Residence Requirements for Canadian Citizens for tax purpose

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

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.

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!

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.

Hi there, we've just posted a video with Arun (Ernie) Nagratha from Trowbridge discussing residence & non residence issues and the tax implications. The video was filmed in Hong Kong but the principles are applicable regardless of where Canadians are living.

We think you will find this useful.

http://www.youtube.com/watch?v=Mq4T3hYMQ4A

Allan