Canada/US Taxes Confusion

[Snowwolf 7]

Hi,

In 2020, I was in Canada from January to March. Then I went to the U.S. as a Visitor to be with my spouse. Now, I meet the U.S. Substantial Presence Test because I spent more than 183 days in the U.S.

For the whole year of 2020, I have been employed remotely by a Canadian company. In Canada I have a house (joint mortgage), driver's license, health card, bank account, and credit cards.

How do I file my taxes? Do I file Canadian taxes first and then file U.S. taxes and claim Foreign Earned Income Exclusion with the IRS?

Any help is appreciated. Thank you!

[aaron2020 11,651]

You need a qualified accountant.  This is not DIY.

 

You file your Canadian tax return.

 

You file your US tax return utilizing the Canadian/US tax treaty to prevent double taxation.  You do not qualify for the FEIE because you were in the US.

Not DIY.  You need a tax account.  Don't go to a tax preparer like H&R Block, etc.  

[SalishSea 17,985]

32 minutes ago, Snowwolf said:

Hi,

In 2020, I was in Canada from January to March. Then I went to the U.S. as a Visitor to be with my spouse. Now, I meet the U.S. Substantial Presence Test because I spent more than 183 days in the U.S.

For the whole year of 2020, I have been employed remotely by a Canadian company. In Canada I have a house (joint mortgage), driver's license, health card, bank account, and credit cards.

How do I file my taxes? Do I file Canadian taxes first and then file U.S. taxes and claim Foreign Earned Income Exclusion with the IRS?

Any help is appreciated. Thank you!

So you worked remotely while in the US as a visitor, without an employment authorization document?  

[Coco8 1,042]

Are you a US tax resident? Spending 6 months in the US for a single year is not enough to qualify as a tax resident. How long have you been in the US last year and the previous year? 

 

If every visitor had to pay taxes, then a lot of tourists would pay taxes.

 

How is your wife filing taxes since I'm guessing she is the US citizen?

 

1 hour ago, Jorgedig said:

So you worked remotely while in the US as a visitor, without an employment authorization document?  

 

This is a good question too.

[HRQX 4,145]

41 minutes ago, Coco8 said:

Are you a US tax resident? Spending 6 months in the US for a single year is not enough to qualify as a tax resident. How long have you been in the US last year and the previous year?

OP obviously meets Substantial Presence test for tax year 2020. OP entered the US with B-2 status around March/April 2020 so that's around 270 days in that calendar year. Mathematically, that in itself means OP meets Substantial Presence test. Time as B-2 visitor is NOT exempt: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

Do not count days for which you are an exempt individual. The term "exempt individual" does not refer to someone exempt from U.S. tax, but to anyone in the following categories:

• An individual temporarily present in the U.S. as a foreign government-related individual under an “A” or “G” visa, other than individuals holding “A-3” or “G-5” class visas.
• A teacher or trainee temporarily present in the U.S. under a "J" or "Q" visa, who substantially complies with the requirements of the visa.
• A student temporarily present in the U.S. under an "F," "J," "M," or "Q" visa, who substantially complies with the requirements of the visa.
• A professional athlete temporarily in the U.S. to compete in a charitable sports event.

[carmel34 3,647]

You need an experienced tax accountant who understands the US/Canada tax treaty, not just any accountant will know how to navigate this.  If you are knowledgeable and devoted, with an eye for detail, you could do it yourself.  Definitely don't use a walk-in income tax preparer.  When I last moved from Canada to the US I had to file tax returns in both countries, and had consultations with two tax accountants who did not have sufficient experience, so I read the US/Canada tax treaty and all the relevant forms/schedules/instructions for both countries and did it all myself.  It took hours but in the end it was done correctly.  I also had to file a form with Revenue Canada to let them know I had left Canada permanently and ceased to be a resident there for tax purposes, so look into that and do the same to prevent problems down the road.  The US/Canada income tax treaty helps to reduce double taxation some, but it does not eliminate it depending on your incomes in both countries.  Good luck!

Edited February 24, 2021 by carmel34

[INF 96]

On 2/23/2021 at 5:04 PM, Snowwolf said:

Hi,

In 2020, I was in Canada from January to March. Then I went to the U.S. as a Visitor to be with my spouse. Now, I meet the U.S. Substantial Presence Test because I spent more than 183 days in the U.S.

For the whole year of 2020, I have been employed remotely by a Canadian company. In Canada I have a house (joint mortgage), driver's license, health card, bank account, and credit cards.

How do I file my taxes? Do I file Canadian taxes first and then file U.S. taxes and claim Foreign Earned Income Exclusion with the IRS?

Any help is appreciated. Thank you!

Wow this is my situation too! I do not know if I qualify as a non resident for Canada as I had significant ties to the Canada the entire time! 

Edited February 26, 2021 by INF