Living in the USA, working in Canada

[MVJ 0]

You would be taxed in Canada due to your employment in Canada ('factual, but not actual, resident of Canada) and need to file returns in both Canada and the US. You would be a US resident, so your US return would declare your 'world income' and then you would claim a foreign tax credit for the amount of tax you paid to Canada through your employment. Basically, the tax treaty between Canada and the US would ensure you would not pay double taxation - except for the circumstances noted by Neiks where the State you reside in does not have to follow the tax treaty. Since you would not be residing in a Province, though, it is my understanding you would not have to file a Provincial return so it should balance itself out. You would file through the International Tax Office but would fill out the return based upon the Province in which you were employed (Ontario).

The easiest way to do it would be Neiks way - pay a qualified cross border tax consultant to prepare your returns..

Thank you all for your responses, (yes, even Aaron2020 for a crash course in international taxation and esp Neiks for remaining on the board and helping us with his/her experience. The award for the best answer goes to Kathyryn41 for the most clear, concise and to the point answer.

I understand I would pay CDN federal tax and will have to file US tax returns as well. Wondering if NY state adheres to the Tax Treaty or will I have to pay NY state tax as well?

Am sorry, if I've hijacked this thread. Let me know so I can start a new one. thanks!

[Gaiadancer 0]

Yep, I do it! If you have any questions in regards to it feel free to ask.

Thanks Neiks! I am rather new to this "adventure" but I figure forewarned is forearmed. Here's the situation and it is just developing...

I am a home owner in Ontario. I am employed as a full-time teacher in the Ontario public school system. I have been dating a man living an hour away in the US.

So far, I am travelling there twice a week, and staying usually three nights a week. Marriage maybe in the future but that would be a couple of years down the road. My understanding is that if I keep my time in the US below 50%, I will not create a red flag at border crossings. I do have a NEXUS card to make border crossings quickly. Down the road, should we decide to live together, before marriage, would I be able to travel back to work in Canada? If I do increase my stay time above 50% will this jeopardize any future applications? I realize I am asking well ahead of time, however I am a very honest person and am always transparent in answering questions to the border patrol and also in the interview for my NEXUS card.

Your advice is greatly appreciated.

Thanks!

[neiks 19]

Thanks Neiks! I am rather new to this "adventure" but I figure forewarned is forearmed. Here's the situation and it is just developing...

I am a home owner in Ontario. I am employed as a full-time teacher in the Ontario public school system. I have been dating a man living an hour away in the US.

So far, I am travelling there twice a week, and staying usually three nights a week. Marriage maybe in the future but that would be a couple of years down the road. My understanding is that if I keep my time in the US below 50%, I will not create a red flag at border crossings. I do have a NEXUS card to make border crossings quickly. Down the road, should we decide to live together, before marriage, would I be able to travel back to work in Canada? If I do increase my stay time above 50% will this jeopardize any future applications? I realize I am asking well ahead of time, however I am a very honest person and am always transparent in answering questions to the border patrol and also in the interview for my NEXUS card.

Your advice is greatly appreciated.

Thanks!

I always chuckle when the term "red flag" appears in this forum. Contrary to what people believe there is no such thing as a "red flag" that pops up on the computer screen when your id is entered into the system. The scanning of the id is simply a way to log your passage and info into the computer. Your traveling history doesn't automatically pop up nor does it if you have been previously secondary. Only if you were a subject of a look-out would anything at all appear. And a person doesn't become a subject of a look-out easily. A physical query actually has to be run to pull up your passage history. A 'red flag" would be better defined as setting off the primary officers suspicion that something is not right.

As "living together before marriage" isn't going to be an option other than through the fiancé visa. I'm sure there will be plenty of others on this board that will tell you that this is a big no no for may reasons. Once you are married and have your PR status you can travel back and forth to work and return home to the US daily. If your work in Canada involved spending extended periods of time in Canada and not returning to the US then you are best to check with US CBP on the legal requirements to keep your status.

Good luck on your journey.

[ofdmguy 0]

Is that possible to reside in USA for 183 days but still claims to be Canadian resident? (Assuming I own properties on both sides of the border.) The reason I ask this strange question is that in January 2013 MSP of British Columbia allows BC residents to be absent for up to 7 months (for the purpose of vacation). How this is going to be viewed by a Canadian border agent?

Yep, I do it! If you have any questions in regards to it feel free to ask.

[aaron2020 11,651]

Is that possible to reside in USA for 183 days but still claims to be Canadian resident? (Assuming I own properties on both sides of the border.) The reason I ask this strange question is that in January 2013 MSP of British Columbia allows BC residents to be absent for up to 7 months (for the purpose of vacation). How this is going to be viewed by a Canadian border agent?

First thing tax officer will ask - How is it a 7 months vacation when you claim residency in the US?

One does not normally take a vacation (temporary absent from home) while claiming residency in another country.

[Kathryn41 3,205]

Is that possible to reside in USA for 183 days but still claims to be Canadian resident? (Assuming I own properties on both sides of the border.) The reason I ask this strange question is that in January 2013 MSP of British Columbia allows BC residents to be absent for up to 7 months (for the purpose of vacation). How this is going to be viewed by a Canadian border agent?

Yes, you can still have an official residence in Canada which means you are in the US on a non-immigrant sort of visa. You would need to prove to the US that you have maintained closer personal ties to Canada than to the US, however, which includes a physical presence formula. There are things that counter that formula, such as the reason you are in the US for 7 months of the year. If you are a retired snow bird with properties in both locations and spend the winter months and a bit longer south of the border, you will probably be able to prove you have maintained closer taxation ties to Canada than to the US.

