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mifter

Canadian student in USA - paying taxes w/ income from both countries

46 posts in this topic

Hi all, I've searched through the forums (and the internet) for help with this, but without much luck.

 

Here is my situation: I am PhD student in the US who has an NSERC fellowship (income from Canada) that is supplemented by income from the university where I work/study (NSERC funding < guaranteed stipend at the university). Thus, I have income from both countries. I want to know if anyone has been in the position before, and how they filed taxes. Is this familiar to anyone? Does anyone have/ever seek legitimate help from an accountant with cross-border knowledge?

 

Thanks for any help,

 

MC

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I am in this position too (w/SSHRC), and I'm sure that there are thousands of others out there living on a dual stipend. This is my first year, so I haven't figured out what's going to happen entirely yet. I know that I'll have to file in both countries this year anyways (I had income and paid tuition in Canada before coming down to the states, plus the US is pretty unforgiving in its protocols for J1s). The year after that, who knows? I will do whatever the tax software tells me.

 

Anyone have any experience on the matter?

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I have direct experience on this matter, however, I am away at a conference right now and will provide more details for both of you next week. PM me if I forget :) It is complicated but I heard the hard way and I can help!

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Okay I am back.

 

If you are a Canadian citizen and you are in the US for school you are a "deemed resident for tax purposes". When filing taxes as a resident, you must always file all your international income. Therefore, while you are a grad student, you will always file taxes to Canada, no matter what country pays you and what country you live in. 

 

In addition, if you are a Canadian in the US for school, you are most likely a non-resident alien (NRA). In order to file as a "resident", you have to be in the US for a number of days per year, however, the first 5 years on F-1 or J-1 status do not count. Therefore, unless you did an undergrad in the States, it's almost certain that you are a NRA for taxes in the US. In the US (and most countries), non-resident file taxes only on US-based income.

 

I'll just use some simplified numbers. My income is $20k from NSERC (Canada) and $10k from my school (American) plus a $40k tuition waiver. This is how I file my taxes in each country:

 

1. Canada: I tell the CRA about all three sources of income: the $20k from NSERC, the $10k from my US school and the $40k for tuition. I also claim my tuition paid because this counts as paying my school $40k/year for tuition, then getting it reimbursed. You have to get your US school to fill out a TL-11A (see here: http://www.cra-arc.gc.ca/E/pbg/tf/tl11a/README.html).They fill out this form, sign it officially and you file it with your Canadian taxes to claim the educational tax credits. At this rate, I'm going to rack up about $250k in educational tax credits by the time I finish (but it's not as good as it sounds, but that's another story).

 

My total taxable income in Canada is $0 because all income that support graduate studies are not taxable in Canada. But I still should declare these income sources. 

 

And you cannot NETFILE because you are not living in the US. Instead, you must use tax software (I recommend the online UFile software) and then print out the relevant forms and mail it to the CRA's International Tax Office.

 

2. You must also file US Federal income tax. As a non-resident, I only pay US tax on US-based income but tuition waivers are tax exempt. There are some US-Canada tax treaty that might affect you. You need to use special tax software for non-residents in order to file your US taxes as a non-resident. I highly recommend these software because they automatically detect all eligibility for tax treaties. My school provides Glacier tax prep software for free to us; it costs $35/return otherwise. Worth it though. The US does not tax-exempt grad students and as a non-resident we get very little tax deductions. Most likely, we can only claim the $4000 or so "personal exemption" so you will pay about 10% tax on the remaining taxable income.

 

In one of my years here, my US income was less than $10k and that resulted in a tax treaty being applied that made the first $10k earned tax-exempt. This was a very good year because I got all of my US Federal tax back!!

 

You must also file by mail as a non-US resident.

 

3. Finally, you also file US State tax. The rules vary for each state. In California, non-residents do have to declare all world-wide income if it is paid for work done in California (so the NSERC would count in this case). I paid state tax on the entire $30k income (the tuition waiver is tax exempt). State tax was the hardest because the non-resident federal tax software does not include the state tax forms (unlike the version for residents). I had to do it by hand and it took many more hours! All to find out that I still owed the State $8 in taxes! 

