US Canada Tax: What All Canadian Snowbirds Need to Know

There is currently an agreement in the works between Canada and the US to share information on who is travelling between the two countries. At the moment, the ‘Entry Exit Initiative’ allows the governments to track movement of non-citizens across the border while the plan to cover citizens is currently in the works. In due time, the US government will have the ability to know how long Canadian snowbirds are staying in the US and whether they have overstayed their welcome.

If you like to travel south to the US on a regular basis for extended periods of time, it is important that you understand all the rules surrounding your stay.

Under current rules, Canadians are allowed to stay in the US for a maximum of 182 days during a 12 month period. The 182 day limit can be for one single trip or it can be the sum of a number of trips. Individuals from other countries can only stay for 90 days.

The Internal Revenue Service applies its ‘substantial presence test’ to determine if you have spent enough time in the US to be considered a ‘resident’ and pay taxes. This test is a calculation which looks at the number of days you have spent in the US over a 3 year period. When performing the calculation, any day in the US in the current calendar year counts as 1 day; any day in the US in the year prior to the current calendar year counts as 1/3 of a day; any day in the US in the year before that counts as 1/6 of a day. If this calculations yields 183 days or greater, you may be required to file a tax return with the IRS.

There are of course exceptions for students, teachers, diplomats and individuals who are unable to leave due to medical conditions. But for the most part, snowbirds who want to maintain their non resident status should file Form 8840 (Closer Connection Exception Statement for Aliens) every year they spend time in the US. Snowbirds can maintain their closer connection to Canada by demonstrating a permanent home, personal belongings, family, and business in Canada.

The IRS has recently begun to crack down on snowbirds who overstay their welcome. If you are a snowbird, or if you like to make extended vacations in the US, certainly the last thing you want to do is worry about your taxes. At GTA Wealth Management Inc., we can help. We have extensive experience handling US Canada tax matters. Our certificated general accountants are among the most experienced in the field of international tax with a proven track record of outstanding success.Our many happy clients can attest to this fact. We would welcome an opportunity to be of service to you.

Let the experienced certified general accountants at GTA Wealth Management you get your US Canada tax affairs in order and minimize the taxes you pay. Contact or call GTA Wealth Management toll free at 1 855 GTA WLTH (855 482 9584) to accelerate your ride to financial independence. A professional wealth management financial advisor is ready to serve your wealth management, tax return and planning needs. GTA Wealth Management Inc. has three convenient locations in Mississauga, Toronto and Markham to serve you.

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