nelsona,
I haven't been in contact w/ the Canadian (QPP) authorities for many, many years. I will have to contact them when time comes and ask them to track my file down. So, unfortunately, I don't have any data/info available.
But thanks a lot for your tremendous help. I very much appreciate it.
worldcitizen
Retirement
Moderator: Mark T Serbinski CA CPA
Nelson,
For a US/Canada dual citizen, having worked in Canada 20 yrs and another 20 yrs in the US, with RRSP/401K and CPP/OAS/SS pensions only on retirement, is it feasible to file tax in both countries as resident, claiming credit of tax of one for the other. Reason of this may be by being non-resident one can lose some benefits. Thanks.
For a US/Canada dual citizen, having worked in Canada 20 yrs and another 20 yrs in the US, with RRSP/401K and CPP/OAS/SS pensions only on retirement, is it feasible to file tax in both countries as resident, claiming credit of tax of one for the other. Reason of this may be by being non-resident one can lose some benefits. Thanks.
Not sure what you are getting at. You will have to enlighten me.
A US citizen files the same tax return regardless of where he lives, so obviously there is no choice to file as a resident or non-resident, other than for the foreign earned income exclusion, which requires absence from US.
Any foreign tax credits on 1040 would be based on source of income, not residence.
A Cdn non-resident cannot file a resident return. If one is a resident of US, Canada will within a year or two, determine that one is non-resident, and insist on departure procdures being followedc.
A non-resident can elect to file a 217 return on which they essentiailly use all world income to determine if this results in a lower tax rate for certain Cdn pension-type income that the flat NR tax that CRA collects.
There would be no foreign tax credits granted, since the election does not permit this, and technically, you are not reporting foreign income (just using it to come up with a tax rate on your Cdn income).
Now, if you are to file in such a way that you are pretending to spend xx days in one country when you are not, this is not a tax issue. This would be an issue of fraudulently protraying your residence or presence in one country or the other for obatining a certain benefit that you are not otherwise entitled to.
Provincial healthcare is the obvious benefit that springs to mind, and the provinces have been pretty consistent, and aggressive at detecting and denying false claims and fraudulent claimants. There are others.
But, of course, I'm SURE that is not what you are contemplating doing.
So, again, what is your point here.
A US citizen files the same tax return regardless of where he lives, so obviously there is no choice to file as a resident or non-resident, other than for the foreign earned income exclusion, which requires absence from US.
Any foreign tax credits on 1040 would be based on source of income, not residence.
A Cdn non-resident cannot file a resident return. If one is a resident of US, Canada will within a year or two, determine that one is non-resident, and insist on departure procdures being followedc.
A non-resident can elect to file a 217 return on which they essentiailly use all world income to determine if this results in a lower tax rate for certain Cdn pension-type income that the flat NR tax that CRA collects.
There would be no foreign tax credits granted, since the election does not permit this, and technically, you are not reporting foreign income (just using it to come up with a tax rate on your Cdn income).
Now, if you are to file in such a way that you are pretending to spend xx days in one country when you are not, this is not a tax issue. This would be an issue of fraudulently protraying your residence or presence in one country or the other for obatining a certain benefit that you are not otherwise entitled to.
Provincial healthcare is the obvious benefit that springs to mind, and the provinces have been pretty consistent, and aggressive at detecting and denying false claims and fraudulent claimants. There are others.
But, of course, I'm SURE that is not what you are contemplating doing.
So, again, what is your point here.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Nelson,
US presence of a US/Cdn dual citizen for 183+ days makes him/her a US person with obligation of filing a US tax on world income. That person may also have a second home and family links in Canada, making him/her file Cdn tax as well. I am not sure but I believe non-resident US tax Standard Deduction is not allowed. Further, 401K withdrawals for non-residents takes 20% tax at source which may be more than otherwise due, etc. For a retired person with roughly half time in Canada and other half in US, such a consideration may be important.
My question was pertaining to such a situation. Purpose of my visiting this forum is to educate myself on the subject matter. I have a long way to retire.
US presence of a US/Cdn dual citizen for 183+ days makes him/her a US person with obligation of filing a US tax on world income. That person may also have a second home and family links in Canada, making him/her file Cdn tax as well. I am not sure but I believe non-resident US tax Standard Deduction is not allowed. Further, 401K withdrawals for non-residents takes 20% tax at source which may be more than otherwise due, etc. For a retired person with roughly half time in Canada and other half in US, such a consideration may be important.
My question was pertaining to such a situation. Purpose of my visiting this forum is to educate myself on the subject matter. I have a long way to retire.
Jaspal, you are missing the fact that US citizen, dual or not already has an obligation to file a full US tax return, reporting world income, regardless of the number of days he spends in US. And he is entitled to file (just as a Cdn citizen would be entitled by the way) to all the deduction and credits that he would have as one living in US.
Surely you were aware of this and merely forgot.
Moreover, even if he is resident fiull-ytime in Canada, the US citizen is not subject, not allowed to take the treaty tax rate provisons on his US-sourced income. It is merely reported on his tax return and tax paid then. He is not subject to non-resident withholding, so there is no danger of any extra withholding
Surely you were aware of this and merely forgot.