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Oh, an important note: the order you should complete your taxes is:

 

1. US Federal tax

2. US state tax (often requires copy of federal tax return)

3. Canadian income tax (you will require copy of your US tax return if you want to claim paid US taxes as credit towards income tax in Canada [i.e. to avoid double taxing--only important if you are not a graduate student though])

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Thanks a million TakeruK! Very, VERY helpful and clearly outlined information! I feel way more prepared than before.

 

The one thing I'm left wondering about is whether or not spouses (a j1 and j2) can file together? Does that double the personal exemption amount available to be claimed? We're more or less both living on my stipend/scholarship cheques...

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Thanks a million TakeruK! Very, VERY helpful and clearly outlined information! I feel way more prepared than before.

 

The one thing I'm left wondering about is whether or not spouses (a j1 and j2) can file together? Does that double the personal exemption amount available to be claimed? We're more or less both living on my stipend/scholarship cheques...

 

Good question -- I was assuming single student in this scenario but I am actually a J1 with my spouse working as J2.

 

For the United States:

If your J2 spouse is NOT working (as was the case for us in the 2012 tax year):

1. You do not get an increase in the personal exemption

2. Your spouse does NOT file a tax return. Instead, there is a special form you fill out that indicate they did not do any work and were legally present in the US. I forgot the form # but it will be part of your tax package if you use something like Glacier to prepare your own taxes. However, you have to mail this form separately.

 

If your J2 spouse IS working (as was the case for us in the 2013 tax year):

1. You do not get an increase in the personal exemption. Instead, you must file as "married, filing separately", which is the least favourable status to file as (the IRS doesn't like us non-resident aliens). 

2. So, you file your own tax return with your own personal exemption.

3. Your spouse will file their own tax return for their own personal exemption. 

4. But, each of you will have tax brackets as if you were single. This is usually bad, but not always. :(

 

However, for Canada, you do definitely file together. In fact, because your US income is for graduate studies, it does not count as taxable income in Canada. So, for the 2013 tax year, we filed as a family of two with only my spouse's income, which is well below poverty levels for a family of two. Therefore, we qualified for a ton of rebates and we ended up getting a $300 refund ("Working Income Tax Benefit") even though we had no income in Canada that year. It made me really appreciate how our country treats young working professionals.

 

---

 

One word of warning though: Like I said above, Canadians living abroad pay income tax to Canada on all worldwide earnings. Let's just use a concrete example with fake numbers. For my J2 spouse, her US earnings in 2013 counted as taxable income in Canada. Let's say she paid $2000 in taxes to the US government and would normally owe $1400 in taxes to the Canadian government for the same income. What happens is:

 

1. First, all Canadian tax credits are applied (e.g. Canadian personal exemption, education tax credits, etc.) to pay off the Canadian tax owed ($1400).

2. If any tax is still owed, any money already paid to another government (e.g. the States) also count as tax credits in Canada (i.e. so you are not double taxed).

So, in this made-up example, J2 spouse would not pay any money to Canada since she paid equal or more to the US government. However, notice that Canadian credits are applied first. This means that if your J2 spouse has leftover educational tax credits, this would be all exhausted before the foreign tax credit kicks in. So in this sense, you are "double taxed" and I called the CRA to check and they confirm this is the intention of the law.

 

If your J2 spouse is not working, then this would not affect you unless you stayed in the US for a postdoc. Then, before you can apply any US taxed paid as credit against owing Canadian taxes, it is likely you will also exhaust all of your Canadian educational tax credits.

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I was just doing my taxes, and I came across this thread. Very, very helpful! Thank you so much. I didn't know that CRA allowed tuition waivers to be counted as income. What I had been doing was only reporting my stipend income and not claiming any tuition paid, which means I missed out on some educational tax credits last year.

 

So, to clarify: if my university gives me $25k stipend and a $30k tuition waiver, I should report $55k in total income and then claim $30k as tuition paid? Is that right?

 

And, I'm assuming that universities in the US are okay with filling out the TL11A, even though you've technically not paid tuition directly?

