In the T2209 form, when calculating the Net foreign non-business income, should we subtract the retirement plan contribution from my total foreign income?

[Gary0512]

I am using TurboTax to report my US income and claim the foreign tax credit. Let's say my total US income is 10K and made 2K contribution to my US 401k plan. What is my foreign non-business income on the T2209 form? Is it 10K or 8K? Currently, Turbotax automatically files in 10K, but based on the T2209 instruction, net foreign income should subtract the pension plan contribution

[TurboTax_Susan]

Did you enter your 401k contribution on the  U.S. and Foreign Retirement Plans page?

[Gary0512]

Thanks for your reply. Yes, I entered all my contributions to the retirement plan on that page. 

[TurboTaxAniqua]

Thank you for confirming; however, please ensure that you entered the other information correctly. 

In the Foreign Income section, did you enter the 10K as 'Gross' and then list the 2K under 'Expenses' or 'Deductions related to this income'?

Are the 10K and 2K figures already converted to Canadian Dollars (CAD) using the Bank of Canada annual average rate?

Have you completed the 'Form RC338' or the equivalent treaty election section in TurboTax to allow the 401(k) deduction in Canada?

[Gary0512]

Thanks,

Under the Foreign Income section, there are no 'Expenses' or 'Deductions related to this income' options

I also cannot find RC338, but I completed RC268 to indicate my retirement plan contribution. The net non-business foreign income is my gross foreign income, not the one after the retirement deduction. Is this the right number?

[TurboTax_Susan]

@Gary0512 

If you are using TurboTax Desktop, you can enter deductions from your foreign non-business income on the Foreign Tax Credits worksheet in Form mode, or the Foreign tax credit section in EasyStep Mode.

If you are using TurboTax Do It Yourself (Online), deductions from your foreign non-business income on the Foreign Tax Credits page.