183 Days ... what now?

I'm a Canadian, not working, who has visited the US a total of 62 days in 2010 and 163 days (so far) in 2011. I was not working in 2010 or 2011. And my time in the US was just visiting. However, there was some residual income (termination - severance - complicated) from my former Canadian employer credited to me in the year 2011.

I knew about a 183 day deadline - but I didn't know about adding previous years visits. This new *information* brings my total days visiting the US for the purpose of "presence" to 183 -184 days. Oh boy...

So I'm guessing I have to file an income tax return in the US now. Are US taxes assessed on income earned while visiting the US?

If not, how do tax treaties work .. I pray I don't get taxed twice on this income.

Cheers,

MW

Not to worry. As long as you can prove ties in canada sufficient to make you tax resident ther. You merely file a 1040NR with an explanation that -- by treaty -- you are still Cdn tax resident.

1040NR only requires reporting of US-sourced income. Since you ahve none, no UZS tax is possible.

I'll give more details at forums.serbinski.com if you wish.

Just file an IRS form 8840, that's what the form is for, it eliminates the ordinary substantial presence test and sets it to 183 days. You don't have to file the 2011 one until April of next year. 2010 won't matter because you weren't there for 183 days that year and it will be 183 days total for this year, problem solved. Just remember to file the form.

8840 does not work in you exceed 183 days, that is pretty clear on the form. Steven's undersatnding of the purpose of the form is incorrect. It does not reset anything.

8840 is if you met SPT but not 183 day in year. Once can do this by consitently spending 5 months per year in US, for example.

1040NR and 8833 is the only correct method in you exceed 183 days.

What he seems to be saying is that he's over 183 days using the substantial presence test, Form 8840 does eliminate the substantial presence test.

but I didn't know about adding previous years visits

If you file Form 8840 it basically means 183 days a year before you have to worry about it. Even then, you can file Form 8833 and claim you reside in Canada under Article 4 of the tax treaty.

If he's got 62 days last year and 160 odd days this year, filing an 8840 next year is all he has to do.

Yes, IF he does not stay 183 days in any calendar year.
Just to clarify, 8840 does not override the SPT (nor does it override the neend to file 1040NR), it merely allows on who has met SPT (by the 3-year calculation) to avoid becoming a US tax resident, if they have not stayed in US for 183 days in that calendar year.