CANADA US military officer living in washtington state

hi david, you may remember xxxxxxxxxx and myself (fiance) coming to see you in feb 2006. he is in the US miliotary and we've since married. he's residing in WA and i'm here in vancouver.   i am late filing my income tax. after i enter my basic persona amount for myself, it asks me to enter the amount for spouse (8344.00) minus his net income to get the result . however, as he is a us government employee i am required to put 'nil' for his income, so in regards to the non refundable rax credits,  am i inputting a ''0' for his income which would give the max amount of 7585 or is this a '0' as well?   thank you for your help, ------------------------------------------------
david ingram replies:

It is a 'zero' as well.

You should put his net income in Canadian dollars in the line asking for his net income.That means that you do not get GST or any other credits and do not claim him as a dependent.

Assumiong he made $100,000 Canadian, his Net income for Canadian tax purposes is $100,000.  His taxable income on a Canadian Tax return would be zero as you would deduct the whole salary on line 256 under Article XIX of the US Canada Income Tax treaty.

However, his NET income is whatever his gross salary is less any of the amounts from lines 200 to 234.

He and you CAN and SHOULD file a US 1040 joint return however.  It will save him several thousand dollars.  Your income is reported on that retrn in US dollars and neutralized by filing form 1116 to claim a foreign tax credit or form 2555 to exempt earned income or a combination of both.

If he did not file a joint return for 2006, he should file a 1040X and amend it. 

You / he should likely have us do it if that is not what was done in the first place.