Taxation of Canadian maternity benefits for US resident working for the Canadian Government - form 8833

question: Hello,
I had a question about Canadian paid maternity benefits. I am a Canadian Government worker who lives in the US and commutes daily. Right now my income is not taxable in the US under section XIX of the tax treaty. My question is, would the maternity benefits that I would receive from Service Canada and the top up that my employer contributes be taxable in the US?
Also I had a question about IRAs. I have read about IRAs becoming taxable once someone moves back to the Canada, but I am assuming it would immediately taxable in my case as I continue to pay taxes to Canada because of my employment?

Thank you

david ingram replies

You  are absolutely entitled to your maternity benefits. 

However, in my opinion, the maternity benefits are are taxable in the US. 

But, in my opinion, the top up benefits are not.

Also, any bank account interest, any dividends, or any rents you receive from either country are taxable on your US tax return.

In the meantime, it is very important that you file a US return and report your Canadian government earnings on the US 1040 and claim the exemption under article 19 of the US Canada Income Tax Convention.  You should likely be filing form 8833 to  explain the treaty exemption in real black and white.   

Form 8833 can be found at   
http://www.irs.gov/pub/irs-pdf/f8833.pdf

I am assuming that you are married to an American and have a US resident alien (green) card.  Your husband and yourself should be filing a joint US return.

Even though exempt, you must file a US return, report the income and claim the exemption. 

This is the kind of thing we do for diplomats and government employees for several countries but mostly for US government employees based or living in Canada.

IRA's are taxable in Canada when you cash them in - the internal earnings are not.  However, when you cash in the IRA, the US will tax it first and Canada will tax it second.  The tax you pay to the US will be a tax credit (usually dollar for dollar) on Canadian forms T2209 and T2036 (there is a different form for Quebec's foreign tax credit)  However, if you cash the US IRA in before age 59 1/2, there is a US 10% penalty.


EI rules follow:

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My_question_is: Canadian-specific

question: Dear David,please tell me/us whether Canadians who temporarily work in the USA paying all taxes properly are eligible to receive Canadian EI in case their work in the USA got terminated?
thank you,
Vladimir

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david ingram replies:

The answer is yes but the method varies from state to state.  You must start your claim with Service Canada however. 

You can find out the whole thing at
http://www.servicecanada.gc.ca/eng/ei/information/outside_canada.shtml#How

I have reproduced it here - good luck



plo  
Employment Insurance (EI) and Workers and/or Residents outside Canada

Employment Insurance (EI) online services

Do you have a question about the EI program? The frequently asked questions might help!


What you should know...
Who can apply
How to file a claim for American Unemployment Insurance benefits
How to file a claim for Canadian EI benefits for people residing outside Canada
Residents of the United States

Maternity, parental, sickness and compassionate care benefits
Canadian government and Armed Forces personnel posted in the United States
Your permanent residence is in a country other than Canada and the United States
You are a commuter


What you should know...  

Certain persons working outside Canada may be entitled to benefits under Canada’s EI program. If you are working outside Canada for a Canadian company or the Canadian government, you are usually covered by EI. You will, however, not be insured by Canada’s EI program if your job is covered by the country in which you are working.

If you are not sure whether your job is insured under Canada’s EI program, ask your employer. Ruling on employment insurability is the responsibility of Canada Revenue Agency (CRA) , therefore, please call the toll-free number 1 800 959-5525  for enquiries regarding the insurability of your employment.

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Who can apply  

Canada EI benefits may be paid to you when you reside outside Canada in the following situations:

American Unemployment Insurance benefits may be paid to you if your last employment was in the United States and you now reside in Canada. If you also had previous employment in Canada, you may be able to file a claim for Canadian EI benefits instead. You may be able to receive benefits from either Canada or the United States but not both at the same time.

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How to file a claim for American Unemployment Insurance benefits    

To file a claim for American Unemployment Insurance benefits, you must contact the Telephone Information Service or go to your Service Canada Centre, you will be asked to give your name, address, phone number, Social Insurance Number (SIN) and Social Security Number (SSN) along with the name of the State from which you want to claim benefits. Depending on the State in which you last worked you may be able to file a claim directly with the State via the Internet or by phone. If the State does not accept claims via the Internet or by phone, information will be forwarded to a designated office responsible for handling such claims based on where you reside in Canada. You may also contact the designated Service Canada Centre directly.

You must provide proof that your employment in the United States was authorized as per American immigration regulations and that you are available for and actively seeking work in Canada. If you are not a Canadian resident you will be asked for proof that you are authorized to work in Canada.

A person who has worked for the American Armed Forces in the United States and wants to move or return to Canada, must file a claim for benefits at the nearest "State Workforce Development Agency" in the United States. Service Canada Centres in Canada cannot accept these claims for benefits. 

