Michigan Michigan Resident Credit for Tax Imposed by a Canadian Province (OBSOLETE)

Michigan Resident Credit for Tax Imposed by a Canadian Province (OBSOLETE)
777, 2018 Michigan Resident Credit for Tax Imposed by a Canadian Province
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Michigan Department of Treasury
777 (Rev. 01-19)

2018 MICHIGAN Resident Credit for Tax Imposed by a Canadian Province
Issued under authority of Public Act 281 of 1967, as amended. Include with MI-1040. Type or print in blue or black ink.
Filer’s Name(s) as shown on your MI-1040 (First, Middle Initial, Last)
Filer’s Full Social Security Number
Home Address (Street, City, State, ZIP Code)

Spouse’s Full Social Security Number

PART 1: CONVERSION OF CANADIAN WAGES AND TAXES TO UNITED STATES CURRENCY
1.
2.
3.
4.
5.
6.

Canadian income taxed by Michigan............................................................
1.
00
Fringe benefits included in Box 14 of the T-4, not taxable in U.S..................
2.
00
Subtract line 2 from line 1..............................................................................
3.
00
Multiply line 3 by the conversion rate of 77.18% (0.7718) (see inst.)......................................................
Total Canadian income from line 150 of your Canadian income tax return..
5.
00
Multiply line 5 by the conversion rate of 77.18% (0.7718) .......................................................................
Divide line 4 by line 6 (percentage of Canadian income taxed by Michigan
to total Canadian income)........................................................................................................................
Multiply the Canadian federal tax (line 420 of Canadian return)
$__________________by the conversion rate of 77.18% (0.7718) ............
8.
00
Multiply line 8 by line 7.............................................................................................................................
Multiply the provincial tax (line 428 of Canadian return)
$_____________ by the conversion rate of 77.18% (0.7718) ..................... 10.
00
Multiply line 10 by line 7...........................................................................................................................
Contribution to Canadian Pension Plan from Form T-4, Boxes 16 and 17... 12.
00
Multiply line 12 by the conversion rate of 77.18% (0.7718) .....................................................................

4.

00

6.

00

7.

%

9.

00

11.

00

13.

00

14. Adjusted gross income from MI-1040, line 10..........................................................................................
15. Canadian income taxed by Michigan from line 4, above............................... 15.
00
16. U.S. adjustments to Canadian wages (from U.S. Form 1040, Schedule 1,
lines 23-35).................................................................................................... 16.
00
17. Subtract line 16 from line 15.....................................................................................................................
18. Subtract line 17 from line 14 for Michigan sourced income......................................................................
19. Additions from MI-1040, line 11................................................................................................................
20. Add lines 17, 18 and 19............................................................................................................................
21. Subtractions from MI-1040, line 13..........................................................................................................
22. Subtract line 21 from line 20 for income subject to tax.............................................................................
23. Divide line 17 by line 22 for percentage of Canadian income to
total income subject to tax............................................................................. 23.
%
24. Exemption allowance from MI-1040, line 15............................................................................................
25. Subtract line 24 from line 22 for taxable income......................................................................................
26. Multiply line 25 by the Michigan tax rate of 4.25% (0.0425).....................................................................

14.

00

17.
18.
19.
20.
21.
22.

00
00
00
00
00
00

24.
25.
26.

00
00
00

27. Multiply line 26 by line 23 for Michigan tax on Canadian province income..............................................
28. Add lines 9, 11 and 13 for total tax paid in Canada....................................... 28.
00
29. Adjustments to credit claimed on U.S. Form 1040:
29a. Canadian portion of credit, excluding carryovers, claimed on
U.S. Form 1040, Schedule 3, line 48 (see instructions)...................... 29a.
00
29b. Canadian income taxed by Michigan from all U.S. 1116 forms........... 29b.
00
29c. Gross Canadian income from all U.S. 1116 forms............................... 29c.
00
29d. Divide line 29b by line 29c and enter percentage............................... 29d.
%
29e. Multiply line 29a by line 29d for adjusted
amount claimed on U.S. Form 1040.................................................... 29e.
00
30. Subtract line 29e from line 28 for amount available for credit on MI-1040...............................................
31. Canadian provincial tax from line 11. Enter here and on MI-1040, line 18a.............................................
32. Credit for tax paid to Canadian province (lesser of lines 27, 30 or 31).
Enter here and on MI-1040, line 18b........................................................................................................

