# Entering US dividends into Turbotax Foreign Slip



## gibor365 (Apr 1, 2011)

US form T1042S indicates dividends received form US corp... On Turbotax , when entering Foreign slip, there are 2 different boxes: 
Investment income exempt under a tax treaty and Investment income. What is the difference between them and where dividend amount from T1042S to be entered?
.


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## gibor365 (Apr 1, 2011)

It's so confusing.... search Turbotax for T1042S and they write:


> Are you Canadian?
> 
> 
> You may very well not need to do anything with the 1042-S when filing your Canadian tax return.


I'm now on online help with Turbotax fro 1 hour! Looks like they have no idea about this issue... Just surprised how Candaians for many decades tolerate this tax filing stupidy ....


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## Spudd (Oct 11, 2011)

I checked what I did in UFile last year. I used "Investment Income" and ignored the tax treaty one. When I click on the help for the tax treaty field, it talks about receiving social security benefits and that sort of thing, so I think that one is only for special cases.


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## gibor365 (Apr 1, 2011)

After about 2 hours discussion on live chat with turbotax, they told to enter it into "Investment income exempt under a tax treaty " ... Spudd, how it can be "social security benefits and that sort of thing" if it says *Investment * Income exempt?!


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## Eclectic12 (Oct 20, 2010)

I'm not sure this is correct as the IRS web site seems to be saying that the form is for income that is subject to US withholding taxes.



> Forms 1042-S, *Foreign Person's U.S. Source Income Subject to Withholding*, to the Internal Revenue Service


http://www.irs.gov/Individuals/Inte...nnual-Summary-and-Transmittal-of-Forms-1042-S


I'm not sure if this helps or not but it does talk about Canadian's filing taxes.
https://support.turbotax.intuit.ca/.../INF19541.html?locale=en-ca&view=GBD_TURBOTAX


If it does indicate the taxes withheld, you might need it to claim the FTC.

Cheers

*PS*

Though I do wonder why you've received one as the IRS link Turbotax gives says:

"Form 1042-S reports taxable federal income and the corresponding federal tax withholding relating to the following types of income received by U.S. nonresidents: 
•	Wage payments made to employees who have claimed tax treaty benefits 
•	Tax reportable Fellowship/Scholarship income 
•	Service payments made to independent contractors for work performed in the U.S. 
•	Royalty payments issued to individuals or entities. 
•	Non-employee Prize or Award payments "

It does not seem to be mentioning dividends from a US corp at all.


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## gibor365 (Apr 1, 2011)

> If it does indicate the taxes withheld, you might need it to claim the FTC.


 Yes, it indicates withheld tax... But i cannot claim in Turbotax Foreigh tax credit directly..... it should be calclulated automatically depends on box where amount is entered.... maybe if I enter it in box "Investment income exempt under a tax treaty " FTC will be calclulated automatically? 


> I'm not sure if this helps


 Not useful at all  as they say _You may very well not need to do anything with the 1042-S when filing your Canadian tax return_


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## gibor365 (Apr 1, 2011)

> Though I do wonder why you've received one


 Good question!
I'm just wondering if CRA can cause us trouble if we entering this amount into wrong box (even though i have impression that no one really knows where exactly it should be entered )


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## Spudd (Oct 11, 2011)

Mine was dividends from a US company that I worked for (ESPP). I entered it into the box I mentioned above, and have done the same for many years, CRA never complained.


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## CPA Candidate (Dec 15, 2013)

US dividends are certainly not exempt under a tax treaty. The value of the dividend, including the withheld portion, should be reported as income. Then you will get a FTC for the tax you paid to the US.


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## gibor365 (Apr 1, 2011)

Just curious what can be "Investment income exempt under a tax treaty "?
p.S. Looks like Turbotax online advisors know nothing


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## gibor365 (Apr 1, 2011)

> Non-employee Prize or Award payments "


 maybe it's considered as Award payment? This is actually what it was....


> Mine was dividends from a US company that I worked for (ESPP)


 could you please tell what tax form you are getting?


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## Spudd (Oct 11, 2011)

It was the same as yours - 1042-S.


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