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Carthage32: Last year, I called the CRA to make sure. In my Canadian taxes, I only report my NSERC fellowship income. I do not report my tuition waiver nor do I report the top-up that my school pays for the difference between my NSERC income and my actual stipend. Maybe you should call the CRA hotline yourself in case there are differences, but the CRA representative told me that I do not have to report any non-employment based income that is provided to support graduate studies. In my tax return, I include the T4A that NSERC issues me but my line number for total taxable income is $0 (since NSERC income is not taxable and neither is the US income).

 

To be completely clear, my income sources are:

$21,000 from NSERC

$9,000 from my school

$42,000 tuition+fees waiver.

 

To the CRA, I have $0 taxable income but I do include my T4A showing my NSERC (non-taxable) income. I also file a TL11A that my school fills out and claim $42,000 in education credits (plus the X dollars per month for being a full time student). 

 

To the IRS, I do not have to claim my non-US income, so it's just $9,000. Tuition is also not taxable income in the US so I can ignore that too.

 

Yes, US schools seem to be fine filling out the TL11A. In the past 2 years, tuition was billed to my student account but a credit is applied immediately and the TL11A had no problems. However, since 2014, they changed it so that the tuition is billed differently so the first version of the TL11A I asked for did not include tuition. I had to ask them to check their records and confirm that tuition is being paid from some source--they did so and sent me a corrected TL11A with all of the tuition. So, you should be able to claim the tuition on the TL11A even if you don't get it billed directly. 

 

Finally, you have up to 7 years to file a correction on Canadian taxes. I also did not realise the tuition deduction in my first year so I filed a correction some 8 months later and it was properly accounted for. It's well worth your time, at about 15% tax credit rate, $30,000 in educational credits is worth almost $5000 in saved taxes in the future (but note the "double tax" thing above). The easiest way to file a correction is to log into the CRA's "MyAccount" (if you have this set up) and you can file a correction online--they will just ask you which line numbers you want to change. These numbers require proof though, so after you submit it, they will follow up with a request to mail in your TL11A.

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Great, thanks, TakeruK! Thank you very much for your detailed response.

 

I guess the only thing I was confused about was claiming a tuition waiver as tuition paid without showing it as income. But, it makes sense that one doesn't have to report non-employment income. And, looking at the TL111A form, it does say that eligible tuition includes "fees paid by scholarship income". 

 

Thanks again!

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The eternally relevant thread...

I have an identical situation, so this has been really helpful; thanks!  Some follow-up questions:

  • How do you report your US income (the stipend from your university on your W2) while having it be considered non-taxable?  I called the CRA and they told me to report all income.  The advice was that the stipend top-up would be "Foreign employment income", but I could then use T2209 to get a tax break on the US tax paid on that income.  This method results in me paying tax in Canada on all income, even though this income is used to support my graduate studies.
  • Why do you say we are "deemed" residents instead of "factual" residents for tax purposes?
  • As for the tuition credits, I submitted a TL11A, but the CRA determined that I was not due the tuition amount.  As you say, the tuition is charged to my bill and then tuition credits are automatically applied by my department.  Nevertheless, my notice of reassessment indicates that I was not granted the tuition amounts. Any suggestions?
  • Lastly, (since I see that you're in California), do you file using form 540NR Long or Short?  California charges tax on worldwide income, which (according to the information I gathered from the California tax board) includes foreign scholarships.  As such, it would seem we need to file using 540NR Long, completely with the associated Schedule CA, and indicate the foreign income we don't report on the federal return.  The net effect is to (slightly) change our tax bracket...

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22 minutes ago, h-bar said:

The eternally relevant thread...

I have an identical situation, so this has been really helpful; thanks!  Some follow-up questions:

  • How do you report your US income (the stipend from your university on your W2) while having it be considered non-taxable?  I called the CRA and they told me to report all income.  The advice was that the stipend top-up would be "Foreign employment income", but I could then use T2209 to get a tax break on the US tax paid on that income.  This method results in me paying tax in Canada on all income, even though this income is used to support my graduate studies.
  • Why do you say we are "deemed" residents instead of "factual" residents for tax purposes?
  • As for the tuition credits, I submitted a TL11A, but the CRA determined that I was not due the tuition amount.  As you say, the tuition is charged to my bill and then tuition credits are automatically applied by my department.  Nevertheless, my notice of reassessment indicates that I was not granted the tuition amounts. Any suggestions?
  • Lastly, (since I see that you're in California), do you file using form 540NR Long or Short?  California charges tax on worldwide income, which (according to the information I gathered from the California tax board) includes foreign scholarships.  As such, it would seem we need to file using 540NR Long, completely with the associated Schedule CA, and indicate the foreign income we don't report on the federal return.  The net effect is to (slightly) change our tax bracket...

