Foreign Tax Credit and s. 20(12) Deduction Calculation

I happened to see an article about foreign tax credit and the following is an extract.

“The foreign taxes are sometimes not completely recovered by the federal and provincial foreign tax credits. Non-business foreign taxes which are not recovered as a tax credit may be deducted from income on line 23200 of the personal tax return, “Other deductions”, as a s. 20(12) deduction

FTC is calculated in T2209. Do you manually claim unrecovered FTC when preparing T1s? Would like to hear from fellow accountants.

It depends on whether they qualify pursuant to the Act in all the facts of a particular case.

The following is the exact wording:

“S20 (12)
In computing the income of a taxpayer who is resident in Canada at any time in a taxation year from a business or property for the year, there may be deducted any amount that the taxpayer claims that does not exceed the non-business income tax paid by the taxpayer for the year to the government of a country other than Canada (within the meaning assigned by subsection 126(7) read without reference to paragraphs (c) and (e) of the definition non-business income tax in that subsection) in respect of that income, other than any of those taxes paid that can, in whole or in part, reasonably be regarded as having been paid by a corporation in respect of income from a share of the capital stock of a foreign affiliate of the corporation.”

I think taxcycle calculates this automatically. You have to click the review message to verify that you qualify.

Thank you joe.justjoe1 and Versa!