filed to report them.
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Canadian Government Enhances Children's Fitness Tax Credit

Oct. 15, 2014

Prime Minister Stephen Harper has announced that the maximum amount claimable will increase from $500 to $1,000 as of the 2014 tax year, and the credit will become a refundable tax credit as of the 2015 tax year (it is currently nonrefundable).

One Less Form for Canadians to Fill Out

Oct. 10, 2014

The IRS has announced that U.S. citizens and resident aliens holding Canadian RRSPs/RRIFs will no longer need to file Form 8891 with their U.S. income tax returns to report the plan balances, or to claim an exemption from U.S. taxation on income earned inside the plans. There is still a requirement though to report financial accounts each year (including RRSPs/RRIFs) on FinCEN Form 114 (FBAR), and on Form 8938 if the total of all foreign financial assets exceeds the threshhold amounts.

The Foreign Tax Credit Explained

Aug. 1, 2014

This well-written (and amusing) article by Roger Adams (EA) is published on the American Citizens Abroad website.

Do You Need a Visa When Crossing the Border?

July 23, 2014

Guest author Robert Baird discusses visa requirements for musicians travelling to Canada or the United States to work.
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IRS Eases Requirements for Offshore Voluntary Disclosure Program and Streamlined Procedure

June 18, 2014

The Internal Revenue Service announced major changes in its offshore voluntary compliance programs, providing new options to help both taxpayers residing overseas and those residing in the United States. The changes are anticipated to provide thousands of people a new avenue to come into compliance with their U.S. tax obligations.

Transferring a Home to a Nonresident Alien Spouse

June 12, 2014

U.S. citizens living abroad, who jointly own a home with a nonresident alien spouse, might seek to avoid paying tax to the United States when the home is sold or eventually disposed of (if their interest in the home shows a gain of more than $250,000), by transferring their portion of the home to their spouse in advance. The IRS made a subtle change to the 2012 version of Publication 523, which implies they might frown upon a tax free transfer.
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Canada and U.S. Reach Agreement on FATCA

Feb. 5, 2014

The Foreign Account Tax Compliance Act (FATCA, enacted by the U.S. in 2010) would have required Canadian financial institutions to report to the IRS accounts held by U.S. taxpayers. Under the new agreement, financial institutions in Canada will not report information directly to the IRS. Relevant information on accounts held by U.S. taxpayers (including U.S. citizens who are residents or citizens of Canada) will instead be reported to the Canada Revenue Agency (CRA). CRA will then exchange the information with the IRS through the existing provisions and safeguards of the Canada-U.S. Tax Convention (more information).

IRS Launches Get Transcript

Jan. 29, 2014

The IRS is trying out a new portal that taxpayers can use to obtain tax information. Get Transcript allows taxpayers to access return transcripts, account records and transcripts, wage and income amounts, and verification of non-filing. Taxpayers are the only ones who can set up and access their accounts through Get Transcript (tax preparers are not allowed to do it for them). Looks like a great service.

Important Tax Changes for Canada and the U.S.

Jan. 29, 2014

Canadian taxpayers who haven't made donations after 2007 may want to contribute to charity and receive an enhanced nonrefundable tax credit for gifts. U.S. taxpayers living in Canada in a legal same-sex marriage must now generally use the married filing jointly or married filing separately filing status on their U.S. returns.

CBC Radio Reports on FATCA

Nov. 13, 2013

The CBC show The Current reports on the new law that will force Canadian banks to hand over to the U.S. information on their American clients. Click the podcast link to listen to the discussion about Canadian privacy concerns, the option of renouncing U.S. citizenship, and the possibility of being turned away at the border when trying to enter the U.S.

Changes to CRA eFiling

Oct. 17, 2013

Beginning Feb. 2014, Canadian tax preparers will be able to eFile two years of tax returns (current year plus prior year) instead of one. Returns for immigrants to Canada will also be eligible for eFile.

CRA Releases Expanded Foreign Income Verification Statement

June 25, 2013

Canadians who hold foreign property costing more than $100,000 are now required to provide more information to CRA on Form T1135, including names of foreign institutions, countries where properties are held, and income generated from foreign properties.

The information on this website, and the use of this website, are both provided without warranty of any kind. Income tax rules change every year and some information may be out of date. All readers wishing to take advantage of the information offered here should consult a qualified income tax preparer. In no event will Brad Howland, Howland Tax Services, or this website be liable for any damages, including lost profits, arising out of the information offered on this website, or the usage of this website. All material on this website Copyright © 2001-2021 by Howland Tax Services, Inc. Please contact us for permission to use this material in any form. Website designed and maintained by Brad Howland.