My clients are a US S-Corporation and its owner-employee-actor that worked in Canada in 2019 and 2020. Acting fees and residuals were paid to the corporation. Canada taxes were withheld from many, if not all, of the payments are rates ranging from 10% to 23%. In 2019 and 2020, income were approx $140,000 and $43,000 CAD respectively with taxes of $23,000 and $7,400.
I’m wondering if it is worthwhile or possible to file Canadian returns for one or both years. If Canada taxes only Canada income. If returns would have to be filed for both the corporation and the individual.
My understanding is that the client can deduct Canada taxes on his US tax returns or claim a foreign tax credit for the actual required paid Canada taxes. Since withholding is an estimate and filing CA returns could generate a refund, I believe he is barred from claiming the US tax credit unless the Canada taxes would be equal to greater than the amounts withheld.
Hope someone can provide insight.