My_question_is: Applicable to both US and Canada
Subject: Income Tax Liability in Canada upon repatriation
Expert: taxman at centa.com
Date: Thursday November 03, 2005
Time: 08:35 PM -0800
QUESTION:
I have been living in U.S. for the past 6 years, while employed by U.S.
companies. I declared non-residency in Canada in September 1999, severed
Canadian ties (sold house, closed bank accounts, etc.)and moved from Alberta
to Texas where I purchased a home. Since then I have worked in the U.S. via
TN and H1B work visas and have paid income tax in the U.S. My current H1B
expires in September 2006. I have not applied for residency status in the
U.S. during this period as I have changed employers twice. Two years ago my
wife and I purchased a vacation property in Ontario. It is in her name. At
that time we opened Canadian bank accounts. My wife and children spend the
summers in Canada. I make 4 or 5 short trips to Canada throughout the year
totaling no more than 21 days. We are considering returning to Canada next
year. Is it possible that I could be deemed a resident of Canada over the
past two years and be assessed income tax during that period? Should I
apply for U.S. residency status?
========================
david ingram replies:
>From what you have told me, Article IV of the US / Canada Income Treaty
clearly makes you a resident of the United States for and during the time
that you will have been there.
Although you have a home available in both countries, you own them both and
your children are attending school in Texas and you are working in Texas.
When you return to Canada, you will file a dual status 1040 and a returning
resident T1 General.
Your question about applying for permanent status in the US is another
matter. If I were you I would do so immediately, I regret very much not
doing so myself when I could. If I were a US citizen as well, I would still
live in my home in North Vancouver, but it would greatly enhance my working
life to be able to work in the US whenever I wanted to without getting a
visa. So, unless you have a monumental dislike for the states and cannot
wait to get back to Canada, I would get my paperwork for a green card in the
works immediately and stay long enough to get the US citizenship for myself
and my children.
Answers to this and other similar questions can be obtained free on Air
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