TN Status & Taxation

Hi everyone!

I'm a Canadian citizen that moved to the United States on TN status on Sept 29, 2007. I know I have to file a tax return for both Canada and the United States for the 2007 tax year.

In Canada, am I a deemed resident or a non-resident? I was leaning towards non-resident, as I don't have a permanent residence in Canada, and only have a bank account / RRSP as financial ties to the country. However, in looking at Revenue Canada's dense category descriptions, as my move was only three months ago, I was therefor living and working in Canada for over 183 days during the 2007 tax year. Am I a deemed resident then?

Thanks!
Melissa

same issue when we came down - you are a non resident if you have no home there (own property)

Residency in Canada for tax purposes is only 90 days actually, so yes, you were resident for tax purposes in the 2007 tax year.

You really need to talk to an accountant, but I think the trick here is to claim a closer association to Canada for the whole year, so you file a 1040NR and an 8840 for 2007 and you pay tax to Revenue Canada. For 2008 you do it in reverse, non-resident in Canada and resident in the US.

Otherwise you're going to be paying tax to two different places for 2007, which could get complex. But it depends on your specific circumstances. If you've changed jobs, have a T-4 and a W-2 (i.e. paid witholding in the US), self-employed, etc., you need an accountant or thoroughly read up on it on the Revenue Canada site and www.irs.gov

For example it might be simpler to do two tax returns, based on your T-4 for Canada on your T-1 and your W-2 on your 1040NR.

The instructions for the 1040NR are pretty comprehensive, they explain the tax treaty provisions you can claim.

You need to inform your bank in Canada that you are no longer resident in Canada and get your address changed to a US address - if you don't they will file a T-5 with Revenue Canada and they will take that as proof of residency in Canada. As soon as you become non-resident, your RRSP and bank interest will be subject to Part VIII tax, which means 10% tax on all income from those sources.

Thanks all. Thankfully, I found an accountant that's also a CPA who will be filing both my Canadian and US taxes for me.

Thanks all. Thankfully, I found an accountant that's also a CPA who will be filing both my Canadian and US taxes for me.

Hey, if the guy's in the GTA area do you mind forwarding me his info, I'm in a similar situation, need someone to hlep me file my US and Canadian taxes, thanks.

www.serbinski.com - I used that guy once a few years back, he seemed to know what he was doing.

I know I'm reviving an old thread, but I'm looking for help on a similar situation. I think I've already been subject to dual taxation, and would like to avoid it going forward.

I am a Canadian citizen, with a TN working in the US. I worked a very small amount in 2007--just got the job in November. I received a dividend in Canada ~ 2/3 of my total income, the rest coming from my US employer. I know that the US firm considers me a US resident for tax purposes--they require me to have a residence etc...However, my husband is still completing his graduate work in Canada. So, I maintain a house and bank account there.

I filed a US and Canadian tax return. I have a fairly large education tax credit, but had to to use a chunk of my to avoid paying Canadian taxes. I thought that I should only be subject to the higher tax rate of the two countries? Is that correct? How do the two returns get reconciled? Is there an additional form to submit? To top it off, my Canadian return has still yet to be processed. I'm thinking since it has a zero balance, and is somewhat complex, it is sitting at the bottom of the to do pile.

Anyone know a good US-Canada tax accountant in the Waterloo region???

Basically your question is answered in my original posts above.

You mustn't file a 1040 in the US, you file a 1040NR and 8840 for 2008 and a T1 and claim a foreign tax credit for the US taxes, so effectively you end up paying the same amount as if you still lived in Canada.

For 2007 you basically do the same thing.

Read: http://www.cra-arc.gc.ca/E/pub/tg/p151/README.html

and IRS publication 519.

Hi,
I have a little bit different situation. My wife got an 1 year research offer in USA (J-1). My Canadian company got me an TN visa since they do business in USA as well in order to accomadate my familiy situation.

I am mostly residing in California (more than 183 days) and I am working remotely to Canada (I rarely visit my office in Canada 2-3 times a year). My payroll, benefits has not been changed. I am still on Canadian payroll and all the taxes are being paid to CRA upfront.

My question is can I avoid paying taxes to IRS by claiming that I am a non resident to USA (by claiming that I am a Canadian resident) according to the USA-Canada tax treaty Article IV?

Also can I avoid paying California state tax on my foriegn income? If I can't can I get a foriegn tax credit from CRA for the California state taxes that I am going to pay?

Thanks in advance.