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If you live in Canada and earn money from the United States, Canada taxes all of it. The CRA says a factual resident pays tax on world income, from sources inside and outside Canada. A Canada US tax accountant handles the second half of the job: working out whether the US also wants a return, and making sure the same income isn’t taxed twice.
We can’t recommend a firm or quote a fee. What we can do is lay out the rules that tell you if cross-border help is worth paying for.
Do I owe tax in both countries?
Possibly, but you shouldn’t pay full tax twice. Canada gives a foreign tax credit when you report foreign income on your Canadian return and paid tax on it abroad. You claim the lower of two amounts: the foreign income tax you actually paid, or the Canadian tax on your net income from that country. The CRA adds that a tax treaty may affect your eligibility.
The federal calculation goes on Form T2209. The provincial or territorial part uses Form T2036, except in Quebec. Filing on paper with US-source income? The CRA asks for your W-2 information, your US 1040 and your US tax account transcript.
Does the US want a return from me?
That’s a question for the IRS, and the CRA says so itself: work out if you count as a resident alien or a non-resident alien of the US, then check the IRS rules. US citizens and resident aliens living abroad are a separate case. The IRS gives them an automatic two month extension, which moves a calendar year return from April 15 to June 15.
The extension doesn’t stop interest. Tax not paid by April 15 still collects interest until you pay it. This is where a cross-border accountant earns their fee, because both countries have their own dates and forms.
What foreign property do I have to report to the CRA?
Income from foreign property always goes on your Canadian return. Separately, Form T1135 is required when specified foreign property cost more than $100,000 at any time in the year. If you crossed the line, every such property held that year gets reported, even one you sold before year end. Foreign shares and US rental property are the usual questions, so check the CRA’s definition for yours.
| Cost of specified foreign property | T1135 reporting |
|---|---|
| $100,000 or less all year | No form required |
| Over $100,000 but under $250,000 all year | Part A, the simpler method |
| $250,000 or more at any time | Part B, with details for each property |
The test is on cost, not market value. Some items are excluded from the definition, and we haven’t reviewed that list.
How much Canadian tax are we talking about?
A quick example puts the credit limit in context. On $85,000 of income in Ontario, the income tax calculator shows $15,551.05 of federal and Ontario tax, an average rate of 18.3%. The credit is capped by the Canadian tax on the US part of that income alone. Enter only the US portion into the calculator and you’ll see roughly where that ceiling sits.
Different income types behave differently. The dividend tax calculator shows the Canadian side of dividend income. The capital gains tax calculator covers a US property or share sale, and the rental income tax calculator handles a US rental. None of these models a foreign tax credit, so use them for the Canadian side only.
Common mistakes and limits
People report US income in US dollars and forget to convert it for the Canadian return. We didn’t confirm the exchange rate rules here, so check the CRA’s guidance before you file.
Others assume the treaty makes the problem disappear. It can change who taxes what, but the CRA’s own wording is that it “may affect” credit eligibility. And there is the T1135, skipped because the income was small. The threshold is about cost, not income.
Your Canadian return is due on the normal dates, and a balance owing is due by 30 April. If you’re self-employed, filing is later but payment isn’t.
Where the numbers come from
The foreign tax credit rules, T1135 thresholds and residency wording come from the Canada Revenue Agency’s pages on the federal foreign tax credit, Form T1135 and Canadian residents going south, read in September 2026. US extension details come from the Internal Revenue Service. Tax amounts in the example come from this site’s calculators, using 2026 data. This site has no link with any government.
Frequently asked questions
Does Canada tax my US income?
Yes, if you are a factual resident. The CRA says you pay Canadian tax on world income, from inside and outside Canada.
What is the foreign tax credit?
It lowers Canadian tax by US tax you paid on the same income. You can claim the lower of the foreign tax paid and the Canadian tax on that income.
When do I file Form T1135?
When specified foreign property cost more than $100,000 at any time in the year. Part A is used below $250,000 and Part B from $250,000.
Do US citizens in Canada file in both countries?
The IRS gives citizens living abroad an automatic two month extension, so you should check the IRS rules. Interest still runs from the regular due date.
How much does a cross-border accountant cost?
We couldn't confirm fee levels from any official source. Ask for a written quote and a list of what it covers.
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.