CRA Requiring Transcripts of US Returns for Foreign Tax Credit

Canada Revenue Agency (CRA) has decided that all claims for Foreign Tax Credits (FTC) should come as official notices vs copies of tax returns from other countries. Effective immediately, clients will require an official Notice of Assessment from a foreign country to claim FTC. For US credits, a copy of the 1040, state return, and W2s were the only documents required. Now actual proof of filing is required in addition to the return copies.  One problem – the IRS and state tax agencies do not issue Notices of Assessments and some transcripts are not available till the summer. We will see how this plays out. The CRA is allowing proof of payment or receipt of refund along with a copy of the return.