Taxation of US Actor on Canada Income

Technical topics regarding tax preparation.
#1
Posts:
148
Joined:
20-May-2014 3:08pm
Location:
Canton, GA
My client is a US actor that did work in Canada through her S-Corp. The S-Corp received the acting income and residuals. I have questions as to filing requirements in CA, the CA withholding tax, and US foreign tax credit. If you have experience, I hope you can help.

Based upon my research, I appears that CA generally withholds 23% but that the S-Corp could apply for a lower withholding amount. It also appears that the withholding amount may be applied to the income less manager & agent fees. In my client's case, manager & agent fees are 20% leaving a net of 80%. If the standard 23% were applied against the 80% net, the withholding would be 18.4%. In my client's case, CA withheld was actually 18.02% if gross income.

Questions:
1. How can I determine if the client applied for a reduced withholding rate?
2. Do you think the actual withholding of 18.02% was a reduced rate?
3. Do you think the actual withholding of 18.02% was the standard rate applied on income after commissions?
4. To claim a US foreign tax credit, are the S-corp and individual required to file CA returns?
5. Canadian returns are optional for non-resident actor when withholding is at 23%. Is this true when withholding is at a lower rate?
5. Can the individual claim a FTC based upon the withholding?
6. It appears that Canadian returns would be late if filed now. Does that prevent or negate filing CA returns?
7. If filing CA returns, does the US citizen have to report all US income to CA? Is tax payable to CA on all US income?
8. If client cannot claim a FTC, can S-Corp claim Canadian withholding as a business expense?

Any assistance is greatly appreciated.

Thanks.
 

#2
Posts:
1362
Joined:
22-Apr-2014 9:07am
Location:
Chicago, IL
Have you also tried reaching out to Canadian tax preparer(s)?

I just found this from a quick search. Perhaps as as valuable as this board is...or perhaps it is junk. Don't know...

https://www.protaxcommunity.com/

Thank you for visiting ProTaxCommunity.com 15!

This community exists as a place for accountants, bookkeepers and tax preparers to discuss topics related to Canadian tax returns. It is sponsored by Trilogy Software Inc., the makers of the TaxCycle Suite 15 of professional tax software.

You are welcome to join, whether or not you currently use TaxCycle in your practice. All are welcome
to learn, discuss, and share with one another. Topics include how to use TaxCycle, tax technical topics, EFILE, practice managements and more…
 


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