Is there a "sweet spot" between US and Canadian Ta

[MicrosoftWabbit]

I have been told that for US taxes there is a $85,000 earned income exemption if some one is not resident in the US for purposes of taxation.

I have been told that Canada taxes on the basis of time in Canada (based on hours and not part of days).

Assuming a salary of $100,000 CANADIAN

So, a US citizen living in the US, working in Canada and paid by a Canadian Firm (driving across border each day), some 220 days/yr logging entry/exit ends up with 2,200 hrs in Canada and thus 25% of the year IN Canada, thus only $25K would be subject to Canadian taxation.

The US see's the person as being outside of the US for 220 days, thus not resident: $100,000 - $85,000 = $15,000 is taxable. with credit for any Canadian Tax paid!

Of course, the apparent savings in taxes would pay for US medical coverage.

I suspect that something is wrong here -- but unclear on where the issue is.

Is it that the US deems the person resident because they have been in the US on 365 days and thus disallowes the $85,000.

[nelsona]

The foreign earned income exclusion requires you to be outside US either for a FULL year, or be bona fide resident of a foreign country.

You would meet neither.

And it is hours of work, not time. There is no "hours of presence test". You are mistaken on that. Even if you WORKED 25% of the time in canada, the exemption would still not be available to you.

All your wages are taxable in Both canada (becasue all your work in done there) and US (because you live there and are US citizen), with Tax CREDIT, not an exemption, available to you.