1. I don't report US income on my Canadian taxes. In 2014, I called the CRA and they specifically told me not to report income used to support graduate studies. I don't think the tax law changed though? This is consistent with when I was a grad student in Canada---I was not taxed on income supporting my graduate studies (however, TA and RA work in Canada don't count as supporting studies, but as an employee)

I guess I don't know what to say here? I'm not a tax expert so I don't think I can overrule the CRA agents, but I am confused why your CRA contact told you a different thing. But if you do the T2209, you should not have to actually pay any additional tax on your Canadian income (my spouse does this because their income is not to support their grad studies).

2. Oops. I was using "deemed" and "factual" interchangably because both requires you to report all worldwide income as if you were in Canada, but you are right that they are technically different things. After checking the definition, you are right that we are certainly factual residents.

3. All of my TL11A submitted in the past has been accepted so I don't know what the difference is. Quick question---are you just filling in the TL11A yourself, or are you getting a school official to do it? You need the school official to fill it out (I just submitted mine to my school today actually). Ensure that they filled it out correctly (it's understandable that they are not familiar with Canadian tax forms)---they need to indicate the time you're a full time student and the total amount paid in tuition & fees (it's a blank in the paragraph in the first section so if they missed that, it could cause issues). Otherwise I'm not sure why??

4. I fill out the 540NR Long form because of the Canadian income from NSERC, as you said. 

---

Extra note: I got a pleasant surprise when doing the 2015 taxes. It was the end of my NSERC award, so I only had half the normal income from them but I picked up a US based fellowship, so my income split was:

NSERC: $10,500
US Fellowship: $10,000 (issued a 1042-S)
From my school: $9,500 (issued a W-2)

Apparently, according to the tax software, this means I am eligible for the Canada-US tax treaty which applies only when the relevant income is under $10,000. And it seems like fellowships (i.e. 1042-S income) is not counted as relevant under this tax treaty (the software knows about both US income sources!) so I don't have to pay any federal tax on the W-2 portion at all (I still pay California state tax though, and again using the Long Form). So even though the US fellowship doesn't change my overall stipend, the reduction in taxes is like an effective pay boost! (Also, I'm lucky that my W-2 income sources was just under $10,000 because it's not progressive; if you earn $10,001 then you pay full taxes!).

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Thanks for the reply!  To address your points:

1. Hmm.. maybe I'll call the CRA again and double check whether or not RA/TA appointments that support grad studies are taxable.  I've generally been really pleased with the help I get from the CRA agents (and I'm grateful that there's actually a number to call where help is provided), but as with any helpline you can sometimes get a bad apple.  I'll call again and update with their response.  At any rate the T2209 will provide a tax break, but it's not enough.  My software (and calculations) are still showing tax owed.  

2. Interesting note: I spoke to the international agents at the CRA, and one of them said Canadian students studying outside of Canada (with no spouse, or a spouse joining them out of country), who do not own a home in Canada should likely file as non-residents.  This seemed like a good idea (because we wouldn't have to pay any tax), but after some more digging I'm starting to think that it's a really bad idea.  It seems we'd need to pay different kinds of tax (departure/Part XIII tax), and we'd need to sever all ties to Canada.  Given that most of us have Canadian bank accounts, driver's licenses, rooms in family homes, social ties, etc., the most likely determination from the CRA is that we're still factual residents.

3. My university completed the TL11A and I double checked it.  They also provided me with official university documents showing my full time studies and the tuition paid for each quarter.  In my first year of PhD studies the CRA asked for additional documents to support my claim and I provided a letter and any other documents they required.  They determined that I was entitled to the tuition credits.  The following year I filed the same way, and was again asked for supporting documents.  I gave the same forms and the same letter (with an extra paragraph explaining that this happened last year), and the CRA determined that I was not entitled to the credits.  Win some/lose some??