Moreover, even if he is resident fiull-ytime in Canada, the US citizen is not subject, not allowed to take the treaty tax rate provisons on his US-sourced income. It is merely reported on his tax return and tax paid then. He is not subject to non-resident withholding, so there is no danger of any extra withholding
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
So, the issue is not US tax or witholding -- that is a constant and a given, the issue is days spent in canada to obtain Cdn benefit, versus paying Cdn tax on their world income.
These absolutely go together. If you spend sufficient time in Canada to get health benefits, then you are in fact spending sufficent time to be taxed on world wide income. If you are not spending enough time in Canada to be taxed on world income, then neither are you meeting the requirements for health benefits.
There are 1000's of retirement-age Cdns who have the right to live elsewhere than Canada for more than 180 days per year and avoid Cdn taxation ofn world income, but they know that doing so will cost them their healthcare coverage. Same applied for dual US/Cdn citizen.
So, going back to your original question: " is it feasible to file tax in both countries as resident..?" Yes, by living in Canada 183+ days per year.
These absolutely go together. If you spend sufficient time in Canada to get health benefits, then you are in fact spending sufficent time to be taxed on world wide income. If you are not spending enough time in Canada to be taxed on world income, then neither are you meeting the requirements for health benefits.
There are 1000's of retirement-age Cdns who have the right to live elsewhere than Canada for more than 180 days per year and avoid Cdn taxation ofn world income, but they know that doing so will cost them their healthcare coverage. Same applied for dual US/Cdn citizen.
So, going back to your original question: " is it feasible to file tax in both countries as resident..?" Yes, by living in Canada 183+ days per year.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelson, Never thought of healthcare element, but now I am thinking about it. I am told that Provincial healthcare is too little or not available for use in US, and same is the case for Medicare for being not good in Canada. So for people who want to be on either side will need both, pay at least Part B, and spend 183+ days in Canada (and pay tax in Canada)
Is my understanding correct that non-resdent US tax filers do not get Standard Deduction?
Is my understanding correct that non-resdent US tax filers do not get Standard Deduction?
"Is my understanding correct that non-resdent US tax filers do not get Standard Deduction?"
I already said this was INCORRECT. A US citizen outside US has all the rights that a US citizen in US has in terms of filing options, deductions, and credits.
In fact, the non-resident has MORE, because of the foreign earned income tax credit.
What would have led you to think otherwise?
And has to healthcare, A person who qualifies for Cdn provincial health covergae would not bother with anhing but the minimum Medicae coverage. He would instead obtain travel medical insurance from Cdn firm, which runs about $800 for a couple for the entire year. That insurance and Medicare Part A is more than you will need when you are visiting US.
I already said this was INCORRECT. A US citizen outside US has all the rights that a US citizen in US has in terms of filing options, deductions, and credits.
In fact, the non-resident has MORE, because of the foreign earned income tax credit.
What would have led you to think otherwise?
And has to healthcare, A person who qualifies for Cdn provincial health covergae would not bother with anhing but the minimum Medicae coverage. He would instead obtain travel medical insurance from Cdn firm, which runs about $800 for a couple for the entire year. That insurance and Medicare Part A is more than you will need when you are visiting US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelson,
Thanks. This info is a great for advance planning for future years. I don't remember where I got the impression about Standard Deduction for non-residents.
From your comment about people living and paying tax in Canada for getting health benefit, although they could live elsewhere, suggests that benefit is worth the extra tax. One gets CPP/OAS (based on Canadian work/residency) even while living in the US. I guess one qualifies for provincial health benefit even if not living in Canada for 183+ days, but filing Canadian tax by virtue of substantial Canadian connections (and an address).
Thanks. This info is a great for advance planning for future years. I don't remember where I got the impression about Standard Deduction for non-residents.
From your comment about people living and paying tax in Canada for getting health benefit, although they could live elsewhere, suggests that benefit is worth the extra tax. One gets CPP/OAS (based on Canadian work/residency) even while living in the US. I guess one qualifies for provincial health benefit even if not living in Canada for 183+ days, but filing Canadian tax by virtue of substantial Canadian connections (and an address).
"I guess one qualifies for provincial health benefit even if not living in Canada for 183+ days, but filing Canadian tax by virtue of substantial Canadian connections (and an address)."
NO! That is what I've been stressing. You need BOTH physical presence (183 days, 153 in ontario) AND Cdn tax residence to qualify for Provincial health coverage. Filing a residential return and thus claiming that you meet physical presence for medical is exactly the fraud I'm referring to. Ties are not enough. Nights in Canada are what count.
NO! That is what I've been stressing. You need BOTH physical presence (183 days, 153 in ontario) AND Cdn tax residence to qualify for Provincial health coverage. Filing a residential return and thus claiming that you meet physical presence for medical is exactly the fraud I'm referring to. Ties are not enough. Nights in Canada are what count.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Good info for future planning. Thanks. Bottom line is if one decides to live and pay tax in Canada (and use provincial health care), spend 183+ nights in Canada, and file non-res US tax. For low income earners, if 20% US tax deducted at source on 401K is too much, is there any way to get it reduced?
