How to Claim the Canadian Overseas Employment Tax Credit
The overseas employment tax credit may be available to you if you’re a Canadian resident but worked abroad for six months or longer in connection with a resource, construction, installation, agricultural, or engineering project. Your employer must complete and sign form T626, “Overseas Employment Tax Credit.” If you qualify, you’ll find that some (and maybe most!) of your overseas income is exempt from tax in Canada.
Calculate the credit amount on form T626 and then carry it to line 426 of schedule 1.
If you have severed your ties with Canada and become a non-resident, you will not be eligible for the credit because your income as a non-resident generally will not be taxable in Canada.