27.

00

30.
31.

00
00

32.

00

7.
8.
9.
10.
11.
12.
13.

PART 2: COMPUTATION OF MICHIGAN TAX

PART 3: ALLOWABLE CREDIT FOR TAX PAID TO CANADIAN PROVINCE(S)

INCLUDE THIS FORM WITH YOUR MI-1040 RETURN

2018 Form 777, Page 2

Instructions for Form 777
Resident Credit for Tax Imposed by a Canadian Province

You will need your U.S. Form 1040, all U.S. 1116 forms,
Canadian Federal Individual Income Tax Return and
Canadian Form T-4 to complete your Michigan Form 777.
Include copies of all of these forms with your Form MI1040 return.
Who May Claim This Credit
To qualify for a credit using this form, you must:
•	
•	

Be a resident or part-year resident of Michigan,
Have income that was subject to income tax by both
Michigan and a Canadian province, and
•	 File a Canadian return which shows provincial tax
paid.
NOTE: The surtax for individuals who are not residents of
Canada may not be used to compute a Michigan tax credit.
If your Canadian return submitted with your MI-1040
return does not show provincial tax, you do not qualify for
a Michigan tax credit.
Credit Computation
The maximum credit for tax imposed by a Canadian
province is the smaller of:
•	 Michigan tax due on the Canadian income, or
• 	 The provincial tax you did not claim for credit on your
U.S. Form 1040.
Credit is not allowed for:
• 	 Canadian provincial tax unused in prior years but
carried over to your 2018 U.S. Form 1116.
• 	 Canadian provincial tax unused in 2018 and claimed as
a carryover deduction to future years.
• 	 Taxes paid on income subtracted on line 13 of your
MI‑1040 (e.g., rental or business income from another
state or Canada, part-year resident wages).
• 	 Canadian federal tax, contributions to Canadian Pension
Plan, or taxes paid to any other foreign country or
subdivision of a foreign country, other than a province
of Canada.
NOTE: If you reduce your U.S. income tax by a carryover
of provincial tax, you must amend your prior year Michigan
income tax return to reduce the credit computed on that
year’s return.

Conversion Rate
The conversion rate used on this form for the 2018 tax year
is the conversion rate of 77.18% (0.7718).
If you used a conversion rate on your 2018 U.S. Form 1116
other than 77.18%, replace the rate in Part 1 of this form
with the rate used on your 2018 U.S. Form 1116.
Line-by-Line Instructions
Lines not listed are explained on the form.
Line 1: Enter your Canadian income taxable by Michigan.
This includes, but is not limited to, salaries, wages,
commissions and other employment income.
Part-year residents: Compensation reported on this line may
include only the portion earned while a Michigan resident.
Line 2: If box 14 of Canadian Form T-4 includes fringe
benefits reported in your U.S. adjusted gross income (AGI),
reduce the amount in box 14 by the fringe benefits amount
included in AGI on your U.S. Form 1040. Note: This
reduction must be accompanied by verification from your
employer.
Line 12: Enter contributions to a Canadian Pension Plan
from boxes 16 and 17 on the Canadian Form T-4 (maximum
of $2,593.80) or from line 421 of the Canadian return.
Part-year residents must prorate the amount on this line.
Divide Canadian salaries and wages earned as a Michigan
resident by total Canadian salaries and wages earned. Then
multiply the total contribution from boxes 16 and 17 by the
resulting percentage.
Line 13: Multiply line 12 by 77.18% (0.7718) and enter the
result.
Line 15: Enter your Canadian income from line 4.
Note: Interest and dividends from Canada received by a
Michigan resident are taxable by Michigan as Michigan
sourced income.
Line 29a: Enter the portion of the U.S. foreign tax credit
reported on U.S. Form 1040, Schedule 3, line 48 that is
based on Canadian federal tax, Canadian provincial tax,
and contributions to Canadian Pension Plan paid or accrued
in 2018. The amount entered must not include the portion
of the U.S. credit attributable to carryover of prior year tax
and must not include Canadian taxes carried over to a year
after 2018. In computing the U.S. credit, it is presumed the
Canadian federal income tax is claimed first.