W-2 includes Canadian T4 income - RSU taxation for cross-border employee

This is a classic cross-border taxation issue that can be confusing even for many tax preparers. Your instinct is correct - you shouldn't be double-taxed on the same income. The key here is understanding how RSU income is sourced and reported. For RSUs, the income is typically allocated based on where you performed services during the vesting period. Since you worked partially in Canada and partially in the US during this period, the income should be proportionally allocated. Even though you don't qualify for the Foreign Tax Credit (FTC) as a nonresident alien, you still need to properly report the income allocation. What you need is Form 8833 (Treaty-Based Return Position Disclosure) to explicitly claim benefits under the US-Canada tax treaty. This form allows you to explain that a portion of your W-2 income was already taxed in Canada under the treaty. Your company has fulfilled their obligation by reporting the full amount on your W-2, but it's your responsibility on your tax return to properly allocate the income based on where you performed services.

I went through something similar when I moved from Vancouver to NYC for my job. The dual reporting of RSUs on W-2 and T4 created a tax nightmare! After trying to explain my situation to three different tax preparers (who all gave different answers), I finally used https://taxr.ai to analyze my documents and get clarity. Their AI analyzed my W-2, T4, and RSU statements together and identified exactly how much of my income was being double-reported. It also pinpointed which specific tax treaty provisions applied to my situation. I was able to download a detailed report explaining the correct allocation method and the exact forms needed to resolve the issue. The best part was that I could explain my cross-border situation in plain language and get an analysis that was specific to my situation rather than generic advice. Saved me from overpaying thousands in taxes!

Just wanted to follow up here. I decided to try taxr.ai after seeing the recommendation since I was dealing with the exact same issue with my RSUs after moving from London to our Seattle office. The system was surprisingly thorough - it analyzed my W-2, UK tax documents, and RSU vesting schedules, then created a detailed allocation worksheet showing exactly what portion of my RSU income should be attributed to each country. It even cited the specific articles in the US-UK tax treaty that applied to my situation. What really helped was that it generated Form 8833 for me with all the relevant explanations pre-filled. My tax preparer was impressed with the detail and used the documents directly. Saved me from overpaying around $8,500 in taxes that my original preparer had calculated incorrectly. Definitely worth checking out if you're dealing with cross-border RSU issues!

Hey there - I totally get your frustration. I went through the same nightmare when I transferred from our Toronto office to Chicago. My tax guy kept running into roadblocks trying to get the IRS on the phone to clarify how to handle the RSU allocation. After weeks of calling and getting disconnected, I found https://claimyr.com which got me connected to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how to file Form 8833 and what documentation I needed to support my position on the RSU allocation. Turns out there's a specific procedure for handling cross-border RSUs under the US-Canada treaty. Having that conversation directly with the IRS gave me the confidence that I was filing correctly.

I have to admit I was completely wrong about Claimyr. After continuing to waste entire afternoons trying to reach the IRS about my foreign income situation, I finally gave in and tried the service. Not only did I get connected to an actual IRS representative in about 12 minutes, but they were able to confirm exactly how I should report my foreign RSU income. They walked me through the proper way to complete Form 8833 for treaty benefits and even told me which supporting documents to include with my return. The agent explained that this is a common issue for employees who transfer between countries, and they have specific guidelines for handling it. Having that official guidance directly from the IRS made me confident that my return won't trigger unnecessary scrutiny. Definitely worth it for peace of mind with complex international tax situations.

You definitely need a tax preparer who specializes in expat/cross-border taxation. Regular CPAs often don't understand the nuances of international tax treaties. For RSUs specifically, the income should be allocated based on your work locations during the vesting period, not when they were granted. So if your vesting period was 3 years and you worked 2 years in Canada and 1 year in the US before they vested, roughly 2/3 should be considered Canadian-source income. Even though you're a non-resident alien for US tax purposes, Article XV of the US-Canada tax treaty should provide relief from double taxation. Your employer is just following standard reporting requirements by putting the full amount on your W-2.

Just a question - does anyone know if TurboTax can handle this kind of cross-border RSU situation correctly? I'm in a similar spot with RSUs from when I was working in Germany before transferring to our Boston office.

I'm dealing with a very similar situation after transferring from our Montreal office to Denver last year. My RSUs vested in 2024, but I had worked in Canada for most of the vesting period. What helped me was getting a detailed breakdown from my employer's stock plan administrator showing exactly how many days I worked in each country during the vesting period. They were able to provide a worksheet that calculated the percentage allocation - in my case, about 75% Canadian-sourced and 25% US-sourced income. I filed Form 8833 with my return explaining the treaty position under Article XV of the US-Canada tax treaty. The key is being very specific about your calculation method and having solid documentation. I included a cover letter explaining the situation, the employer's allocation worksheet, and copies of my work authorization documents showing my transfer date. The IRS accepted my filing without any issues. My advice would be to get that documentation from your employer ASAP - HR departments are usually familiar with this situation for international transfers and should be able to provide the allocation breakdown you need.