Jaspal, are you reading what I'm posting? There is NO SUCH THING as "non-Res US tax" if you are a US citizen!!
Please re-read my repeated answers to this question.
Besides, you can rest assured that you will be paying MUCH more than 20% in canada on your US income, so even if you had 20% withheld (which you would whether living in US or not), and even if that was your final US tax (which it will not be), your Cdn tax will still be higher.
You really are missing many of the points I am answering here, which is puzzling since you are the one asking these very specific questions.
Please pay attention to the actual answers. You are wasting my time.
Please re-read my repeated answers to this question.
Besides, you can rest assured that you will be paying MUCH more than 20% in canada on your US income, so even if you had 20% withheld (which you would whether living in US or not), and even if that was your final US tax (which it will not be), your Cdn tax will still be higher.
You really are missing many of the points I am answering here, which is puzzling since you are the one asking these very specific questions.
Please pay attention to the actual answers. You are wasting my time.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelson, I have re-read your posts. I am now far more clear. Sorry for not reading your posts in full earlier. I have been watching your valuable US/Cdn tax related answers to other posters for over 10 yrs. Well, I'll think about my issues when I get closer to my retirement. Hope you are not retired by then :-) Best...
Nelson, It is not a retirement question but relates to the above cross-border disscussion.
A Canadian with a home/family in Canada works in the US, commutes weekly, stays in the US in a hotel or temp accomodation, returns to Canada Friday night and gets back to the US Sunday night week after week, pays US taxes, but also files Canadian tax by virtue of ties with Canada. Will it be illegal for him to use provincial healthcare on weekends in Canada? As per your explanations above, yes. Will that not be odd?
And one day he sells his home and moves permanently to the US. Will it be treated as a realestate transaction by a non-resident with taxable gains?
A Canadian with a home/family in Canada works in the US, commutes weekly, stays in the US in a hotel or temp accomodation, returns to Canada Friday night and gets back to the US Sunday night week after week, pays US taxes, but also files Canadian tax by virtue of ties with Canada. Will it be illegal for him to use provincial healthcare on weekends in Canada? As per your explanations above, yes. Will that not be odd?
And one day he sells his home and moves permanently to the US. Will it be treated as a realestate transaction by a non-resident with taxable gains?
Jaspal,
You are mixing up several issues that have different standards and applications. I'll entertain this post, but
Nights in canada is how both immigration and provincial healthcare classify commuters. So, your nights in canada have to exceed the requirement for your province (183, or 212) in any 365-day period or your coverage is in jeopardy. after all, even if you spend more time in another province for longer than the alloted time, you can lose your coverage in the original province, so it should not surprise one if coverage was lost if leaving the country excessively.
Now, some provinces allow you -- IN ADVANCE -- to notify them about one's particular situation that will cause one be absent above the limit, and they can allow you to keep your coverage active.
How one lives, as oppossesed to nights spent comes into play only for tax purposes.
So in the fist scenario you describe, whether or not the commuter had a hotel room in US, they would remain Cdn tax resident absolutely, but if they spent 200 nigts in that hotel, they could lose helth coverage. If they had shouse in US, but only spent 180 nights there, they would remain Cdn resident, and keep healthcare. The fact that the commuter "pays US tax" is not really an issue. His wages while in US has to be taxed in US regardless of where he lives. Spending only friday and saturday night in Canada is insufficnet to keep healthcare. adding sunday night however, and
When a person sells their former home, the criteria for tax-free status is (a) was it their only residence and (b) were they a Cdn tax resident. It has to be both, or some or all of the gains will be taxable.
I tink I'm going to leave this thread now, as you are simply dreaminup with scenarios that are unlikley to occur. Come back when you are about to enter these situations.
You are mixing up several issues that have different standards and applications. I'll entertain this post, but
Nights in canada is how both immigration and provincial healthcare classify commuters. So, your nights in canada have to exceed the requirement for your province (183, or 212) in any 365-day period or your coverage is in jeopardy. after all, even if you spend more time in another province for longer than the alloted time, you can lose your coverage in the original province, so it should not surprise one if coverage was lost if leaving the country excessively.
Now, some provinces allow you -- IN ADVANCE -- to notify them about one's particular situation that will cause one be absent above the limit, and they can allow you to keep your coverage active.
How one lives, as oppossesed to nights spent comes into play only for tax purposes.
So in the fist scenario you describe, whether or not the commuter had a hotel room in US, they would remain Cdn tax resident absolutely, but if they spent 200 nigts in that hotel, they could lose helth coverage. If they had shouse in US, but only spent 180 nights there, they would remain Cdn resident, and keep healthcare. The fact that the commuter "pays US tax" is not really an issue. His wages while in US has to be taxed in US regardless of where he lives. Spending only friday and saturday night in Canada is insufficnet to keep healthcare. adding sunday night however, and
When a person sells their former home, the criteria for tax-free status is (a) was it their only residence and (b) were they a Cdn tax resident. It has to be both, or some or all of the gains will be taxable.
I tink I'm going to leave this thread now, as you are simply dreaminup with scenarios that are unlikley to occur. Come back when you are about to enter these situations.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing