Resident or Non-resident tax filing?

[Lola]

I am currently on a J-1 visa (since July 2010) and will be in the US for 3-4 years as a trainee making about $50,000/year.

I understand that I am a non-resident of the US with this visa; however, for income tax purposes would I file as a non-resident or a resident? I will be in the US for more than 183 days in 2010 (partly on J-1 visa but before I got J-1 visa as well). I also meet the substantial presence test because I was in the US for the majority of 2008 and 2009 doing rotations (had no income in US) but was not on a J-1 or F-1 visa for those 2 years, I believe I was on a B visa. I did file taxes in Canada for 2008 and 2009.

If I file 2010 taxes as a resident of the US do I have to file 2010 taxes in Canada as well? I still have investments in Canada and intend to return when I am done training (not doing a visa waiver).

Is it true if I file taxes as a nonresident I have to file a 1040NR for the US and a regular Canadian tax return for my province? And the tax that I have already paid will go towards my return?

Thanks for any help.

[nelsona]

You are non-resident of US if you are on J visa. Your days in J do not count towrds SPT. You will file a 1040NR in US.

You must still file in canada, as you have not established tax residency outside Canada, and cannot do so on J.

If the math works out that you meet SPT using days over the 3 years, but not 183 days in this year, then you submit a Form 8840 with your 1040NR, which establishes that you live in Canada.

The US tax you pay on your 1040NR will be credited to your on your Cdn return.