Foreign income declaration

[az_j]

I entered Canada as Permanent resident in April 2019.

From Jan 2019 to March 2019, I had income from then home country where I am citizen.

Below are the income details 

Gross: 100000.00

Standard deductions:  10000.00

Income tax paid :5000.00

Net salary received: 85000.00

I'm using the standard version of Turbotax. Could you please let me know in which section of Turbotax I should declare these numbers. This is the first time I'm going to file a tax return in Canada

Also want to highlight that all the numbers mentioned above are from the period before I became a Canadian resident. So should I even declare it?

[smiddlewood · Accepted solution]

Hi Az_j,

You do need to declare your situation via turbo tax, but only the following details:

The date you entered Canada

Your earnings (gross before tax) in the period before you entered Canada (your Jan-March figure)

Here's why:

In Canada you get a tax free income allowance - roughly the first $12k per annum.

However, if you are only in Canada for a part of the tax year, you are only entitled to part of this tax free income allowance.

Say the $12k tax free allowance per annum is around $1000 per month if divided equally. 

As you entered in March, you'll be entitled to 9/12ths of the allowance. Around $9k.

By giving TurboTax the date you entered Canada, it can do an accurate calculation on the above.

The amount of gross pre tax earning you had in your home country is actually irrelevant for this calculation - you could enter $1, or $100000 dollars, and your tax owed/refund will remain the same. The $ figure of your overseas earnings doesn't actually show on your printed tax return for the CRA.

Hope that helps.

[az_j]

Hi Smiddlewood.

Thank you. That answer was crystal clear.

Now the calculations also match.

[Sb113]

Hey there

I've been filling out the Turbo tax form on the basic free software and came to the same issue with declaring foreign income before I gained permanent residency in Septmber 2019. When i declared the foreign income prior to the start of my residency, I lost $1,000 off my tax refund in the summary box at the top left corner of the application. If i leave the space at 0 it doesn't make the deduction. why is that?

I converted the income to Canadian dollars using the annual exchange rate. 

S