My_question_is: Canadian-specific
Subject: US/Canadian Taxes
Expert: taxman at centa.com
Date: Wednesday April 26, 2006
Time: 06:08 PM -0700
QUESTION:
Hello David,
Thanks for taking time to read this email...
I got your reference from an online mailing list and was wondering if you
could help me with my question.
Questions: Do I need to file canadian taxes ?
Background:
I became a canadian permanent resident/Immigrant in Nov'04 while I was
working in the US on H1B Visa . since i have become a canadian immigrant I
have not yet physically moved to Canada . So, I was in US for whole(365
Days) of 2005 for Tax purposes. I also do not own any house/property in
Canada and my whole family lives with me in US. Does this qualifies me as a
non-resident and do I still need to file any canadian taxes ? Can I benefit
from US-Canada Tie Breaker
Treaty Article IV ? . I am not sure how much does it matter but I filed a $0
Tax return for 2004 in April of last year. I was under the impression that
since I got immigration I need to file a tax return even though I was in US
for most of 2004 before I got my immigration and did not have any earnings
in canada. I would appreciate your feedback.
PS: I have a checking account in canada. I opened this
account when I got the immigration in Nov'2004, but I
have not used it much and have recently changed my
status to " non-resident" on my account.
Thanks in Advance for your help
------------------------------------------------
david ingram replies:
Canada does NOT tax based on citizenship or immigration status except where
the citizen / PR does not have another tax home. Canada taxes on physical
presence in Canada or a failure to establish a bone fide residence in
another country. In your case, Article IV of the US Canada Income tax Treaty
makes your tax home the USA.
If your family is with you in the US and you were not even in Canada in
2005, there is NO onus on you to file a Canadian tax return.
However, you DO have to be "physically present" in Canada for 2 out of 5
years. This would mean that you have to have moved to Canada (and stay here
for two years) by Nov ?? 2007 and if you were to cut it that close, you can
NOT leave Canada for the next two years .
If a US job is important to you, try living in a border town in Canada and
commute to work in the USA. After four years, you can get your Canadian
Citizenship and have the best of both worlds. The other advantage of that
is that it extends your H1B for an extra 2 1/2 years because they (the
USCIS) count the number of days you are in the US to make up years. If you
are only there for 5 days a week, you get an extra couple of years
qualification time for the H1B.
hope this helps.
---------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
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