Immigration and taxation are two totally different situations. The IRS basically isn't concerned so much with your legal residency but your physical presence. If you are physically present in the US more than 180 days in any one year regardless of what your immigration or legal residency status is, you are required either to file a US tax return or to file a form that declares you have maintained closer tax ties to Canada than the US. Regardless, you can't ignore the IRS.They are the ones you need to be concerned with, not the Canadian border agent who really could not care less why you are in the US for 7 months of the year.

US Customs and Border services and US immigration, however, will be very interested in your spending 7 months of the year in the US as your limit for any one visit is a maximum of six months - 180 days - and you would need some sort of a visa - and a reason that has been accepted and approved by the border guard - to be in the US for longer than that in an unbroken stretch.

Edited June 22, 2014 by Kathryn41

[ofdmguy 0]

Actually I have greencard and can stay in US side without any issue. I need to live in US six months in a year in order to maintain my US residence requirement. My job is located in Canada and it is not feasible to commute every day (about 2hrs drive one way). My job, however, allows me to spend half week in Canada so I will live in my Canadian house for half week. I have no concern with tax because I will have to file income tax in both countries. My immediate concern is that if it is possible to drive a BC plated car while claiming residence in US or it is easier if I drive a US plated car to Canada? I recall there is a rule that says no Canadian resident is allowed to drive a US plated car in Canada.

My another question is related to my BC MSP. It is funny that even I work full time in BC, live here for up to six months a year, pay taxes and own property in Canada, but I may not be eligible for provincial MSP anymore if I claim US resident. Any solution to this problem?

Yes, you can still have an official residence in Canada which means you are in the US on a non-immigrant sort of visa. You would need to prove to the US that you have maintained closer personal ties to Canada than to the US, however, which includes a physical presence formula. There are things that counter that formula, such as the reason you are in the US for 7 months of the year. If you are a retired snow bird with properties in both locations and spend the winter months and a bit longer south of the border, you will probably be able to prove you have maintained closer taxation ties to Canada than to the US.

Immigration and taxation are two totally different situations. The IRS basically isn't concerned so much with your legal residency but your physical presence. If you are physically present in the US more than 180 days in any one year regardless of what your immigration or legal residency status is, you are required either to file a US tax return or to file a form that declares you have maintained closer tax ties to Canada than the US. Regardless, you can't ignore the IRS.They are the ones you need to be concerned with, not the Canadian border agent who really could not care less why you are in the US for 7 months of the year.

US Customs and Border services and US immigration, however, will be very interested in your spending 7 months of the year in the US as your limit for any one visit is a maximum of six months - 180 days - and you would need some sort of a visa - and a reason that has been accepted and approved by the border guard - to be in the US for longer than that in an unbroken stretch.

Edited June 22, 2014 by ofdmguy

[ofdmguy 0]

I have got your point. The default assumption is that one can only claim one home. For a small number of people who indeed have two homes, they will have to pick one. That is why the system has created the six months or 183 days rule to prevent anyone from claiming two homes at the same time.

First thing tax officer will ask - How is it a 7 months vacation when you claim residency in the US?

One does not normally take a vacation (temporary absent from home) while claiming residency in another country.

Edited June 22, 2014 by ofdmguy

[Kathryn41 3,205]

Actually I have greencard and can stay in US side without any issue. I need to live in US six months in a year in order to maintain my US residence requirement. My job is located in Canada and it is not feasible to commute every day (about 2hrs drive one way). My job, however, allows me to spend half week in Canada so I will live in my Canadian house for half week. I have no concern with tax because I will have to file income tax in both countries. My immediate concern is that if it is possible to drive a BC plated car while claiming residence in US or it is easier if I drive a US plated car to Canada? I recall there is a rule that says no Canadian resident is allowed to drive a US plated car in Canada.

My another question is related to my BC MSP. It is funny that even I work full time in BC, live here for up to six months a year, pay taxes and own property in Canada, but I may not be eligible for provincial MSP anymore if I claim US resident. Any solution to this problem?

The crux of the issue is that if you have a green card you are a resident of the United States and no longer a resident of Canada. You can visit and work in Canada and you can physically stay at a property you own in Canada, but your legal residence is - and needs to be - the United States. If you are travelling back and forth to Canada, even though you are staying in Canada during the week due to work reasons, but are returning to the US where your listed home address is, then you are not a Canadian resident. If you declare that you are a Canadian resident, whether on taxes or any sort of paperwork in Canada, then basically, you are also declaring that you have abandoned your US residency and your green card. If you wish to keep your current status in the US you cannot declare yourself a resident of Canada anywhere.

This then solves your problem with your license plates. You need to plate the car in the US and drive it into Canada. Yes, a Canadian resident is not allowed to drive a US plated car into Canada - but as a green card holder, you are not a Canadian resident; you are a US resident. You will be required to show your green card at the border when asked along with your US issued driver's license and US based automobile insurance. All of these need to be US based if you wish to retain your green card.

Unfortunately, there is no solution to the health insurance situation that will allow you to retain your green card and qualify for BC health insurance. Health Insurance is for those resident in Canada; you are not resident in Canada; you are resident in the US. In order to claim provincial health benefits, you need to be a Canadian resident, but you cannot be a Canadian resident if you claim US residency by using a green card.

While it would be nice to have our cake and eat it to, that just isn't possible.

The most obvious solution, however, is to apply for US citizenship if you are eligible. This will allow you to live and work in either country at your choice. You would still need to file a US tax return even if you reside in Canada, but it would provide you with the option of declaring either country your country of residence without compromising your ability to live and work in the US.

Edited June 22, 2014 by Kathryn41

[NikLR 13,232]

Well said by Kathryn!