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  • Daniel Gray CPA US Tax Services Toronto Canada

How to get back your money from CRA (when already taxed by IRS but disallowed by CRA - using transcr

Has CRA sent you a large tax bill because it disallowed foreign tax credit claim for IRS or state taxes paid until you provide CRA with an official transcript? OK, so now you’re at the point where has provided you with official tax authority transcripts, where do you go from there and is there an easy way, such as online upload?

You should be able to upload and reply online with CRA by logging into ‘my account’ with CRA and then selecting ‘request a change to your T1 tax return’. One generally needs foreign income to claim foreign tax credit, as such credit is offset against foreign income (for both CRA and IRS). Once you’ve made sure foreign income is correctly reported, then request foreign tax credit in the CAD$ equivalent for the USD$ tax paid to IRS (and actually owed, meaning – don’t claim the over-withholding portion paid but not owed, after all, you can file a return with IRS requesting that amount to be refunded, so CRA would not agree to refund that portion) focusing on lines 431 & 433. Note that the CRA system doesn’t allow input in certain places (e.g., direct change to line 405 for foreign income tax credits), but should automatically update those locked foreign tax credit cells once related boxes are changed elsewhere. Upload the IRS and/or state official transcript supporting said claim.

The transcript upload step requires a case number and at the initial steps of online correspondence of an assessment, CRA may not yet have provided a specifically-coded confirmation or case number. So, at that point, if CRA approves the revision without requesting further proof or upload, you may be done (at least for now), but if it does request further proof, it should then assign a specifically-coded confirmation or case number to upload documents and you’d use that number to upload your proof. Should you find yourself with CRA asking for proof but find that its online system doesn’t yet offer you an option of uploading documents, call CRA to ask how to send them the info and/or to obtain a case number that will unlock the upload option for you.

It’s not just any random number you come across in correspondence, you’re looking for the specifically-coded confirmation or case number CRA assigns and that number yields the power to unlock the upload document feature. Once CRA issues you a reference number with the qualifying coding to upload on their site, you must go online and enter the tax year and the reference number found in the upper right corner of such letter received and upload the proof, such as IRS transcript and/or state proof (if you’re signed up with CRA to receive mail online, said letter should already be on CRA site and you can download it).

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