Extra note: Congrats on the fellowship!  In particular, congrats on finding one that's open to non-US citizens!

Edited by \hbar

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1. Yeah, I have also had great experiences with the agents. I didn't specify RA/TA on the phone conversation since I didn't think the exact job title matters. However, I remember something now that might matter! My school does not consider RA and TA work as employed work. In fact, we are not technically employed as RA or TAs at all. Instead, they just give us a bunch of money and they ask us to do work "as part of our education" (although they issue a W-2, they are adamant that we are not employees). I think in theory, I am not obligated to actually work but they are also not obligated to give me money. So, this might be why the income isn't taxable even though the equivalent thing in Canada would be. I know that other schools actually employ their students!

I'm also surprised to hear that your taxes paid in the US (T2209) doesn't cover all of the tax you would owe in Canada? For most grad stipend ranges, e.g. $25k-$35k, you would be taxed more in the US than you would in Canada (since the basic personal exemption is much higher in Canada than the US: $11k in Canada vs. $4k in the US for non-residents). I'm not doubting you (and no need to share your personal details!)---I'm just surprised.

2. My spouse is in the US with me as J-2 and they file as a non-resident (i.e. they don't file at all because they have no more Canadian income). Last year, we didn't know this and filed for both of us and they did not process my spouse's return and said that my spouse is likely a non-resident so it's not necessary. I think it's good if you are not a student. I talked to many different phone agents to verify this is the case even if the spouse is a student and they said yes, it's possible for one person (me) to be a factual resident but the spouse be a non-resident. You don't actually have to sever ties---you don't need to take action to become a non-resident because they will just stop accepting your tax returns. However, if you want an official evaluation of your residency status, you can file a RC-92 (I think that's what it's called) where you fill in a long survey and then the CRA will give you its decision on your tax status based on that survey.

I did not bother doing this because the CRA says this is just "advice" not an official decision. After all, taxation is the law and the CRA are just the agency in charge of collecting taxes---they cannot make legal determinations (just like a police officer can't tell you "it's okay to steal this" and "waive" the law for you!). My reasoning, which may not be wise, is that the worse that could happen if I'm wrong is that I have to refile a bunch of old taxes and maybe pay additional tax + interest (I don't expect to since I have enough educational credits from undergrad + T2209 credit to offset if necessary). I think I have followed all due diligence that it's not tax fraud? Hope it works out lol

3. I got a request for further documentation in my first year too. I supplied it and it was accepted. Then all future years were accepted without question. Weird. I had thought I would only be asked once, so I guess this is good to know that I might get asked again in the future!

On the fellowship: thanks! It was the only fellowship in my field that was open to non-US citizens :)

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Hey all, I hope everyone's tax season went okay. So, I have a somewhat bizarre question, based on totally second-hand info:

Is is true that for Canadian citizens if we complete and submit a W-8BEN form (or something like that?), we can be exempt from the taxes that the IRS withholds?

I don't know too much about this, but I have heard that under the US-Canada tax treaty, we can be exempt from the withholding taxes if we submit the appropriate paperwork. Anyone know more about this?

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46 minutes ago, Carthage32 said:

Hey all, I hope everyone's tax season went okay. So, I have a somewhat bizarre question, based on totally second-hand info:

Is is true that for Canadian citizens if we complete and submit a W-8BEN form (or something like that?), we can be exempt from the taxes that the IRS withholds?

I don't know too much about this, but I have heard that under the US-Canada tax treaty, we can be exempt from the withholding taxes if we submit the appropriate paperwork. Anyone know more about this?

This is based on my limited understanding only, please don't take it as fact and check with a real expert! 

Yes, if you complete a W-8BEN form with your university, it will exempt you from being required by the University to automatically withhold your income tax at the nominal rate of 30% for foreign payees (i.e. people like us). Instead, the University will then withhold the proper amount of taxes (more like 14%). 

