US Unemployment Insurance

Here one about Canadian residents working in the US. This year the first $10,200 of unemployment insurance is not taxed in the US. I would assume that the full amount received including the $10,200 would be taxed in Canada. Any opinions?

While we’re on the subject, what if the person receives both ordinary and eligible dividends in the US. Eligible dividends are not taxed in the US, but are they in Canada?

Canadian residents, of course, are taxed on world wide income.
Under-repoiirting income would lead to penalties in the first instance, and very much more serious consequences later.

Cra does not consider the $1200 stimulus ck income.

Does your definition of worldwide income include what is not taxed in another country?

Just because it isn’t taxable in the US doesn’t mean it’s tax free in Canada. Each country has their own set of rules. EI is full taxable in Canada whether it was paid by Service Canada or any other foreign gov’t agency.

Eligible dividends paid in the US are fully taxable in Canada at foreign income rates not dividend rates. They are in the US as well in the upper income tax brackets - just at a lower rate than other types of income. In the lowest tax brackets that rate is reduced down to 0%.

"your definition of worldwide income "

Naah - not mine - that belongs to the Income Tax Act…
Taxpayers should not treat these matters casually or lightly - the legal consequences can be severe…
(And for that matter, tax preparers should be cautious for the same reason)…

"3 The income of a taxpayer for a taxation year for the purposes of this Part is the taxpayer’s income for the year determined by the following rules:
(a) determine the total of all amounts each of which is the taxpayer’s income for the year (other than a taxable capital gain from the disposition of a property) from a source inside or outside Canada,…

And the consequences which can potentially follow include:
"239 (1) Every person who has…
(d) wilfully, in any manner, evaded or attempted to evade compliance with this Act or payment of taxes imposed by this Act,…
is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to
(f) a fine of not less than 50%, and not more than 200%, of the amount of the tax that was sought to be evaded, or
(g) both the fine described in paragraph 239(1)(f) and imprisonment for a term not exceeding 2 years…"

It doesn’t matter whether or not it is taxed in another country, if it is taxed it may be eligible for a foreign tax credit, but still must be declared


Perfect answer!! :joy:

Thanks everybody… It confirms my thoughts. I was just hoping someone would know otherwise.