QUESTION:
Hi,
I am a canadian citizen. I received a one time dividend from a US company
that amounted to $2500 and $750 was with held. Can I get the $750 back? How?
Thanks.
-----------------------------------------
david ingram replies:
Under Article X of the US Canada Income Tax Convention (1980) the maximum
withholding should have been 15% which is $375.00 when you are a Canadian.
To get the excess $375.00 back, you have to fill out a 1040NR (and likely a
W7 to get a US identification number). Page 4 and 5 of the return are the
important pages where you will show the dividend in the 15% column under a
Treaty and the right hand side of page 5 where you will tell the IRS what
treaty and article you are using.
THE other $375 can be claimed as a credit on your Canadian return. You have
to convert everything to Canadian Dollars and report the US gross dividend
on schedule 4. You will then put the same amount on line 433 on schedule 1
of the T1 General and the tax paid on line 431 of Schedule 1.
You can find the W7 at
Fill out the W-7 with US notarized documents and submit it with the tax
return. If you live close to the border, take the paperwork to a US social
security office (Buffalo, Bellingham, etc.) and they will notarize it for
you. Otherwise you have to find a US notary in Canada. Greg Samuels at
(604) 742-4242 is one lawyer in Vancouver who could do that for you. Greg is
also your best choice if you have an accident in Canada with a US registered
car or an accident in the US with a Canadian registered car.
Answers to this and other similar questions can be obtained free on Air
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