Can I be considered a Deemed Non Resident

[rinconns]

I had some questions here about OETC credit that Nelsona was kid enough to answer. But it lead me to a new question. So I though Id ask in a separate post

I'm a Cdn living and working in USA on a L1 work Visa
I have been working hear since Jan/2010.
I spend about two thirds of my time In USA, I have an American bank account, drivers license and credit card. I am paid on USA payroll

I still have a wife and children at home in NS. I have a home and other assets in Canada.

Can I become a deemed non resident for tax purposes?
I am considered by the USA as a resident alien

from CRA Website
Were you a deemed non-resident of Canada in 2011?

You may be a deemed non-resident of Canada for tax purposes if you were a resident of Canada in 2011, and you were also considered to be a resident of another country with which Canada has a tax treaty. You become a deemed non-resident of Canada when your ties with the other country are such that, under the tax treaty, you would be considered a resident of that other country. In this case, the same rules apply to you as to a non-resident of Canada (including the way you complete your return).



thanks

[nelsona]

The first criteria is are your considereed resdint of US.: yes, becasue you spend over 183 days a year.

The trickier question is whre are your ties.

Unfortunately, because you lkeep coming back to Canada, it is clear by your actions that you consider HOME to be canada. If your family visited you in US, thethat would e your home.

So, no, from what you describe, CRA would not consider your demmed non-resident.

The key is your constant travelling HOME to canada.

[rinconns]

thanks for the reply and great help

After talking with my employer I may have the option of incorporating and consulting as opposed to my current situation as an employee. I understand the tax right offs can be a huge benefit. But would this help or cause even more problems with the cross border issue. What it boils down to, Im making the same money I did when I worked in the CDN office, but my tax burden may be much higher due to the cross border issue. So if I cant mitigate the extra tax burden than I will just leave this job and go back to Canada.



thanks

[nelsona]

In the past I would have said this was the best solution, as you wouldremain Cdn resident, and NOT have to pay tax in US at all, especially self-employment tax.

However, under the new treaty, as soon as you spend more than 183 days in ANY 365-day period, you become taxcable in US (and remain taxbale in canada), so this is not the best solution.

You needto be making MUCH more as a contrator in US that as an employee, becuase you are ssuming all the overhead.