US/Canadian Dual Citizen wanting to Work in both

[uscanuck]

Hi
I'm a US/Canadian dual citizen who's been living and working in the states for the last 10 years. Prior to that I lived and worked in Montreal for 11 years. I would like to move back and reside and work in Montreal but wonder if I could work part-time across the border in the US. I am a professional and would likely be self-employed in both countries. I wondered if it were possible to live 4-5 days of the week in Montreal, then drive down (about a 2 hour drive) to a US city close to the US / Canadian border and live and work there for 2-3 days. I would not make the commute every day I worked in the states but would try to rent some housing for the 2-3 days of the week that I'm in the states.

I would prefer to live in Montreal full-time as I have an established social network there, but I'm concerned about my ability to build a practice given my limited French.

I have not even considered the tax issues, but wonder if you have any information at all about whether it is even possible to do this? Also, any idea of the impact of this on my Canadian health care eligibility?

[agnelson]

As long as you establish Cdn residency, and the spend less than 183 nights a year outside canada, you will maintain your RAMQ.

For taxes, you will likely end up paying tax on all your income in Canada, QC, US and your state (NY,VT but not NH) and then using foreign tax credits to reduce

[Reba]

Consult with a really good tax accountant who is familiar with both countries tax laws and the treaty between them! Otherwise you may end up paying double what you should!

[agnelson]

... or post on forums.serbinski.com and I;ll give you a more detailed answer as I have been dong for 9 years....

[Steven]

It will be complicated I'm afraid. As a US citizen you have to file a 1040 regardless of where you live. Your principal residence is Canada however and that is where your tax home is, so the Form 2555 would reflect that you live year round in Canada. But this is one of the situations for Canadians where the substantial presence test could be a significant issue because the IRS won't believe your statement that you reside in Canada if you have a residence in the US and work in the US for significant periods as you have substantial ties to both countries and are a citizen of both countries. You need to be sure you keep your Québec DL current, healthcare card etc. and anything else obvious to prove you reside in Québec.

You pay taxes where the work is performed, so from the sounds of it you need to be registered as self-employed in both countries and you would claim a foreign tax credit in Québec for the US taxes you've paid so you don't get taxed twice. That's a lot of paperwork.

Healthcare isn't an issue on the Québec side because that is your principal residence. Might be an issue on the other side of the border depending on what Québec covers.

One thing is that you will probably pay a lot of tax given the rates in Québec.

[agnelson]

2555 would not work, as steven mentionned. It would be hard to meet the 'foreign tax home' criteria given you would have a home that you use and an active business in US. besides, it would only apply to his Cdn wages.

2555 is never mandatory for a US citizen resident abroad, and Form 1116 is usually sufficient for Cdn residents to reduce their US tax burden on Cdn income to zero.

RAMQ eligibility would only be an issue if he sleeps more than 183 day out of the year outside Quebec. Principal residnce doesn't matter. Physical presence does.

[isabii]

I

[agnelson]

You need a visa. You are not a US/Cdn dual citizen, so you might consider asking this question on your own thread, and not under someone else's.