IRS Publication 597

DEFINITION of 'IRS Publication 597'

A document published by the Internal Revenue Service (IRS) that provides information on the income tax treaty between the United States and Canada. The treaty was signed in 1980 and is intended to streamline the process of paying tax on income generated in Canada. Citizens of the United States may be exempt from Canadian income tax if the income received for services is less than C$10,000 (rules are different for entertainers), if the U.S. citizen was present in Canada for less than 183 days over the past year, or if the income is paid by the United States.

BREAKING DOWN 'IRS Publication 597'

IRS Publication 597 does not get into specific details regarding Canadian income tax laws or Canada's treatment of the treaty. It is designed to give the U.S. perspective of the treaty, and to inform U.S. citizens that they might be liable for income tax to Canada.


Without a treaty in place, it is likely that U.S. citizens earning income from Canada would pay higher taxes.

RELATED TERMS
  1. IRS Publication 901

    A document published by the Internal Revenue Service (IRS) that ...
  2. Tax Treaty

    A bilateral agreement made by two countries to resolve issues ...
  3. Maastricht Treaty

    A treaty that is responsible for the creation of the European ...
  4. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. ...
  5. Second Surplus

    A proportional reinsurance treaty that provides coverage above ...
  6. Bank Of Canada - BOC

    The central bank of Canada, that came into existence after the ...
Related Articles
  1. Investing

    What Taxes Do I Owe On Retirement Accounts Abroad?

    If you're a U.S. retiree, but previously worked abroad, here's what you need to know about taxes on foreign pensions and retirement accounts.
  2. Markets

    3 Reasons Canada's Economy Matters in 2016

    Discover why Canada's 2015 recession matters and why the United States is particularly dependent on a healthy Canadian economy.
  3. Trading

    The Canadian Dollar: What Every Forex Trader Needs To Know

    Canada is becoming an increasingly viable alternative to the U.S. dollar, making it more important in the forex market.
  4. Personal Finance

    Understanding Income Tax

    Income tax is a levy many governments place on revenue of entities within their jurisdiction.
  5. Personal Finance

    3 Federal Income Tax Facts You Didn't Know

    Learn about three federal income tax facts that most Americans may not know from one of the most trusted financial resources on the Web.
  6. Financial Advisor

    Advisors: Don’t Overlook This Foreign Dividend Tax

    Paying income tax on income earned from foreign investments can be a tricky proposition. Here's what advisors and their clients need to know.
  7. Markets

    The Canadian Economy, At A Glance

    The 12 economic indicators described here together provide a comprehensive picture of the state of the Canadian economy.
  8. Personal Finance

    Paying Uncle Sam: From Tobacco To $1 Trillion

    The services we rely on, like education, law and security, were built on taxes.
  9. Markets

    Brexit: Would the Swiss Model Work?

    Learn how the Swiss model would work for the UK after Brexit.
  10. Personal Finance

    How Are Capital Gains And Dividends Taxed Differently?

    Individuals in the 25% or higher tax bracket pay a 20% tax on long-term capital gains.
RELATED FAQS
  1. Can the government tax your capital gains from other countries?

    Learn more about how capital gains earned in foreign countries are treated by the IRS. Discover examples of special tax situations ... Read Answer >>
  2. Is Canada a developed country?

    Find out how Canada fares as a developed country, boosted by its economic strength and a strong standard of living for Canadian ... Read Answer >>
  3. How does the landscape of the financial services sector in the U.S. compare to Canada?

    Read about the financial services sector in the United States and Canada, two countries that represent each other's largest ... Read Answer >>
  4. What is the difference between a state income tax and a federal income tax?

    Learn the difference between state income tax and federal income tax based on tax rates, deductions, tax credits and taxable ... Read Answer >>
  5. What are the tax incentives or disincentives to vertical integration?

    Merging companies through vertical integration can provide companies in the United States with a marginally advantageous ... Read Answer >>
  6. What is the difference in tax liability between gross income and other kinds of income?

    Find out how the U.S. government taxes worker's earnings, whether it is gross income or income exempted or excluded from ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center