QUESTION:
Hi David,
I really enjoy your newsletter. I have a fairl complicated situation. I am
a surgeon and will be moving to Seattle from Sept 2006 to Sept 2008 for a
two year research fellowship (no clinical duties, no patient involvment).
The majority of my income will be provided directly to me from my home
department at the University of Toronto. However, I am in the process of
applying for other stipends that will be paid to me through the lab in
Seattle. In essence, although I will be living in Seattle most of the time,
I will have income from both countries. How would I go about filing tax
forms and would I be taxed in each country and if so, would each country tax
my total income?
Secondly, I may practice on the side in either British Columbia or Alberta
for perhaps a couple of days a month. What kind of tax implication does
this add to my situation?
Thirdly, the folks in Seattle think that a J1 visa would be all that I need
since I do not have any clinical duties during my two year duration. Do you
think this is the right type of VISA to apply for?
Fourth, do you think I need to liquidate my Canadian assets (home, RRSP's)
and so forth in order make clear my place of residency is in Seattle during
those two years? I hear there may be certain tax advantages in doing this.
Lastly, my wife is also a physician and is planning on working when were are
both down there. How does this change our tax situation or could we file
our returns separately? If she chooses to work in the US, she will most
likely not work in Canada during that time. Also, during our first year in
Seattle, my wife will be on maternity leave. If I come down on a J1, does
she need to apply for a J2. I hear that a Canadian spouse of a Canadian
coming down to the US on the J1 does not need a visa to enter the US - is
this true? Lastly, if she does need a J2, she will ultiamtely need a H1-B
during our second year in Seattle in order for her to work. How do you
going about changing from a J2 to a H1B. I hear that it is quite difficult
and a waiver is required (to waive two year return to country of origin).
Is this waiver also necessary for people trying to convert from J2 to H1B or
is it only necessary for people trying to convert from J1- to H1B?
Thanks in advance for your help!
------------------------------------------------
david ingram replies:
A J-1 visa usually indicates that you are in the USA on a Student visa and
allows you to remain a member of your Ontario Medical plan, use your Ontario
driver's licence and keep your car(s) registered in Ontario.
It also leaves you (for the most part) as an official non-resident of the
United States and you would file a 1040NR income tax return. Washington
State does not have a personal income tax so there is no State return to
file.
Since all of your income is coming from Canada and you are a non-resident of
the US, you will file a Canadian return as a Factual resident of Canada and
pay tax to Canada. A Canadian house that is rented out to a stranger and
RRSP accounts do NOT have to be liquidated. Getting rid of driver's
licences, car registrations, Provincial medical plans and other affiliations
can get rid of your attachments to Canada but it has to be pretty specific
to do so.
There is no doubt that you would pay less tax if you were a resident of the
US at this time because you could file a joint return with your wife and
effectively split your income with your wife while she is on maternity leave
and then split the income again on a joint return when she starts working.
Perhaps you should consider having your wife dispense with her J2 and go
direct to an H1B or TN and go as a working physician to start with.
You are obviously too complicated to deal with in this Q & A.
I think you should likely do as I suggested to the previous questioner.
Give Joe Grasmick a call (www.grasmick.com) and ask him about the visa
choices. Another couple of suggestions for US Immigration lawyers you could
call in Vancouver (where you and your wife may be working a bit) would be:
David Andersson, Terry Preshaw or Michael Jacobsen. Terry Preshaw has an
office in Everett as well as Vancouver. I do not have their phone numbers
where I am writing this but can send them to you if you wish.
I would be glad to look after your tax returns when necessary but am clearly
out of "my" league when it comes to your immigration / working visa
situation. If there is one thing I pride myself on, it is knowing (and
recognizing) when it is necessary to send someone to a special specialist.
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