Residence Requirements for Canadian Citizens for tax purpose

saikrishna
Junior Member



Joined: 22 Apr 2007
Posts: 22
Location: U.S.

Posted: Sun Apr 22, 2007 5:03 pm

 

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Hello Dear fellow Canadians:

Tax season is about to get over. I am on TN visa here in the U.S. and was wondering about the residency requirements for the TAX purposes. Before TN, I was on F1 status for 2 years and last year, CRA queried about my residency. So, can anyone help how to handle this situation.

Of course, as on TN, we're not considered Resident Alien here in the U.S. Look forward for your kind advice. Thanks a lot.

SaiKrishna
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Reba
Moderator


Canuck in NC

Joined: 16 Jul 2004
Posts: 1505
Location: North Carolina

Posted: Mon Apr 23, 2007 3:10 am

 

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get yourself a copy of a book called The Border Guide.

I honestly don't know for tax purposes what you as a TN have to do. I myself am married to an American and live in the US as a permanent resident. My last year of taxes with Canada I notified them that I had left Canada permanently, so I'm no longer required to file with them. I do think though that because you are in the US temporarily that you still need to file your taxes in Canada and report your income that you're making in the US.

There is a tax treaty between Caanda and the US so you probably won't have to pay anything more to Canada, but you still do have to report.
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READ ME FIRST!! Immigration Information for Canadians who want to move to the US for any reason.

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olsonbeast
New Member



Joined: 24 Feb 2008
Posts: 5

Posted: Sun Feb 24, 2008 4:51 am

 

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I have recently had an article published in Canadian Money Saver on this topic. Please google "lifeisgrand tax" and you'll find it. Best of luck!
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Steven
CanuckAbroad VIP



Joined: 28 Sep 2007
Posts: 1676
Location: Calgary

Posted: Sun Feb 24, 2008 10:26 pm

 

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Residency for tax purposes in Canada is 90 days. However, there have been a multitude of court cases about it and the CRA can also consider you resident if you have a substantial presence in Canada, i.e. driver's licence, premises, that sort of thing.

If you plan on being in the US for multiple years you're probably better off severing ties with Canada for tax purposes, there is a whole section on the CRA website about non-residency. Look at Form NR73.

If you don't want to do it or it's impractical, you can claim a closer association to Canada via IRS Form 8840 when you file your 1040NR. This is the better option if you plan on moving back anytime soon. If you leave Canada permanently for tax purposes, you become subject to the capital gains tax if you resided in Canada for more than 5 years before you left, you need to consider that one also.

My personal feeling on this one is that you need to be very careful about it if you are there on a work permit, because if you lose your job, you will have to move back to Canada presumably. That will create an awfully sticky tax situation, so plan ahead and figure out exactly what your future plans are.
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Steve.

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