CRA has published income tax folio S5-F2-C1: Foreign Tax Credit, replacing the IT bulletin. The foreign non-business tax credit is calculated separately for each foreign country. However, if the total foreign taxes are less than $200, CRA will usually allow a single calculation. The form is used to calculate the non-business foreign tax credit you can subtract from the income tax you owe to the province or territory where you lived at the end of the year. This includes foreign non-business income such as pension income, employment income, director's fees, commissions, interest, dividends, and some taxable capital gains. Section 126 provides two types of foreign tax credits: one for foreign taxes on business income; the other for foreign taxes on non-business income. Subsection 126 (1) sets out the rule for computing FTCs for foreign taxes on non-business income—i.e., foreign tax levied on employment income, capital gains, dividends, interest, rent, and How do I apply the 1042-S form to my tax return? Open the "Foreign" Slip and apply 1042-S Box 2 in "Foreign Interest & Dividends" - Box 7a in "Foreign Taxes Paid". Amount entered will calculate to line 12100 of the Canadian tax return (T1). Foreign taxes paid will be applied as a Foreign Tax Credit, on line 40500. If one pays tax in the US, via a US tax return filing, for which one claims a foreign tax credit on the T1, CRA now requires actual proof of IRS processing and merely attaching a copy of the filed Note: All amounts entered into TurboTax should first be converted to Canadian dollars.The CRA will accept the Bank of Canada exchange rate in effect on the day you received the income.. Important: Don't enter your foreign rental income on the Foreign slip screen, as this will duplicate the amounts that you'll enter using the steps below. From the menu, select Find and enter rental in the The non-business taxes must add up to more than $200, and you need to fill out a form for each foreign country where you earned income. If you live in Manitoba or Québec, the application of this tax credit varies. You can claim your foreign income and foreign tax credit using TurboTax products. Consider TurboTax Live Assist & Review if you A provincial foreign tax credit is available if your federal foreign tax credit on non-business income is less than the tax you paid to a foreign country. It can be claimed on the T2036. If you paid foreign taxes to more than one country that were $200 or more, then you must calculate each country taxed separately then add the totals on the Submit only one Form T2209 per taxation year. If your total foreign taxes paid to all foreign countries was more than $200, calculate the total foreign taxes paid for each foreign country on a separate sheet and enter the total on this form. For more information, see Income Tax Folio S5-F2-C1, Foreign Tax Credit. Enter the amount from line 1 or This form is used to calulate the Federal Foreign Tax Credit. Canada Revenue Agency. cra-arc.gc.ca. Skip to content | Skip to Contact Us. Help. Search. canada.gc.ca Institutional links. Forms and publications; T2209 Federal Foreign Tax Credits You can view this form in: PDF t2209-11e.pdf (36 KB) For people with visual impairments, the If you paid foreign income tax in the U.S., you'll want to retain a copy of your W-2 information slip, your Form 1040 from the Internal Revenue Service (IRS), and