Canadian working in the US - Provincial tax returns?
QUESTION:
Hello, I have been working in the US since June of 2006. I understand i need to produce a canadian federal tax return for the time i've worked in canada but what about provincial (quebec) returns? I have heard that it was not necessary if i was not a resident of the province as of december 31st 2006 (which was the case for me).
any truth to this? thanks in advance.
_____________________________________________________
david ingram replies:
Sorry, you either pay a federal surtax or you pay a provincial tax. The directions are clear. When you leave the province / country, you put down the province of residence the day you left.
Make sure you fill in federal form T1161 if you left a house or cabin or stock / securities account behind. Penalty is up to $1,500 for being late with it even if you do not owe tax.
And don't forget - you file your US 1040 as a "dual status" payer. Check off yes in box 35A at the top of page 2 of the 1040. This also necessitates the filing of a 1040NR "DUAL STATUS STATEMENT" Read the instructions referred to on the top of page 2.
If you left an RRSP or other accounts behind, you also have to deal with the bottom two questions on Schedule B of the 1040 where the questions are posed about foreign accounts and foreign trusts. US Penalties for failing to report here are up to $500,000 plus 5 years in jail.
Do not worry about the form 3520 mentioned. You can substitute a form 8891 which takes 20 minutes instead of three or four hours.
Hello, I have been working in the US since June of 2006. I understand i need to produce a canadian federal tax return for the time i've worked in canada but what about provincial (quebec) returns? I have heard that it was not necessary if i was not a resident of the province as of december 31st 2006 (which was the case for me).
any truth to this? thanks in advance.
_____________________________________________________
david ingram replies:
Sorry, you either pay a federal surtax or you pay a provincial tax. The directions are clear. When you leave the province / country, you put down the province of residence the day you left.
Make sure you fill in federal form T1161 if you left a house or cabin or stock / securities account behind. Penalty is up to $1,500 for being late with it even if you do not owe tax.
And don't forget - you file your US 1040 as a "dual status" payer. Check off yes in box 35A at the top of page 2 of the 1040. This also necessitates the filing of a 1040NR "DUAL STATUS STATEMENT" Read the instructions referred to on the top of page 2.
If you left an RRSP or other accounts behind, you also have to deal with the bottom two questions on Schedule B of the 1040 where the questions are posed about foreign accounts and foreign trusts. US Penalties for failing to report here are up to $500,000 plus 5 years in jail.
Do not worry about the form 3520 mentioned. You can substitute a form 8891 which takes 20 minutes instead of three or four hours.
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