# American living in Canada



## adnaps1 (Jun 9, 2013)

I pay 22% in federal income taxes in Canada and 17.4% to the province of Manitoba for a total of 39.4%. My tax bracket in the U.S. would be 25% plus 5% for Illinois (where I last lived) for a total of 30%. I usually pay taxes in Canada and then file the foreign earned income exclusion in the U.S. Can I instead pay taxes in the U.S. at the lower rate and file a similar "foreign earned income exclusion" in Canada?


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## BBCWatcher (Dec 28, 2012)

No.


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## adnaps1 (Jun 9, 2013)

Thanks for the quick response. Does it actually say somewhere that this is not allowed? I thought it may not be allowed since it sounds too good. But I'd be interested in reading where it says something like this.


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## Nononymous (Jul 12, 2011)

adnaps1 said:


> Thanks for the quick response. Does it actually say somewhere that this is not allowed? I thought it may not be allowed since it sounds too good. But I'd be interested in reading where it says something like this.


If you are a resident of Canada, you pay tax in Canada.


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## Nononymous (Jul 12, 2011)

I don't have the energy to look up the relevant statute, but if you don't believe me, I recommend you call up the CCRA help line on Monday morning, explain to them that you are a US citizen living and working and consuming public services in Manitoba, and ask if you can pay your taxes in Illinois because it would save you 10 percent every year. I'm sure they'd be absolutely delighted to entertain the idea.


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## BBCWatcher (Dec 28, 2012)

If you want the 30% marginal tax rate then physically move to Illinois and work for employer in Illinois. If you want to live and work in Manitoba then you're a tax resident of Manitoba subject to the tax laws of Manitoba and Canada.

As a U.S. citizen or U.S. legal permanent resident you are also subject to U.S. tax laws which include the Foreign Earned Income Exclusion, Foreign Tax Credit, and a tax treaty with Canada among other provisions. The tax treaty is one document that makes abundantly clear your tax situation as a resident of Canada.


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## Bevdeforges (Nov 16, 2007)

adnaps1 said:


> Thanks for the quick response. Does it actually say somewhere that this is not allowed? I thought it may not be allowed since it sounds too good. But I'd be interested in reading where it says something like this.


It actually works the other way around. Each country's tax laws are different - and you are allowed whatever the tax laws say you are allowed. You live in Canada, you're subject to Canada's tax laws - which (if I understand correctly) do NOT have a "foreign earned income exclusion" provision. (They don't have to, since they don't tax their citizens living and working overseas.)

You pay taxes where you are "tax resident" which in your case is Canada.
Cheers,
Bev


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