Moved from Canada to US in 2011 - Less than 183 days

daveburnett · Post by **daveburnett** » Mon Apr 09, 2012 11:08 am

Here is my situation:
-I earned money in Canada from Jan 1, 2011 to Sept 30, 2011
-I moved to the US and earned money from Oct 1, 2011 to Dec 31, 2011
-I therefore am considered a non-resident for the 2011 tax year because I have been in the US less than 183 days and fail the SPT

Based on reading through forums, Canada emigrants guide and IRS documents, here's what I understand I have to do:
-File departure return in Canada and report all Canadian income up till the day I departed
-File 1040NR in US reporting all world income
-File 1116 to apply for credit for Canadian taxes on Canadian income to avoid double taxation

The problem I am having is where on the 1040NR I report my Canadian (foreign) income. I believe this is the cause of another problem: after filling out the 1116 form I am ending up with a tax credit that is equal to the US taxes I paid - meaning the IRS owes me ALL the taxes I withheld on my US income back. This is obviously a mistake but I'm having difficulty figuring out where my mistake is.

I've only reported my Canadian income on the 1116, but it seems to me it should also appear somewhere on the 1040NR so that some US taxes are applied against the Canadian income, and then the credit cancels out some/all of those taxes. However I can't find where on the 1040NR this would go as the income section states "Income Effectively Connected With U.S. Trade/Business" - this is not US business, it is Canadian.

I believe my case is fairly common and should be straightforward - is there any common mistakes I may be making when it comes to reporting foreign income and claiming credits on that income?

Any help would be much appreciated.

JGCA · Post by **JGCA** » Mon Apr 09, 2012 11:31 am

By filing a departure return you are no longer a resident of Canada you left only report to Canada income till date of departure in province you resided when leaving

You can file in US a 1040NR showing only your US source income nothing more, if you choose by treaty to file a full 1040 regular then you show world income with tax credits or 2555 to exclude employment income.

If you select to file a full yr 1040 you will find the correct place to file teh 1116 on this form and not on a 1040nr.

daveburnett · Post by **daveburnett** » Mon Apr 09, 2012 11:43 am

Thanks for your quick reply. I will file my Canadian income with the CPA while residing in Canada and my US income with the IRS while residing in the US.

So in my circumstance, the IRS does not need to know about my Canadian income while I lived in Canada because I was there for more than 183 days?

JGCA · Post by **JGCA** » Mon Apr 09, 2012 11:45 am

Departure return date is the cut off to Canada

daveburnett · Post by **daveburnett** » Tue Apr 10, 2012 2:51 am

Thanks again for the information. Since I am filing a 1040NR, I understand I can't take the standard deduction.

Can I still take the personal exemption?

So if I earned $6400 in the last two months in the US, I can take the personal exemption of $3700 and only be taxed for $2700. Is this correct? It doesn't need to be prorated or anything?

Jospher · Post by **Jospher** » Tue Apr 10, 2012 3:04 am

I'd imagine House M.D dvds takes talent to ruin not one but two television networks at the same time, but the assholes at How I Met Your Mother dvds found a way to destroy both G4 and TechTV. After merging them together last year MASH dvds is now to be revamped to the point where fellow people like The Apprentice dvds who used to like the channel will now have to find something else to watch. Over the years The Lying Game dvds was a slight connection between G4 and TechTV. NCIS dvds made cameo appearances on Arena and Dexter dvds was video game related. When the two merged in Fall 2004 Flashpoint dvds formed G4TechTV. And Supernatural dvds loved it. Truth be told, The Mentalist dvds had serious gaps in their lineups that were now taken care of. The idea of two channels uniting as The Tribe Season dvds was a fantasy for someone like The Office dvds who could now watch virtually all of their programming. 5 months later Smallville dvds was still sweet. My new favorite show The Closer dvds was on thrice a day and True Blood dvds had the blend of half video games working for them. Then something bad happened in 24 Hours dvds. American Horror Story dvds clung to TechTV to get their more viewed TV slot and then pushed them aside. Boardwalk Empire dvds was just G4 again in March, and the executives started to butcher both TechTV and The X Files dvds. Filter, which at Falling Skies dvds was on par with the best the channel had to offer, suffered the most. Brothers and Sisters dvds stopped being a top-10 video game show and became a product show as well, enticing movies, Disney dvds into the list. Fast And Furious Movies dvds fell so hard that on one episode The Good Wife dvds watched they were using quotes from IMDB that some user had written about some movie.

daveburnett · Post by **daveburnett** » Tue Apr 10, 2012 3:27 am

One more thing... it is clear I am not eligible for the standard deduction on my federal form, but am I eligible for the standard deduction on the California state form (540NR)? I cannot find any clear indication in the instructions saying I cannot take the standard deduction.