Note that the W-8BEN does not exempt you from taxes, just reduces the automatic 30% withholding to something more reasonable. You can think of the W-8BEN as something like the Canadian TD-1 form (http://www.cra-arc.gc.ca/E/pbg/tf/td1/README.html) where you tell your employer how much you would like them to withhold. Normally, you will fill out a W-8BEN during registration/orientation at your school (in my case, I filled it out during International Students Check-in, along with other international student administrative paperwork). Just like the TD-1 form, you fill out a W-8BEN for every new position you take or at any time you want to update your information with your employer.

There is a Canada-US tax treaty and it basically applies to income under $10,000 only. I don't know all of the legal fine print of the treaty so I can't help you there, but if the treaty specifies that you can have a lower withholding rate, you write that into the W-8BEN and the school will withhold less taxes. However, if you still end up owing the IRS money, then you would have to pay it when you complete your tax return. In addition, the IRS tax code specifies that if you do not have your employer withhold a certain amount of taxes, you must make quarterly estimated tax payments or face a penalty when you do file your return. So, unless you are very sure of what you're doing, I would have the school withhold the typical amount for your income level (typically 10% to 15%). I would not try to get a 0% tax withholding rate, unless you know that your income will be completely covered by the tax treaty, then perhaps it's better for you to have the money now than to wait to file your taxes each year.

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Ah okay, I understand. Thank you so much for the response, TakeruK.

So far the university has been withholding 14% exactly. So, maybe I did complete the W-8BEN form at some point during orientation. I didn't realize that it would be up to 30% without the form. This helps to clarify it.

Thanks again!

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Hi all, another Canadian enrolled in a PhD program at a U.S. institution here. My situation is similar to some of the other posters' in that I have a mixture of US and Canadian income:

  • NSERC funding ~20,000 CAD/year.
  • Graduate Assistant-ship ~9,000 USD/year stipend + ~16,000/year Tuition waiver
  • Departmental supplement ~2000 USD/year

I am pretty sure that, as with some of you above, my $9000 stipend should count as nontaxable scholarship income, rather than taxable employment income. Although it is reported on a W2 (rather than the $2000 supplement, which is reported on a 1042s), I am not actually doing any work for the department right now (nor will I, for the first two years of my program), so I don't see how this could be considered employment income.  Likewise, it seems as though I should be allowed to claim the $16,000 amount as tuition paid, even though it is not me paying it. Nice and simple, so I thought.

However, I wasn't so fortunate as some of you here in that the bursar's office at my institution has repeatedly and adamantly refused to fill out a TL11A for me. Having spoken to a CRA agent about the situation, I was told the following things:

  •  My institution does not have any legal obligation to complete the form for me (I had hoped maybe they did, under some kind of tax agreement between Canada and the US) so I am really stuck with their refusal.
  •  I am recommended against forging ahead and declaring tuition amounts on my 2015 tax return and including official receipts etc as proof of the amounts in lieu of the actual TL11A.
  •  Instead, I was recommended to simply not declare any tuition paid at all on my 2015 tax return, and afterward file for an adjustment, including proof of any claimed tuition amounts, and explaining why I was unable to produce a TL11A. The CRA will then, I suppose, make a decision about my individual case.

Of course, the tax deadline having come, I am stuck with filing my return sans tuition amounts and filing an adjustment later. I'm not in love with the outcome here, though. For one, this seems very labour-intensive (although I do have 10 years to make adjustments, I suppose I could try filing them all at once, at some later date). I'm also concerned because it does not some to be a guarantee that I will be able to convince the CRA my my tuition is really tuition and my scholarship income is really scholarship income, etc.

Has anybody else encountered this problem? I thought I should post my experience here so that people can see it is not necessarily a given that a US university will comply with a request to compete a TL11A.

Edited by PennPal
typo

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Hi folks, quick question for you, as I begin my involvement in a thread that will certainly be super helpful over the next few years: were you folks with a Tri-Council fellowship having it deposited in USD in a US bank account? And if so, this does not alter the fact that it is a Canadian source of income, right? (the word source should confirm my presumption, but I thought I would ask in case there is a hoop to jump through, such as making sure it's deposited in Canada instead or something). Thanks :) and thanks particularly to those who have been frequent posters over the last year(s), making this thread so helpful for the upcoming years!

