Hello!
1- Can a commuter green card (GC) holder file form 2555 without fear of having their GC revoked? I currently have a re-entry permit and I am considering applying for a commuter GC just to easy our tax situation (I have a US job with seasonal commuting)
2- Also, can my husband, a US citizen employed in Canada (where we currently live), file form 2555 on our JOINT tax return without affecting my REGULAR GC status (if I just keep the re-entry permit)? the form would only apply to him but return is joint.
3- Finally, does our son, a US citizen, need to comply with ACA/Obamacare if my husband (who doesn't have US healthcare, but has Canadian healthcare) files form 2555 to be exempt from it himself? I would have US healthcare since my US employer provides it.
Thanks in advance!
Re-entry permit vs. commuter green card tax implications
Moderator: Mark T Serbinski CA CPA
1. What income would you be considering eligible for 2555?
2. Of course. Almost all US citizens use 2555 while living abroad. No eefct on you.
3. Does your son have healthcare? In any event, foreign residents are absolved of that requirement, including you.
Can I ask how you suspect changing your GC status would change your tax situation? You will still be filing a 1040, lika all other US citizens living in Canada. Income eaned in US is not eligible for 2555 or 1116, and income earned in Canada is eleigible for either, regardless of GC or not.
I could see you switching to commuter if you live in Canada for immig reasons, but not for tax reasons.
2. Of course. Almost all US citizens use 2555 while living abroad. No eefct on you.
3. Does your son have healthcare? In any event, foreign residents are absolved of that requirement, including you.
Can I ask how you suspect changing your GC status would change your tax situation? You will still be filing a 1040, lika all other US citizens living in Canada. Income eaned in US is not eligible for 2555 or 1116, and income earned in Canada is eleigible for either, regardless of GC or not.
I could see you switching to commuter if you live in Canada for immig reasons, but not for tax reasons.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
[quote="nelsona"]
1. What income would you be considering eligible for 2555?
Only my husband's. My income is 100% US based.
2. Of course. Almost all US citizens use 2555 while living abroad. No eefct on you.
3. Does your son have healthcare? In any event, foreign residents are absolved of that requirement, including you.
My son has Canadian healthcare at the moment. I thought there were super strict requirements for ACA exemptions (number of days outside of US, etc). I also have Canadian healthcare.
Can I ask how you suspect changing your GC status would change your tax situation? You will still be filing a 1040, lika all other US citizens living in Canada. Income eaned in US is not eligible for 2555 or 1116, and income earned in Canada is eleigible for either, regardless of GC or not.
Yes, just wondering if it changes the situation of my husband filing a 2555 (and asking for an extension so he can qualify for it) would affect my regular GC status. That is all :)
Do you know if I also need to file Canadian taxes by the way?
I could see you switching to commuter if you live in Canada for immig reasons, but not for tax reasons.[/quote] Thanks so much!! I really appreciate it
1. What income would you be considering eligible for 2555?
Only my husband's. My income is 100% US based.
2. Of course. Almost all US citizens use 2555 while living abroad. No eefct on you.
3. Does your son have healthcare? In any event, foreign residents are absolved of that requirement, including you.
My son has Canadian healthcare at the moment. I thought there were super strict requirements for ACA exemptions (number of days outside of US, etc). I also have Canadian healthcare.
Can I ask how you suspect changing your GC status would change your tax situation? You will still be filing a 1040, lika all other US citizens living in Canada. Income eaned in US is not eligible for 2555 or 1116, and income earned in Canada is eleigible for either, regardless of GC or not.
Yes, just wondering if it changes the situation of my husband filing a 2555 (and asking for an extension so he can qualify for it) would affect my regular GC status. That is all :)
Do you know if I also need to file Canadian taxes by the way?
I could see you switching to commuter if you live in Canada for immig reasons, but not for tax reasons.[/quote] Thanks so much!! I really appreciate it
Please don't use the quote feature, sas you see it doesn't work, and I can read what I just wrote, no need to repeat it.
