I just found it last night from this big hint: "When foreign property income (other than from real property, or from a trust) has had withholding tax in excess of 15% deducted, the excess can be deducted from income on line 232 of the personal tax return, “Other deductions”, as a s. 20(11) deduction. The excess foreign tax over 15% deducted under s. 20(11) reduces the amount of foreign non-business income which is used in the foreign tax credit calculation. If your foreign income is reported on a T3, then it is from a trust (such as a mutual fund or ETF), so this deduction does not apply. Personal income tax software will automatically provide the s. 20(11) deduction for income and foreign taxes reported on a T5, and will ignore any excess tax paid on a T3, as it should."
Step 1: find the total of all of your foreign income, eg. from T5s and T5013s
but not from T3s
Step 2: find the total foreign tax paid, eg. from T5s and T5013s
but not from T3s
Step 3: find the 15% of Step 1
Step 4: line 232 is Step 2 minus Step 3
I hope this helps.
To access the FTC form, go to the "Find" icon at the top right corner of your screen and type in "Foreign Tax Credit". If anything has been entered under 20(11), this is where you will find it.
Yes that takes me to the Foreign tax credits worksheet but the Excess tax paid (Section 20(11)) is a calculated field and was not overridden. How does it calculate this value? I've gone through all my T3 and T5 slips and none of the numbers in any combination add up to the value in this box.
Hello gwt01,
If you are uncertain, I would advise you to delete these T-slips and re-enter them if the numbers are not adding up.
Also, you must take into consideration the type of foreign income, and from what source country. You may have other foreign-sourced entries as well that may affect the calculation.
Excess tax paid (Section 20(11)) is calculated automatically. From the CRA please review the following link to explain why jump to "1.22 NBIT". - https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-2-foreign-tax-credits-deductions/income-tax-folio-s5-f2-c1-foreign-tax-credit.html#N104BF
And the following link to explain the calculation - https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-2-foreign-tax-credits-deductions/income-tax-folio-s5-f2-c1-foreign-tax-credit.html#N10DCF
For further details please see our TurboTax blog article: The Federal Foreign Tax Credit
I just found it last night from this big hint: "When foreign property income (other than from real property, or from a trust) has had withholding tax in excess of 15% deducted, the excess can be deducted from income on line 232 of the personal tax return, “Other deductions”, as a s. 20(11) deduction. The excess foreign tax over 15% deducted under s. 20(11) reduces the amount of foreign non-business income which is used in the foreign tax credit calculation. If your foreign income is reported on a T3, then it is from a trust (such as a mutual fund or ETF), so this deduction does not apply. Personal income tax software will automatically provide the s. 20(11) deduction for income and foreign taxes reported on a T5, and will ignore any excess tax paid on a T3, as it should."
Step 1: find the total of all of your foreign income, eg. from T5s and T5013s
but not from T3s
Step 2: find the total foreign tax paid, eg. from T5s and T5013s
but not from T3s
Step 3: find the 15% of Step 1
Step 4: line 232 is Step 2 minus Step 3
I hope this helps.
Why the heck is the CRA auditing this deduction on my return? This is a tax software calculation and not an inputted value subject to human error. All the information is available on my T5 slip and I’m able to manually duplicate the deduction, yet the CRA cannot? Your response is spot on and was helpful.
Thank you for choosing TurboTax.