TN Job while on Severance Payments

indes · Post by **indes** » Tue Jan 03, 2012 8:45 pm

I have been offered a contract in the US starting Jan 23rd, currently own a house in Canada, am single and would like to become a US resident by treaty to lower my Canadian tax obligations.

However, I will be receiving severance payments from my old position until June 16th. I just assume I will have to pay income tax on this amount in Canada, regardless of residency, but how will it effect my returns while 'residing' in the US?

Side question: If the house is empty while I pay the mortgage or find somebody to rent it, can I still claim US residency?

nelsona · Post by **nelsona** » Wed Jan 04, 2012 10:45 am

As sson as you move to live and work in US, you will be considered non-resident by treaty, even if you keep the house.

I'll get back to you on the severance. It will of course be added to your 2012 income in US, but it may only be subject to 15% flat tax in Canada.

triunbad · Post by **triunbad** » Thu Jan 05, 2012 4:48 pm

If he wasn't able to sell his house or rent it out, could he come back to the house for a month a year and still consider himself to be a non-resident for Canadian tax purposes. Would it make a difference if he only rented a home in the US while working, as compared to actually buying a home.

nelsona · Post by **nelsona** » Thu Jan 05, 2012 5:12 pm

Coming to canada for short visits while still living and working in US would not change one's residency.

having an "abode" in the US would be the important thing, not whether it was rented or owned. What would not be considered an abode in US would be a hotel room, temporary housing, or a monthly lease of a furnished appt.

nelsona · Post by **nelsona** » Thu Jan 05, 2012 5:22 pm

I just wanted to confirm that the severance payments made after departure from canada would be withheld at 25% flat tax.

You would report the severance on your US return, and would use the 25% tax towards a credit on your US return.

belmont · Post by **belmont** » Thu Jan 12, 2012 12:42 am

I have no my own property and most banks will not finance without the property. Are there any financial companies that offer mortgage in Tennessee?

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