Any good answer as to why you would switch to commuter, other than pressure from border because of not living in US?
Any good answer as to why you would switch to commuter, other than pressure from border because of not living in US?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Sorry about the quote! I noticed it when I posted the reply.
Not really. I haven't even been told to switch at all, and I still have my US residence, job, bills, and plenty of ties in the US as to not get my GC revoked on that end. The only reason was because I was afraid that filing for an extension for taxes so my husband qualifies for the 2555 (and filing such 2555) in our joint return would then be seen as me claiming non permanent residence in the US and this affecting my GC status. Since it's a joint return.
My income of course would not qualify for either 2555 or 1116.
Not really. I haven't even been told to switch at all, and I still have my US residence, job, bills, and plenty of ties in the US as to not get my GC revoked on that end. The only reason was because I was afraid that filing for an extension for taxes so my husband qualifies for the 2555 (and filing such 2555) in our joint return would then be seen as me claiming non permanent residence in the US and this affecting my GC status. Since it's a joint return.
My income of course would not qualify for either 2555 or 1116.
You need to file in Canada as well., since you live in Canada. You get foreign tax credit on the final US tax on your US income, but that is about it.
Look at some threads for the IRS problems US filers living in Canda face with regard to foreign accounts, PFIC, FBAR, FATCA, FinCEN.
Look at some threads for the IRS problems US filers living in Canda face with regard to foreign accounts, PFIC, FBAR, FATCA, FinCEN.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Yeah, I have been reading some and I'm super overwhelmed!
So does this mean that I will most likely have to end up paying a tax in Canada? Is it pretty much them seeing how many taxes I paid in the US vs how many I would pay in Canada for the same income and then I pay the difference after tax deductions are applied? :(
We have no property or major investment accounts in either country. For the most part is just our incomes.
So, you think there is no need (unless USCIS asks me to) to get a commuter GC?
Thank you VERY much for all your replies!
So does this mean that I will most likely have to end up paying a tax in Canada? Is it pretty much them seeing how many taxes I paid in the US vs how many I would pay in Canada for the same income and then I pay the difference after tax deductions are applied? :(
We have no property or major investment accounts in either country. For the most part is just our incomes.
So, you think there is no need (unless USCIS asks me to) to get a commuter GC?
Thank you VERY much for all your replies!
Dear nelsona,
So upon reading a bit more I became aware of the "source of income" issue.
I am a full time exempt employee for a US based company. I get paid in the US (US bank account, etc). I do 90% of my work from home (Canada), but all my employment information is based on my US residence. I also need to commute to the US several times a year. Is my income foreign sourced?
I am already paying US federal taxes (no State taxes since my US state has no income tax) deducted from my paychecks.
Do I need to update my W-4 somehow? Or can I just continue to pay my federal taxes this way and then file form 1116 (is this even necessary?).
I am so confused about to do in order to comply with US and Canadian tax laws.
So upon reading a bit more I became aware of the "source of income" issue.
I am a full time exempt employee for a US based company. I get paid in the US (US bank account, etc). I do 90% of my work from home (Canada), but all my employment information is based on my US residence. I also need to commute to the US several times a year. Is my income foreign sourced?
I am already paying US federal taxes (no State taxes since my US state has no income tax) deducted from my paychecks.
Do I need to update my W-4 somehow? Or can I just continue to pay my federal taxes this way and then file form 1116 (is this even necessary?).
I am so confused about to do in order to comply with US and Canadian tax laws.
See, you live and work in canada. You should be on a Cdn payroll. You are not a commuter that crosses into US to work each day/week.
You and your employer should be paying Cdn payroll tax (CP/EI) and not FICA.
Most US companies try to get around this, and it ends up biting YOU the worker.
Tell them to put you on a Cdn payroll, or make you a contractor.
You and your employer should be paying Cdn payroll tax (CP/EI) and not FICA.