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Atlantic Region  

All residents from: New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island

Service Canada  Centre
Sub-Unit of interstate claim processing
120 Harbourview Blvd.
P.O. Box 4000
Bathurst, N.B.
E2A 1R6

Phone: 506 548-7405  — Fax: 506 548-7186  

Quebec Region  

All Quebec residents

Service Canada  Centre
Sub-Unit of interstate claim processing
2327 Bl du Versant Nord
Sainte-Foy, QC
G1N 4C2

Phone: 1 877 228-9769  — Fax: 418 681-4810  

Ontario Region  

All Ontario residents

Service Canada  Centre
Sub-Unit of interstate claim processing
1 North Front St.
P.O. Box 4800
Belleville, Ontario

Phone: 1 877 486-1650   -  Fax: 613 969-4017  

Alberta Region  

All residents from: Manitoba, Alberta, Nunavut, Saskatchewan and Northwest Territories 

Service Canada Centre
Sub-Unit of interstate claim processing
6712 Fisher St SE
Calgary, AB
T2H 2A7

Phone: 1 866 483-6466 - Fax 403 509-1690

British Columbia Region  

All residents from: British Columbia and Yukon

Service Canada Centre
Sub-Unit of interstate claim processing
6712 Fisher St SE
Calgary, AB
T2H 2A7

Phone: 1 866 483-6466 - Fax 403 509-1690  

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How to file a claim for Canadian EI benefits for people residing outside Canada    

You may file your claim for Canadian EI benefits online

If you are residing in the United States and claiming regular benefits you must be available and actively seeking work and, most importantly, you must provide proof that you are legally authorized to work in the United States. You will also need to submit your Record of Employment from your Canadian employer.

If your employers issue ROEs in paper format, you will need to submit your ROEs from all your Canadian employers who issued ROEs in paper format in the last 52 weeks. However, if your employer submits your ROE to Service Canada electronically, you do not need to submit a copy of your ROE to Service Canada, since we will have received it from your employer. On the same day your employer submits it, you will be able to view and print copies of your ROE online using My Service Canada Account 

If you are residing outside Canada in a country other than the United States, you may be eligible for maternity, parental or compassionate care benefits only.  Regular benefits are not payable to a person residing in a country other than Canada or the United States.

All claims received from people residing outside of Canada are processed by the office in Belleville, Ontario. For more information, please call the toll-free number 1 877 486-1650.

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Residents of the United States    

Regular benefits:

If you are living in the United States, Regular benefits can be paid to you up to a maximum of 36 weeks. The number of weeks payable is based on the number of insurable hours that you have accumulated in Canada during the last 52 weeks or since your last claim.

To be eligible for regular benefits you must show that you:

The number of hours required is based on the regional rate of unemployment in the economic region where you last worked in Canada.

Particular situations : Effective December 11, 2005, if you are living in one of the 23 participating economic regions, you could qualify for regular benefits with a minimum of 840 hours instead of 910 hours. To know more...

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Number of hours of insurable employment Number of weeks of benefits

420 - 489

10

490 - 559

11

560 - 629

12

630 - 699

13

700 - 769

14

770 - 839

15

840 - 909

16

910 - 979

17

980 - 1049

18

1050 - 1119

19

1120 - 1189

20

1190 - 1259

21

1260 - 1329

22

1330 - 1399

23

1400 - 1434

24

1435 - 1469

25

1470 - 1504

26

1505 - 1539

27

1540 - 1574

28

1575 - 1609

29

1610 - 1644

30

1645 - 1679

31

1680 - 1714

32

1715 - 1749

33

1750 - 1784

34

1785 - 1819

35

1820 and more

36

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Maternity, parental, sickness and compassionate care benefits    

Maternity, parental, sickness and compassionate care benefits can be paid to you if you are living in the United States as long as you meet the requirements for these benefits.

To be eligible for maternityparental, sickness or compassionate care benefits you must show that you:

You may file your claim for Canadian EI maternity, parental, sickness and compassionate care benefits online. For more information, please call the toll-free number : 1 800 206-7218 .

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Canadian government and Armed Forces personnel posted in the United States    

You may be entitled to regular, maternity, parental, sickness and compassionate care benefits if you or your dependants are posted in the United States and working for the Canadian government or for the Armed Forces. Dependants include your spouse, unmarried children under 21, unmarried full-time students under 25, and unmarried disabled children.

You may file your claim for Canadian EI benefits online. For more information, please call the toll-free number : 1 800 206-7218 .

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Your permanent residence is in a country other than Canada and the United States          

If you are permanently residing in a country other than Canada or the United States, you may be eligible for maternity, parental & sickness and compassionate care benefits if you have worked in a job in your country of residence that is insurable under Canada's EI program. 

For example, you may be a spouse of a member of the Canadian Armed Forces and working abroad for the Canadian government. If you become ill and are unable to work, you can apply for sickness benefits if you meet the requirements.

You may file a claim for Canadian EI maternity, parental, sickness or compassionate care benefits online. For more information, please call the toll-free number 1  800 206-7218 or write to the following address:

Service Canada  Centre
Sub-Unit of interstate claim processing
1 North Front St. 
P.O. Box 4800
Belleville, Ontario
K8N 5E2

If you normally reside outside Canada or the United States and your last employment was in Canada, you are eligible for maternity, parental or compassionate care benefits only.

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You are a commuter    

Commuters are Canadian or American persons who regularly cross the Canada/United States border between their residence and workplace.

If you are an American living near the Canadian border and you usually commute to Canada to work, you must file a claim for Canadian EI benefits at the nearest Service Canada Centre. Your claim will be treated like that of any resident of Canada, therefore, you may be entitled to receive regular benefits or maternity, parental & sickness or compassionate care benefits.

As well, if you are a Canadian living near the American border and you usually commute to the United States to work, you must file a claim for American Unemployment Insurance benefits at the nearest "State Workforce Development Agency".


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The usual disclaimers etc from david ingram

Canadian-USA-Global tax help - david ingram expert US CANADA cross border non-resident income tax help and preparation by five tax experts with years of experience with Divorce, Real Estate and Mutual Fund investment matters for Canada, Panama, America and other cross border real estate and investment decisions such as for mutual funds, ETF's, etc.









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