: Friday, December 09, 2005 3:00 AM
To: David Ingram
Subject: Canadian & US citizen moves to US
I am both a Canadian and a US citizen and have been living
permanently in Canada. I have been filing both Canadian and US
tax returns. My company plans to send me to Illinois for 2-3
years along with my family. Must I declare my income on both the
US and Canadian declarations? Must I also file a Illinois return?
What differences occur if I am paid by the Canadian company vs
the US company?
What must I do if I finally decide to stay permanently in the US?
-=============================
david ingram replies:
The big problem is whether you intend to leave Canada. If you
are leaving for tax purposes, you must file Canadian forms 1161,
1243 and 1244 to report your assets and any possible capital
gains tax deferral.
If you wanted to remain a factual resident of Canada, you would
file the Canadian return and exempt the US income on line 256
under article IV of the US / Canada Income Tax Convention. In
this case you would not file a 1161, 1243, and 1244. There would
be no tax payable to Canada other than on Canadian source income.
It does not really matter which company pays you. If you do not
intend to return or it is likely you will remain in the US,
switch to the US payroll and pay FICA.
If you know you are coming back, you can remain on the Canadian
payroll but still have to file the Illinois and US returns and
your first liability is to Illinois and the US. From years of
personal experience, I can tell you that it is easier to switch
payrolls BUT watch out for things like Pension continuations.
You should likely spend $428 and do a phone consultation with or
someone like me.
--------------------
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
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email to taxman at centa.com
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as
advice in any particular circumstances. No contract exists
between the reader and the author and any and all non-contractual
duties are expressly denied. All readers should obtain formal
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