Canadian working as professor in a US university

liuska · Post by **liuska** » Thu Apr 03, 2014 3:01 am

Hello,

I am Canadian. In September 2013 I have started working as university instructor in the US. I am on a two-year contract for now.
Under the IRS explanations of what various tax treaty benefits are, I have found the following:
"Teachers, Professors, and Researchers

Under many income tax treaties, nonresident alien teachers or professors who temporarily visit the United States for the primary purpose of teaching at a university or other accredited educational institution are not subject to U.S. income tax on compensation received for teaching for the first 2 or 3 years after their arrival in the United States. Many treaties also provide an exemption for engaging in research. "

Question: how can I figure out if I am supposed to be paying US income tax or not?

The Canada-US treaty does not seem to have any specific words about professors and teachers.
http://www.irs.gov/pub/irs-prior/p597--2011.pdf
http://www.fin.gc.ca/treaties-conventio ... is-eng.asp

Thank you so much for your help!

nelsona · Post by **nelsona** » Thu Apr 03, 2014 9:50 am

The Cdn treaty does not have such a research clause.
I assume you are a TN? You are not exempt from US taxes. In fact, if you live in US, you are considered a US resident and a Cdn nn-resident, and should be filing as such -- unless you maintain SERIOUS residential ties in canada (like commuting regularly back to your Cdnm home and family.

liuska · Post by **liuska** » Thu Apr 03, 2014 11:21 am

Thank you so much for the quick answer. It is very helpful!

A question about US residency status: I have been in th US since September 1 2013, so not enough for 183 days. However, I keep living in the US and will do so for all 2014. By today's date I certainly have lived here for 183 days. Does this mean that I can file as US resident for 2013?

Another question: can you file as resident for both US and Canada in one year?

Thank you so much for help!

nelsona · Post by **nelsona** » Thu Apr 03, 2014 11:52 am

You can always file a US tax return as a resident (maening filing a 1040 and reporting world income). This is a treaty right for Cdns, but does not make you a US resident.

When leaving canada for US, days in the year don't matter for Cdn purpose. If you left on sept 1 2013, then you became non-resident on that day, and should file as such in Canada (departure tax, etc).

So, to answer your question. If you live in Canada, yes, you can file as resisnt in both countries. But if you meet the treaty definition of resident of US (living and working in US, like you) you cannot.
And, if you move near the end of the year, it is permissable to be, for that short period, file a non-resisnt return in US, and have departed canada. But it most cases, the 1040NR for non-resisnts is punative in its taxation structure vs. a full-fledged 1040, especially for married folk.

liuska · Post by **liuska** » Thu Apr 03, 2014 12:56 pm

thank you for reply! This is helpful. However, I could not find the treaty clause that would let me file taxes as US resident no matter what. It seems I still must meet substantial presence test.

Thank you!

nelsona · Post by **nelsona** » Thu Apr 03, 2014 1:19 pm

Non-discrimination.