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As an American living in Canada I have some stocks in a US account and they paid dividends this year. On the 1099DIV there are values for boxes:

  • 1a. Total Ordinary Dividends
  • 1b. Qualified Dividends
    1. Foreign Tax Paid
    1. Exempt Interest Dividends

How are these treated by the CRA?

  • Should boxes 1a and 1b are summed and entered as Foreign Slips for Investment income that was not reported?
  • Would Box 6 be the Foreign Tax Paid on the CRA form still?
  • Is there anything special to do with Exempt Interest Dividends?
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IMPORTANT NOTE: Total Ordinary Dividends (Box 1a) includes Qualified Dividends (Box 1b). So don't sum them. Your income for Canadian tax purposes is the Total Ordinary Dividends only.

Qualified dividends are singled in the US out so that they can be taxed at the lower capital gains rate, but for Canadian tax purposes qualified dividends receive no special treatment.

If you show an amount in Foreign Tax Paid (Box 6), identify that amount within your statement and find the fund that paid the taxes. This tax was paid by you, but via a Regulated Investment Company. You have no idea what country they paid, so the IRS and the CRA accept that as a de facto country. You enter RIC as the country paid. Say box 6 says $23USD. Search for that $23 as a debit. The report should show the fund paying the tax and the earnings from that fund. Let's assume you find fund FTRIC that paid out $723, giving you a net income from FTRIC of $700 after the foreign tax ($23) shown in box 6. You create a foreign slip where country would be RIC, your income $723, and your foreign tax paid $23.

I don't know anything about Exempt Interest Dividends. Hope the above helps you, though.

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