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International Tax, Cross-Border and Expatriate Tax Expert
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How can the US avoid double taxation in Canada?

Hi Mohammad, I’m paying double taxes for the US and Canada. It’s been 2 years and it takes away my major financial part. Is there any way to avoid double taxation while living in Canada?

You can avoid double taxation by using foreign tax credit (FTC) or foreign earned income inclusion (FEIE). The foreign earned income exclusion (FEIE) comes with a purpose to give relief from double taxation. It excludes the income you’ve taxed in another country.

The foreign tax credit allows you to take credit of the tax paid in a foreign country on foreign income earned from the respected country. Please note that IRS cannot refund any unused FTC.

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