Edited by biggoalies

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8 hours ago, PennPal said:

Hi all, another Canadian enrolled in a PhD program at a U.S. institution here. My situation is similar to some of the other posters' in that I have a mixture of US and Canadian income:

  • NSERC funding ~20,000 CAD/year.
  • Graduate Assistant-ship ~9,000 USD/year stipend + ~16,000/year Tuition waiver
  • Departmental supplement ~2000 USD/year

I am pretty sure that, as with some of you above, my $9000 stipend should count as nontaxable scholarship income, rather than taxable employment income. Although it is reported on a W2 (rather than the $2000 supplement, which is reported on a 1042s), I am not actually doing any work for the department right now (nor will I, for the first two years of my program), so I don't see how this could be considered employment income.  Likewise, it seems as though I should be allowed to claim the $16,000 amount as tuition paid, even though it is not me paying it. Nice and simple, so I thought.

However, I wasn't so fortunate as some of you here in that the bursar's office at my institution has repeatedly and adamantly refused to fill out a TL11A for me. Having spoken to a CRA agent about the situation, I was told the following things:

  •  My institution does not have any legal obligation to complete the form for me (I had hoped maybe they did, under some kind of tax agreement between Canada and the US) so I am really stuck with their refusal.
  •  I am recommended against forging ahead and declaring tuition amounts on my 2015 tax return and including official receipts etc as proof of the amounts in lieu of the actual TL11A.
  •  Instead, I was recommended to simply not declare any tuition paid at all on my 2015 tax return, and afterward file for an adjustment, including proof of any claimed tuition amounts, and explaining why I was unable to produce a TL11A. The CRA will then, I suppose, make a decision about my individual case.

Of course, the tax deadline having come, I am stuck with filing my return sans tuition amounts and filing an adjustment later. I'm not in love with the outcome here, though. For one, this seems very labour-intensive (although I do have 10 years to make adjustments, I suppose I could try filing them all at once, at some later date). I'm also concerned because it does not some to be a guarantee that I will be able to convince the CRA my my tuition is really tuition and my scholarship income is really scholarship income, etc.

Has anybody else encountered this problem? I thought I should post my experience here so that people can see it is not necessarily a given that a US university will comply with a request to compete a TL11A.

I think the least labour intensive way to go about this is to save everything, and then when you are back in Canada within 10 years, hire a tax attorney to do all of the work of filing adjustments. It will probably cost about a few hundred dollars, but you should be able to get this (and maybe more) back.

You can't make your school fill out a TL11A for you, and the CRA has no jurisdiction in the US. I'm sorry to hear that your Bursar office refused to do so :( My school has become very familiar with the TL11A (about 5% of the grad student population are Canadian and Canadians are the 2nd biggest international group here). 

I think if you would prefer to take action now instead of later, you can go against their recommendation and claim the tuition amounts anyways. Without a TL11A, your file will be reviewed and then a CRA agent will contact you and ask for the TL11A. At that point, you can discuss your specific case with them. Maybe the agent will be unhappy with you because you did it this way, but it's a potential way to proceed. But if this is going to be happening every year, then you're likely better off waiting to file all the adjustments at once.

Finally, despite this hassle, you should be okay for now, right? By this, I mean that you shouldn't be double-taxed on your current stipend and putting you in a bad financial situation. You'd claim your US income as taxable income in Canada but the 9000 USD = approx. 11300 CAD is just about the 2015 "basic personal amount". And even if there is a few dollars above, you'll be taxed in Canada at 15% for the few dollars only. But your taxes paid to US IRS is also credited towards your Canadian taxes, so there should be no additional cost to you in terms of Canadian taxes right? The hassle is just that you have to deal with adjustments later to get your other credits.

1 hour ago, biggoalies said:

Hi folks, quick question for you, as I begin my involvement in a thread that will certainly be super helpful over the next few years: were you folks with a Tri-Council fellowship having it deposited in USD in a US bank account? And if so, this does not alter the fact that it is a Canadian source of income, right? (the word source should confirm my presumption, but I thought I would ask in case there is a hoop to jump through, such as making sure it's deposited in Canada instead or something). Thanks :) and thanks particularly to those who have been frequent posters over the last year(s), making this thread so helpful for the upcoming years!