Most US companies try to get around this, and it ends up biting YOU the worker.
Tell them to put you on a Cdn payroll, or make you a contractor.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
I would think that both you and the firm would jump at you being a contractor (since that really is there only other choice).
They would no longer have the payroll tax and fringe benefits to pay (which mean little to Cdn residents), and you would then be able to be paid more directly, and would be able to expense/deduct your travel and home office expenses.
THAT would be a tax benefit.
They would no longer have the payroll tax and fringe benefits to pay (which mean little to Cdn residents), and you would then be able to be paid more directly, and would be able to expense/deduct your travel and home office expenses.
THAT would be a tax benefit.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Thanks for your insight!
So what happens now with all the wages I have earned so far and the taxes I have paid to the US? I WANT to be paying US Social security, not CPP, as I fully intend to move back and retire in the US. I also worry that being a contractor may be an issue as a green card holder.
This is all so confusing! I called CRA and spoke to a "special agent" who assured me that the way I'm doing my business in the US is fine, and to file a T2209 at the end of the year, paying the difference.
I also spoke to CIC who agreed, and directed me to their definition of "work":
http://www.cic.gc.ca/english/resources/ ... /about.asp
Which states this for a temporary resident (which I am for immigration purposes):
"What kind of activities are not considered to be "work"?"
"Work" is defined in the Regulations as an activity for which wages are paid or commission is earned, or that competes directly with activities of Canadian citizens or permanent residents in the Canadian labour market.
.[it is not considered work]: long distance (by telephone or internet) work done by a temporary resident whose employer is outside Canada and who is remunerated from outside Canada;
self-employment where the work to be done would have no real impact on the labour market, nor really provide an opportunity for Canadians. Examples include a U.S. farmer crossing the border to work on fields that he owns, or a miner coming to work on his own claim.
Ugh, I LOVE my job. I really do not want to give it up!
So what happens now with all the wages I have earned so far and the taxes I have paid to the US? I WANT to be paying US Social security, not CPP, as I fully intend to move back and retire in the US. I also worry that being a contractor may be an issue as a green card holder.
This is all so confusing! I called CRA and spoke to a "special agent" who assured me that the way I'm doing my business in the US is fine, and to file a T2209 at the end of the year, paying the difference.
I also spoke to CIC who agreed, and directed me to their definition of "work":
http://www.cic.gc.ca/english/resources/ ... /about.asp
Which states this for a temporary resident (which I am for immigration purposes):
"What kind of activities are not considered to be "work"?"
"Work" is defined in the Regulations as an activity for which wages are paid or commission is earned, or that competes directly with activities of Canadian citizens or permanent residents in the Canadian labour market.
.[it is not considered work]: long distance (by telephone or internet) work done by a temporary resident whose employer is outside Canada and who is remunerated from outside Canada;
self-employment where the work to be done would have no real impact on the labour market, nor really provide an opportunity for Canadians. Examples include a U.S. farmer crossing the border to work on fields that he owns, or a miner coming to work on his own claim.
Ugh, I LOVE my job. I really do not want to give it up!
If CRA bought off on it (btw, they never give correct or consistent info -- if you call back you will get a different answer) then not much I can say =, except watch for a nasty let in the next few years asking for back IE and CPP. Besides, if you give them even the least bit of misinformation, this will confuse them. You work in Canada, and should be paying EI and CPP, and so should the company. You haven't been "sent" to Canad tp work temporarily: you MOVED to Canada.
As to your GC, your living in Canada is the threat to GC. You don't live in US which is a requirement for GC, leaving for a year or more puts it in jeopardy, even yif you return to visit US every week.
Immigration-wise there is no problem, never was. I would have mentioned this if there was.
As to your GC, your living in Canada is the threat to GC. You don't live in US which is a requirement for GC, leaving for a year or more puts it in jeopardy, even yif you return to visit US every week.
Immigration-wise there is no problem, never was. I would have mentioned this if there was.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing