Hello,
First, a little background: I've move from Canada to the States on a TN right around the end of 2013 (November I believe). Back then I was totally oblivious and filed a 1040 because that was the easiest thing to do using Turbo Tax, as well as a Canadian return for 2013 even though that was clearly wrong since I was not a resident. The CRA/IRS did not seem to care though and I did manage to avoid double taxation by CRA by reporting foreign tax credits. Still confused why I wasn't asked to correct this.
For 2014, I've done a little bit of homework and here's my situation.
* I have my 2 W-2's (from 2 different employers)
* Since I've worked remotely from my home in Canada the majority of the time, I've managed to narrowly escape being a resident in the states (Using the 1 + 1/3 + 1/6 formula).
* I've opened an RRSP and a TFSA in Canada
From what I understand, I should be filing 1040NR to the IRS and proceeding as usual in Canada. However, it seems like there's no easy way to do this (e.g. using something like Turbo Tax). Does it make sense to do what I've done for 2013 and just file 1040 in the states to save myself the headache? What about state taxes? I've worked in 2 different states in 2014 (CA and NJ), does that make a difference?
Thank you.
TN Visa non resident in the USA
Moderator: Mark T Serbinski CA CPA
These statements are assuming the general case and this will be a very general guess.
If you've lived more than half a year in the US for 2014 you're very likely a resident and need to file 1040.
In 2013 you should have filed 1040NR that way you could have escaped reporting Canadian income to the US. In Canada you likely didn't have to report any US income after you left (non-resident), credits need to be prorated but as long as you filled in the departure date Turbotax Canada would handle it for you.
For all the years you filed 1040 check if you are subject to FBAR/8938 if you met the thresholds. Did you move back? if not opening up the RRSP and TFSA was opening a can of pain on the US tax return (see 3520/A). If you're not a resident of Canada and contributed to the TFSA you're not eligible and you might be getting the 1%/month penalty for over-contribution.
Rules on state returns depend on the states in question.
If you've lived more than half a year in the US for 2014 you're very likely a resident and need to file 1040.
In 2013 you should have filed 1040NR that way you could have escaped reporting Canadian income to the US. In Canada you likely didn't have to report any US income after you left (non-resident), credits need to be prorated but as long as you filled in the departure date Turbotax Canada would handle it for you.
For all the years you filed 1040 check if you are subject to FBAR/8938 if you met the thresholds. Did you move back? if not opening up the RRSP and TFSA was opening a can of pain on the US tax return (see 3520/A). If you're not a resident of Canada and contributed to the TFSA you're not eligible and you might be getting the 1%/month penalty for over-contribution.
Rules on state returns depend on the states in question.
Colinc,
I've lived in the states for less than 6 months (around a month or two less).
I understand that I should have filed a 1040NR but I did not. I've only ever filed a 1040 once as 2013 was the first year I've worked in the states. There seems to have been no consequences to that...
I did end up moving back to Canada and I'm certain that I'm not, and was never a US resident according to the presence test [1]. I'm referring to both 2013 and 2014 here.
Thanks for the heads up regarding the TFSA/RSP stuff. But given that I am (and always have been) a Canadian resident this stuff shouldn't apply?!
So it looks like I have to file 540NR for CA and NJ-1040NR for NJ as well.
I've lived in the states for less than 6 months (around a month or two less).
I understand that I should have filed a 1040NR but I did not. I've only ever filed a 1040 once as 2013 was the first year I've worked in the states. There seems to have been no consequences to that...
I did end up moving back to Canada and I'm certain that I'm not, and was never a US resident according to the presence test [1]. I'm referring to both 2013 and 2014 here.
Thanks for the heads up regarding the TFSA/RSP stuff. But given that I am (and always have been) a Canadian resident this stuff shouldn't apply?!
So it looks like I have to file 540NR for CA and NJ-1040NR for NJ as well.
nelsona,
Yeah that didn't make sense. To explain further, the nature of my job is that I can do it from anywhere I want (work in IT). I would work for some time at my employer's office in the states (around 120 days for 2014 for example) but otherwise I'd live and work in my home in Canada.
I hope that's clearer.
Yeah that didn't make sense. To explain further, the nature of my job is that I can do it from anywhere I want (work in IT). I would work for some time at my employer's office in the states (around 120 days for 2014 for example) but otherwise I'd live and work in my home in Canada.
I hope that's clearer.