Resident Tax Status - US Citizen Working Remotely in Canada

[seb190]

Hi All,

I am trying to determine if I will be required to file income taxes in Canada for the 2011 tax year.

I am a US Citizen who will be working remotely as a full time employee at my American job while I attend University in Ontario. My program of study starts in September and I plan on moving on September 3, 2011. Considering the time I visited Canada so far this year, and that I will be going home to the States for our fall study break, American Thanksgiving and Christmas/Winter break, I will only be in Canada for a grand total of around 110 days in 2011.

To make things more complex, I am marrying my Canadian fiance on August 27, 2011. We haven't decided if I am going to file for Canadian Permanent Residency or not at this point. We're going back to the States and buying our dream home when I finish school in 2 years!! :D

I am reading conflicting material online about whether I will be classified as a resident for Canadian tax purposes or not in 2011. It seems the rule is that I have to live in Canada for at least 183 days before being under obligation to pay taxes in Canada for the 2011 tax year. However, some material I have read makes me think that because I will be married to my Canadian sweetheart I will automatically be classified as a Canadian resident for tax purposes.

My company is a large international corporation with offices in Canada and the US. I don't know if that matters or not.

Thanks in advance for any assistance or advice!
-SEB

[nelsona]

Since you are a student, you are accorded some latitude in determining Cdn residence. The fact that you will spend less that 183 days in itself does not prevent you from being considered resident. however, that fact that you are marrying a Cdn resident, and presumably living with her in canada, would likely tip the scale towards Cdn residency beginning on Aug 27th or earlier if you move in with her before then. You will definitely meet the 183 days in 2012, so best make the break now. Your spouse will not be moving to US with you any time soon, so you won't be able to say that you are returning "home" next summer, or even on breaks. Your home will be in canada.

There is a differnce between not living in canada but spending 183 days in canada, and moving to canada, which is what you are doing. Even if you moved on december 30th, you would be considered a resident from that day on. Your moving date in August will be your residency starting date.

Now, as to the US job: since you are living and working in canada, this sets up a situation for you and your firm. They must payroll you as a Cdn employeee, or make you a straight contractor. you've got some time to figure that out.