In U.S. on TN: non-res withholding tax on CDN investments

[Krakus]

Hi, I'm rather new to all this, so I could use a little bit of help, please. My question concerns Canada's 25% statutory withholding tax on Canadian investments for non-residents.

I'm a Canadian and began working in the U.S. in April of 2014 on a T.N.

I understand that under the U.S.'s substantial presence rules, where I'm in the U.S. for 183 days in the year, I'm deemed a U.S. resident for U.S. tax purposes.

However, because I'm in the U.S. under a 3-year TN, I'm also deemed a non-resident alien. And in fact, I'm a resident of Canada for Canadian tax purposes at the same time. My understanding is that this is because my stay in the U.S. is deemed only temporary in nature. Therefore I will need to file both Canadian and U.S. taxes (and pay the difference between the Canadian and U.S. tax amounts). I have no real residential ties to Canada, otherwise, but it does not matter. Is this all correct so far?

However, the problem is that I have very significant investments in Canada (mutual funds, mostly), and because my address changed to the U.S., my Canadian bank has asked me to fill out form NR301 (Declaration of Eligibility for Benefits Under a Tax Treaty for a Non-Resident Taxpayer) where I'm supposed to clarify what my country of residence for treaty purposes is. If I don't fill out the form, I'll be subject to a 25% withholding tax on my Canadian investments, apparently.

So should I fill out the form, provide my U.S. address, but state that I'm a Canadian for residency purposes? In which case I suppose I won't be subject to this withholding tax?

Thanks in advance for any observations.

[nelsona]

You are confusing your immigration status with your tax status. You became tax resident in April, even your TN status while *temporary* does not mean you live in Canada.

You will file a departure return for Canada based on your departure date in April, pay exit tax, and be done with Canada.

You should be moving your investments to US anyway. But by filling NR301, this will remove any withholding on cap gains, and just correct 15% tax on dividends.

Forget the *temporary* nature of your TN, you are a US tax resident and Cdn non-resident.