My_question_is: Applicable to both US and Canada
Subject: flight attendant based in Vancouver wishing to commute to
Seattle.
Expert: taxman at centa.com
Date: Tuesday February 28, 2006
Time: 03:52 PM -0800
QUESTION:
Hello,
My boyfriend is Canadian, owns a green card, works out of Seattle. I'd like
to continue working out of Vancouver as a flight attendant, and make Seattle
"my home" in order to live with him... I understand that unless I have an
immigrant status I cannot do this i.e green card. We are not thinking of
marriage just yet...I also have French citizenship, are the rules different?
What should I do? At this stage I understand that with my canadian passport
I must give proof of permanent residency in Canada. To what extend? And, how
many times a week, month, would I be able to cross the border? Any limits?
How long could my stay in the US be at a time?
What rights do I have as a visitor while in the US.
Thank you for your time.
A.M
=================
I am going to put two former newsletters here. If you really want advice,
you should come and see me on one of your trips to Vancouver. Preferably,
you would have your US friend with you at that time. Note that I charge
$428 Cdn for this type of Consultation.
You can NOT visit your friend in Seattle unless you have a full blown
residence in Canada. That could be something you share with someone else
but it should have the rent, phone and hydro in your name or joint names.
---------------------------------------
- examples follow -
Dear David Ingram,
I work for an aviation consulting firm in Washington D.C. that is working
for a group of approximately 90 U.S. resident Air Canada pilots. These
pilots are unhappy because Canada recently changed the way that it taxed
their income from international flights.
Before, their income from domestic flights was completely taxable in Canada
and their income from international flights was not taxable in Canada. Now
the domestic taxation remains the same, but the income for international
flights is now taxed in Canada for the portion of time that the flight is
over Canadian airspace.
Do you know how the United States treats a parallel situation where a
Canadian resident works for a U.S. airline?
==========================================
david ingram replies:
I have been doing these returns for pilots and air crew since 1969 and
Canada has always taxed the domestic portion of an international flight.
The change which was started six years ago and went back to 1995 returns
was more one of enforcement of detail than it was one of a change in the
law. I know this to be factual because the tax change for our clients
rarely exceeded $800 and one even got a small refund.
On the other hand other pilots were coming in with reassessments which went
from $20,000 to $100,000 because their accountants had been very aggressive.
And to justify the "pogram" run by the CCRA, they managed to find many, many
air crew who were not "really" living in the states or more often, not
really living in Costa Rica or other tax haven country.
The real beneficiaries of the audits which involved over 270 Air Canada
Personnel and over 170 Canadian Airlines Personnel (Before the merger) were
the provinces. With the audit, the CCRA insisted that provincial credits be
given.
This meant that if a pilot left Vancouver and flew to Calgary, one half of
the flight was credit to BC and the other half to Alberta. When he (or she)
took off from Alberta and landed in Winnipeg, Manitoba got credit for half
the flight and Alberta got the other half. When flying from Winnipeg to
Toronto, Ontario got half and Manitoba got half. If the pilot then flew to
Chicago, about 6% of the flight was credited to Ontario and the rest was
international and not taxable in Canada. When the pilot leaves Chicago for
Calgary, Alberta gets 5% and the other 95% is international. Leaving
Calgary to return to Vancouver would be divided between Alberta and British
Columbia. The pilot (or flight attendant or Purser) has to file a
multi-jurisdictional tax return.
On the other hand, a pilot who regularly flies Vancouver <> Hawaii or
Toronto <> Miami and does no domestic flights will only pay tax to Canada on
about 5 to 8% of their earnings. If they are a resident of the US, All of
it is taxable to the US and he or she would get a dollar for dollar foreign
tax credit for the tax paid to Canada.
When these pilots or other air crew are re-assessed by Canada and have to
pay more, it will just increase the foreign tax credit to the US. AND, AND,
AND there is no three year limitation on claiming the foreign tax credit on
the US return. The US / Canada Tax treaty takes this type of "other
country" re-assessments into account and allows a change up to ten years.
Over the years, I have only had a handful of Canadian Residents who were
working for US Airlines while continuing to live in Canada. Every one was a
US citizen and US citizens are taxed on their world income no matter where
they live. When paid by the US Airline, they are paying full taxes to the
US first. Since no US airline is involved in the cross Canada transport of
passengers, the same set of facts does not arise.
Most US airlines (other than Air Alaska) only have a short part of any
flight over Canadian Air Space as they land. The Canadian resident pays full
tax to the US on all their earnings and then reports the earnings again in
Canada and claims a foreign tax credit for the Federal Taxes, Medicare and
Social Security paid to the US. The Canadian resident does not get credit
for the 401(K) deduction and ends up paying tax on this twice. Once now to
Canada and then again when they withdraw it as a pension in the future
(which has already come and gone for many retirees).
You are also welcome to forward this to your pilots.
<www.david-ingram.com">www.david-ingram.com/">http://www.david-ingram.com/>
-----------------------
The next question involves the crew member of a ship but the same rules
apply.
In particular, pay attention to the Border Kit description
---------------
QUESTION:
I am a Canadian Crew member onboard passenger Cruise Ships who was denied
access in to the States a year ago. It was based on the official not
believing I had sufficient ties to Canada. I presented all documentation 2
days later and was granted access to Miami for a vacation. I have not been
turned away since but I do have to go through extensive questioning each
time I travel to or through the US. Most recently I was held up in Huston
coming home from Mexico and almost missed my connecting flight to Canada.
Is there anything I can do to stop this from happening? I travel for work
quite often and it is very stressful. I'm frightened that I'll get someone
having a bad day again and get bared forever ending my career.
================================
david ingram replies;
EVERYONE who travels through the US border on a regular basis and is time
sensitive in that they HAVE TO make a meeting, catch a ship, catch a plane,
etc, needs a BORDER KIT.
What is a Border Kit?
It is a 1/2 inch three ring binder which contains:
1. a copy of your last three years of Canadian Income Tax returns or US
returns if vice versa)
2. a letter form your employer showing who you work for, where you are paid
from, what your duties are and if possible an itinerary.
3. A copy of your Canadian lease or rental or ownership agreement for your
Canadian home.
4. A copy of your Canadian phone bill.
5. A copy of your Canadian Utility bill
6. A copy of your Canadian cable vision bill
7. A copy of your passport
8. A copy of your birth certificate
9. a Copy of your Provincial Driver's licence
10. A copy of your Provincial medical card.
11. a copy of any club or other organization memberships you have
12 a copy of your Canadian credit cards
13. A copy of your local library card
14. A copy of your local video rental card
And anything else that seems relevent.
WARNING!
If you do not have 2, 4 and 5 because you do not have a HOME in Canada, you
do not have a legal right to enter the USA as a visitor.
Cruise ship people have a bad habit of not filing their tax returns and many
just stay with parents, friends, ex lovers or current lovers when they come
back to Canada. If this is your situation, you need to establish those
roots. Get a phone bill at your parents' house, get the Utility bill in
your name, etc. Pay rent to someone!
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a
permanent guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show
called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Call (604) 280-0600 to have your question answered. BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 9 AM to 9 PM 7 days a week (please do not fax or phone
outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://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 advice from a competent and appropriately qualified legal
practitioner or tax specialist in connection with personal or business
affairs such as at www.centa.com <http://www.centa.com> . If you forward
this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
Alaska, Alabama, Arkansas, Arizona,
California, Colorado, Connecticut,
Delaware, District of Columbia, Florida,
Garland, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey,
New Mexico, New York, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon.
Pennsylvania, Rhode Island, Rockwall,
South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virginia,
West Virginia, Wisconsin, Wyoming,
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec City,
New Brunswick, Prince Edward Island,
Nova Scotia, Newfoundland, Yukon and
Northwest and Nunavit Territories,
Mount Vernon, Eumenclaw, Coos Bay
and Dallas Houston Rockwall Garland
Texas Taxman and Tax Guru and wizzard
wizard - consultant - expert - advisor -advisors consultants - gurus - Paris
Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin,
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany STAR WARS
David Ingram gives expert income tax & immigration help to non-resident
Americans & Canadians from New York to California to Mexico family, estate,
income trust trusts Cross border, dual citizen - out of country investments
are all handled with competence & authority.
What's Related