Dual us/canadian citizenship

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New Member



Joined: 05 Aug 2008
Posts: 1
Location: Detroit, Mi

Posted: Tue Aug 05, 2008 10:45 am

 

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Can you be a resident of both countries? If not, is there any problem with residency say in canada and working in both countries?

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Steven
CanuckAbroad VIP



Joined: 28 Sep 2007
Posts: 1637
Location: Calgary

Posted: Tue Aug 05, 2008 10:55 am

 

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If you're a resident of both countries you would be taxed twice, so not recommended. You can be a resident of one country and have a house in the other, if that's what you're asking.

Difficult for dual citizens because basically it boils down to whether you meet the "substantial presence" test for tax purposes, which makes it hard to say, spend six months in one country and six in the other although in tax court they would take the place you have your principal residence and DL etc. as the deciding factors, usually.

You can certainly work in either country, your tax returns get complicated though. As a US citizen you always have to file a 1040 regardless of where you live for the rest of your life. If you receive income in Canada and live in the US, you have to claim a foreign tax credit in the US and file a Canadian non-resident return, T1.

If you lived in Canada and it was your principal residence, you would file a regular T1 for whatever Province you resided in and also file a 1040. There is a maximum limit on the tax credit for non-resident US citizens, which I think this year is $85,700 or thereabouts, so you would be subject to dual taxation on your Canadian income above that amount.

The IRS website has lots of info on how they work out you are "non-resident".
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Steve.

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