Nonresident filing while adjusting status?

[INF 96]

Hi guys,

 

I got stuck in the US during covid and ended up adjusting status in Aug 2020. I have been here since March 2020. I talked to my CPA and since I’m from a NAFTA treaty country I can use tiebreakers to determine residencies. As determined by his fancy tools, I’m a resident of Canada (I worked there remotely, all my investments and bank accounts are there and I have my house there still that my parents live in). I never intended on moving here when I did and got stuck here. Based on the NAFTA treaty you are able to claim residency in one country and use tiebreakers to determine non residency in the other country so I will be a non resident of the US. You can cite the part of the treaty and fill out some other form to explain your reasoning. I will be using a CPA to file all

this. What I’m worried about is if USCIS will care when they see that I filed as a non resident on my 2020 US taxes during our interview this year while I was adjusting my status. I do plan on filing jointly though and filing as a resident in 2021.

[FlyingCircus 5]

When you say that you filed as a non-resident, are you talking about filing form 1040-NR? Are you talking about your spouse using the Married Filing Separately status and listing you as "NRA"? Are you talking about considering yourself a bona fide resident of Canada to exclude foreign earned income despite being a resident alien for tax purposes in the US? More than one of these? None? I'm not questioning your CPA, it's just not clear to me from your description.

 

I would first make sure that you are confident in being able to justify (using all applicable rules, definitions, etc. from the IRS) your decision around how to handle taxes. From there, keep in mind that the way the IRS and USCIS define being a resident alien is not the same. If asked by either, be ready and able to explain your reasoning. You should probably document your reasoning now, while it's fresh, by writing a concise outline of all of the factors you mentioned and how you arrived at your decision. As long as you can do that I don't see why it would be a problem.

[INF 96]

54 minutes ago, FlyingCircus said:

When you say that you filed as a non-resident, are you talking about filing form 1040-NR? Are you talking about your spouse using the Married Filing Separately status and listing you as "NRA"? Are you talking about considering yourself a bona fide resident of Canada to exclude foreign earned income despite being a resident alien for tax purposes in the US? More than one of these? None? I'm not questioning your CPA, it's just not clear to me from your description.

 

I would first make sure that you are confident in being able to justify (using all applicable rules, definitions, etc. from the IRS) your decision around how to handle taxes. From there, keep in mind that the way the IRS and USCIS define being a resident alien is not the same. If asked by either, be ready and able to explain your reasoning. You should probably document your reasoning now, while it's fresh, by writing a concise outline of all of the factors you mentioned and how you arrived at your decision. As long as you can do that I don't see why it would be a problem.

Hey thanks for this! I’ve decided it’s better to just file as a resident. The tax breaks are better and should justify the cost of filing all the forms required for Canadians!