What would this "income" be listed under? It's not unemployment. It's money given to families with kids a certain age. It is taxed in Canada. Would I just list it under my regular income (wages, salaries, tips ect) as it being an "ect."? What I mean is, I can't figure out where to include it on the 1040. Thanks!

Easiest is probably "Other income" - line 21. This is also the same line you put your FEIE credit (in parentheses) on, so you may want to attach a little schedule showing something like:

Line 21 form 2555 (43,350) (or however much your FEIE works out to be)
Canada Universal Child Care Benefits 5,000 (or however much)

Total reported line 21: (38,350) or whatever the net of your negative FEIE and your positive benefits winds up being.

Cheers,
Bev

Thanks Bev....wait for it wait for it....THAT MAKES SENSE! WOoohoo! I'm going to figure this out if its the last thing I do. heh


Btw, you're help is amazing. I really appreciate it.

this cannot be right. I'm being taxed on my child benefits in Canada...and I'm being taxed on my EI benefits in Canada, yet I can't included them into my FEIE? That means I'm going to get double taxed on them....what am I missing?

It depends - if your exemption and standard deduction cover the amount of your child benefits, your "taxable income" will still wind up as -0- (on the flip side of the 1040 form) and you won't pay tax on them. (If you're receiving child benefit in Canada, you may well qualify to file as "Head of Household" which gives you a larger personal exemption and standard deduction. The child, however, will need a US social security number if you are going to claim him or her.)

If that's not the case, then you break out the form 1116 and claim a tax credit for the tax paid on your child care benefit against whatever tax you may have incurred on the 1040.

It's a bit of a game, but it usually turns out ok in the end.
Cheers,
Bev

I make very little money, I'm under 20K for a family of 5...the year I'm talking about, I was on EI for mat leave, I was getting a child benefit check, I had a very small amount of babysitting money, and I had employment income. The FEIE is not covering the child benefit or the Mat Leave EI...and I do form 1116 and it's not covering it all either! How can it be that I make so little but still owe the US govt money when I haven't lived there since 1998!! I'm furious and I don't know what I'm doing wrong I have wasted so much time on this, hours and hours I could be spending being a mother to my kids.

SO, for head of household, my husband and I pay out of the same pool. We put all our money in a bank account and I pay the bills from there. It's impossible to tell or say that I paid half of maintaining our home. There is no record of that saying my money goes here, his money goes there. He makes more money than I do, as well.

OH wait a minute. I may have found my mistake. ON form 1040 39b it asks if you were a dual status alien...I misunderstood it as meaning dual citizen. OH MY GOSH...so I wasn't taking that additional 5350.00 standard deduction along with my exemption for myself and my son of 3400 each. Good grief.

It is easy to get confused! It was all worth it though when 4 months later I got the results of the 5 years of returns and the IRS accepted mine as submitted - i.e., I did not have to pay a fancy accountant.

If I remember correctly, I was also able to deduct the EI premiums I paid from the EI income.

The only year where I had to scramble to find deductions was my lowest income year. My guess is that while Canadians do pay higher taxes we get more breaks at the lower income levels. Really sad commentary to me given how little many wealthy US citizens and corporations pay in taxes.

that was exactly my issues a few yrs Peg! My income for a few yrs was mostly due to EI maternity benefits and a child benefit here and so I had to end up taking an exemption for my oldest son (who has a SSI # from when he was a baby).

I JUST finished from 2003 to 20011 and it appears I owe nothing! Well aside from a self employment tax which I'm sure I can be exempted for under the Totalization Treaty between Canada and US since I paid into the CPP system up here the entire time. *fingers crossed that Revenue Canada gives that to me*


Question though. I have SOOOO many scribbles out and chicken scratches on these forms. Is it ok to send them like that or should I go back through and redo them on new form to make them "pretty" or not bother?