Tri-Council awards paid overseas are generally paid in the currency of the country you're in, but that does not change the fact that the income is a Canadian source. You will get a T4A with your award amount (in CAD) in Box 105 of the T4A (Box 105 is for scholarships). The payor on the T4A is listed as "Government of Canada", so it's definitely a Canadian source.

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Hey PennPal, sorry to hear about your TL11A issues. It's really frustrating that your school won't fill it out. Is there someone else you can talk to? For what it's worth, when I initially went to my bursar's office, they didn't really know what to do with it, but luckily they sent me over to the Registrar and they filled it out. I don't know if the Bursar and the Registrar are different offices at your school, but maybe that's worth a shot?

I should also mention that I only found out about the TL11A last year (thanks to TakeruK's comments on this thread!). So I also had to file adjustments for previous years, and it was pretty straightforward. So that option will always be there for you. 

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One quick point about the Tri-Council awards: am I correct in thinking that, if you are a full-time student eligible to claim the full education amount, you do not have to report scholarships like the Tri-Council? 

I used Studio Tax to do my returns, and it would not let me enter the Tri-Council amount from the T4A in line 130. When I asked around why that was the case, I was told that scholarship amounts that fund your enrolment in a full-time program are not taxable and do not have to be reported.

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4 hours ago, Carthage32 said:

Hey PennPal, sorry to hear about your TL11A issues. It's really frustrating that your school won't fill it out. Is there someone else you can talk to? For what it's worth, when I initially went to my bursar's office, they didn't really know what to do with it, but luckily they sent me over to the Registrar and they filled it out. I don't know if the Bursar and the Registrar are different offices at your school, but maybe that's worth a shot?

I should also mention that I only found out about the TL11A last year (thanks to TakeruK's comments on this thread!). So I also had to file adjustments for previous years, and it was pretty straightforward. So that option will always be there for you. 

To add to this, at my school, I need both the Registrar and the Bursar to fill out my TL11A. I take the form to the Registrar first and they fill out the # of months in the program after confirming enrollment etc. Then, they take it to the Bursar (across the hallway) and the Bursar fills out the tuition and fee info. Then, I get an email from the Bursar to pick it up.

Also, I did not know about the TL11A in my first year, so I also had to file an adjustment once. It was "easy" (much easier than doing so with the US tax return). If you have the CRA "MyAccount" set up, you just enter the new numbers online and they will ask you to mail in supporting docs if they want them.

4 hours ago, Carthage32 said:

One quick point about the Tri-Council awards: am I correct in thinking that, if you are a full-time student eligible to claim the full education amount, you do not have to report scholarships like the Tri-Council? 

I used Studio Tax to do my returns, and it would not let me enter the Tri-Council amount from the T4A in line 130. When I asked around why that was the case, I was told that scholarship amounts that fund your enrolment in a full-time program are not taxable and do not have to be reported.

My tax software (UFile) allowed me to fill in Box 105 of the T4A. It was a little tricky---on the T4A screen, you have to go through a drop down menu to find the Box 105 option. And the T4A is labeled as "Pensions, annuities and other income" so it's not clear that "other income" includes scholarships too.

In the tax return that the software generates, it shows I have the NSERC money from a T4A. However, on the forms that I actually send to the CRA, there's nothing about this income because as you said, it's non-taxable. Maybe Studio Tax just takes a shortcut and doesn't even allow you to enter non-taxable income. I like the UFile way better because I have a record of it, even if it's not taxable. However, it is correct that you don't have to report it in your taxable income amounts, as far as I know. Also, NSERC will send a copy of your T4A to the CRA anyways, so they will know about it and if it's a problem, they will let you know.

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Ah great thanks, TakeruK. That makes sense. I actually tried tinkering with Studio Tax again, and it turns out that it does allow you to enter the amount in the T4A data input screen, but it just doesn't show up on the actual T1 general return. You're right that this make more sense because this way, there is a record of it. Thanks again!

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