First off I'd just like to say thanks for providing this forum, what an excellent resource.
I'm looking for some help with my situation. I am a Canadian citizen who gained my US Permanent residency last year. I received my US green card in January 2010 and still owned a property and worked in Canada until March 2010. In April 2010 I was employed in the US and lived with my family down there (my wife is a US citizen). Thus I will report my departure date from Canada as March 2010.
Due to circumstances I couldnt forsee, I had to return to my old job in Canada in November 2010 .In the meantime I sold my place in Canada and bought a home in the USA. My family still live there, I just became an international commuter.
In a nutshell I plan to do my taxes this year as such:
Canadian taxes:
Claim income as a Canadian resident from Jan-March 2010
Claim income as a Canadian non-resident for November and December 2010
(Can this be done- dual status in Canada for the same tax year?)
USA Taxes:
Claim Worldwide income for the full year.
I've been looking into the right forms to file. Based upon my situation , would you agree with how I plan on filing? If all looks good could you please let me know which forms I should be filling in. I've read and re-read multiple posts from various websites and get more confused the more I read! Thanks in advance for any help.
Tax return, Canadian citizen first year in USA
Moderator: Mark T Serbinski CA CPA
I tend to agree with your approach.
US Federal -> Full-year MFJ, reporting world-wide income and claiming FTC for any Canadian taxes on Form 1116.
Canada -> Part-year departure return, with a departure date of March XX. You will be reporting your world-wide income for the period January 1 to March XX, and only Canadian source employment income for the remainder of the year. Ceasing Canadian residency for tax purposes is associated with having all of your assets (with certain exemptions), subject to deemed disposition, or what is commonly known as departure tax. The forms that you will need to pay particular attention to are T1161, T1243 and T1244 (if you will elect to defer departure tax).
All the best,
US Federal -> Full-year MFJ, reporting world-wide income and claiming FTC for any Canadian taxes on Form 1116.
Canada -> Part-year departure return, with a departure date of March XX. You will be reporting your world-wide income for the period January 1 to March XX, and only Canadian source employment income for the remainder of the year. Ceasing Canadian residency for tax purposes is associated with having all of your assets (with certain exemptions), subject to deemed disposition, or what is commonly known as departure tax. The forms that you will need to pay particular attention to are T1161, T1243 and T1244 (if you will elect to defer departure tax).
All the best,
Thanks for the responses.
I'm still trying to get my head around this properly. Since I would preferably like to complete a 1040 for the US with first year choice filing as whole year US resident.But wouldn't I then have to change my leaving date from Canada as Jan 1st? Wouldn't then all Canadian income for that year be as a Canadian non-resident. As I understand it , a person can't be considered resident in Canada and the USA for the same months (i.e Jan-march 2010) during a tax year? I've read and re-read the Emigrants guide for Canada and publication 519 and I cant seem to get clarification on this. Closest I can read is in the effect of tax treaty section, I guess we'd be looking at the 'tie-breaker rule'.
Also , in looking at my Green card , it says resident since 1/30/2010. I guess I did travel into the US on that date for a small break but returned to Canada for work Feb and March. According to the green card test in publication 519 my US residence should begin on the green card issue date. Even though in my eyes I didn't leave my job or principle residence in Canada until March.
I'm still trying to get my head around this properly. Since I would preferably like to complete a 1040 for the US with first year choice filing as whole year US resident.But wouldn't I then have to change my leaving date from Canada as Jan 1st? Wouldn't then all Canadian income for that year be as a Canadian non-resident. As I understand it , a person can't be considered resident in Canada and the USA for the same months (i.e Jan-march 2010) during a tax year? I've read and re-read the Emigrants guide for Canada and publication 519 and I cant seem to get clarification on this. Closest I can read is in the effect of tax treaty section, I guess we'd be looking at the 'tie-breaker rule'.
Also , in looking at my Green card , it says resident since 1/30/2010. I guess I did travel into the US on that date for a small break but returned to Canada for work Feb and March. According to the green card test in publication 519 my US residence should begin on the green card issue date. Even though in my eyes I didn't leave my job or principle residence in Canada until March.
How you choose to file in US has no impact on how you MUST file in canada: resident of province for year, but with departure date.
You can then file in US which ever way you are allowed to, which gives best US result.
You can then file in US which ever way you are allowed to, which gives best US result.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thanks Nelsona / hga,
Just spent half the afternoon on the phone with IRS and canadian international tax office, IRS was no help whatsoever.
I think I understand what you're saying about having to file as I must in Canada. But as I understand it for me it would mean to be filing as Canadian resident up to my departure date then as non-resident after (one form /dual resident). But wouldn't this then void any option I have as filing full 1040 MFJ in the US under the first year full residency option?
What Im having a hard time getting my head around is the having an option in the USA to file full year residency. Wouldn't everybody leaving any country mid-year to go to the USA, have part year tax residency obligations in the country they left ? Why then would anyone be able to claim whole year residency in the US via the option if they have to put partial residency in the country they are leaving?
I'm obviously missing some key point here, and its driving me bonkers lol
Just spent half the afternoon on the phone with IRS and canadian international tax office, IRS was no help whatsoever.
I think I understand what you're saying about having to file as I must in Canada. But as I understand it for me it would mean to be filing as Canadian resident up to my departure date then as non-resident after (one form /dual resident). But wouldn't this then void any option I have as filing full 1040 MFJ in the US under the first year full residency option?
What Im having a hard time getting my head around is the having an option in the USA to file full year residency. Wouldn't everybody leaving any country mid-year to go to the USA, have part year tax residency obligations in the country they left ? Why then would anyone be able to claim whole year residency in the US via the option if they have to put partial residency in the country they are leaving?
I'm obviously missing some key point here, and its driving me bonkers lol
I think I may have it right now from one of your posts on another forum nelsona. You advised someone that filing dual status was the correct way to do it but you then go on to say:
" the best way is filing a full-year 1040 and exempting Cdn wages from before the move using form 2555. This allows you to file jointly and get all US tax deductions. Cdns have the right to do this by treatyy.
Neither way has impact on Cdn return, which will be a departure return using the CRA emigrant guide as your instructions. Then yo uare done with Cdn taxes."
I think this applies to me
" the best way is filing a full-year 1040 and exempting Cdn wages from before the move using form 2555. This allows you to file jointly and get all US tax deductions. Cdns have the right to do this by treatyy.
Neither way has impact on Cdn return, which will be a departure return using the CRA emigrant guide as your instructions. Then yo uare done with Cdn taxes."
I think this applies to me