Canadian student in US w income from both countries - taxes

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mifter2
Posts: 2
Joined: Tue Jan 06, 2015 8:11 pm
Location: United States

Canadian student in US w income from both countries - taxes

Post by mifter2 »

I've searched through the forums (and the internet) for help with this, but without much luck.

Here is my situation: I am PhD student in the US who has an NSERC fellowship (income from Canada) that is supplemented by income from the university where I work/study (NSERC funding is less than the guaranteed stipend at the university). Thus, I have income from both countries. I want to know if I have been filing correctly these past few years, and what will happen with my tax situation if I decide to stay in the US and transition from my current student visa to a work visa.

Thanks for any help,
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Well, how have you been filing. Hared to say if you were correct without this piece of info, no?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
mifter2
Posts: 2
Joined: Tue Jan 06, 2015 8:11 pm
Location: United States

Post by mifter2 »

I file 1040NR in the USA and declare all US income, then I turn around and file in Canada, declaring my US income and my Candian income (the fellowship on a T4A - a moot point - and some dividend income). I apply the US fed tax that I paid to my Canadian return and calculate my tax credit toavoid dual taxation, and generally end up owing no Canadian tax since my fellowship is T4A and I have no other real income.

I want to know if this sounds correct, and I also want to know what to expect if I stay in the US and transition to a work visa when my student visa expires. Would I expect t change my country of tax residency, given that the vast majority of my income would be from the US (save for some dividends and any future capital gains I trigger)

Thanks.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

This sounds fine. Generally CDn students in US are not considered residents of US and continue being residents of Canada -- at least for 4 years, even if you have little ties in Canda. In the fifth year you start to lose the exemption and would become US tax resident (CDn fellowship etc would still be tax exempt by treaty).

Once you begin working, you definitely become a US tax resident and all income becomes taxable in US and no longer in Canada.

More importantly, you become a non-resident (Emigrant) of Canada, and have departure tax. And you must move your non-RRSP investments to a US broker.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
erathia
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Joined: Sat Apr 16, 2016 7:06 pm

Post by erathia »

Quick follow-up question regarding "CDn fellowship etc would still be tax exempt by treaty":

I'm in this exact situation (5th year on an F1-visa, so US tax resident, with Canadian NSERC fellowship income). Do I just not report the T4A on my US tax forms? Or do I need to claim it somewhere and then subsequently claim treaty benefits?

Thanks!
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