U.S. citizens must file based on worldwide income and can use the earned income exclusion or foreign tax credits for taxes paid to Canada to avoid double taxation.

Earned Income Exclusion

The foreign earned income exclusion allows a bona fide resident of Canada or must be living in Canada for at least 330 days out of the last 12 months to exclude foreign earned income (T4 or self-employment income) on their U.S. return.

Foreign Tax Credit

Another way to avoid double taxation is by claiming a foreign tax credit on Form 1116 of your U.S. return for taxes you pay to Canada. Foreign tax credits can be carried forward for ten years.

Social Security

If you are a Canadian citizen and resident, and receive Social Security benefits from the U.S., these benefits are taxable only in Canada. If you are a Canadian resident but a U.S. citizen receiving U.S. social security benefits they are excluded on your U.S. return and taxable on your Canadian return.