Just found out - am I bankrupt now?

CdnAmerican · Post by **CdnAmerican** » Sat Feb 07, 2015 11:52 pm

Indeed. It's a credit you can get even if you don't have any payable tax. It doesn't seem fair to me, but neither does filling out dozens of forms when you don't owe any tax, so I guess overall it's a push.

mrbacon · Post by **mrbacon** » Sun Feb 08, 2015 7:15 am

its not a bad deal if I can learn how to do the forms on my own and get a significant amount of money back

its kind of like a part time job then

but, I really hate losing the TFSA. I was planning to make money in stocks there, and I think only in Canada it can grow 100% free.

mrbacon · Post by **mrbacon** » Sun Feb 08, 2015 9:04 am

ah, nevermind, the child must be a U.S citizen.

Wife isn't American, and I haven't lived in the U.S for 30+ years, so they don't instantly inherit citizenship as far as I understand.

voribo · Post by **voribo** » Sun Feb 08, 2015 1:41 pm

the children would need to be registered as USC born abroad.
http://toronto.usconsulate.gov/service/ ... broad.html

If your child was born on or after 11/14/86, and only one parent was a U.S. citizen at the time of the child's birth, the child may have acquired U.S. citizenship at birth if the U.S. citizen parent was physically present in the USA for periods totaling five years prior to the child's birth, at least two of which were after their 14th birthday.

but it doesn't sound like, based on your posts, that you meet the above criteria for presence.

Besides this child credit, being able to readily work in the US is the only financial benefit of being a USC that I have seen. And possibly eligible for medicade if a person worked there long enough, and moved back to the US.

The practical deterrents (reporting and taxation) to owning a TFSA, RESP and CDN mutual funds are all financial drawbacks. The reporting and taxation of these for compliant USC in Canada were not addressed in the FATCA intergovenmental agreement. Perhaps they could be with a repening of the tax treaty? Then USC resident in Canada could be more on par with USC living in the US who can buy US mutual funds, contribute to Roth IRAs and use 529 plans for tax free education savings.

exPenn · Post by **exPenn** » Sun Feb 08, 2015 1:53 pm

Why would anyone curse their Canadian born child with US citizenship, so that they could go through all the pain of US taxation when they grow up, all for the sake of a few dollars in tax credits?

mrbacon · Post by **mrbacon** » Sun Feb 08, 2015 2:12 pm

Thanks everyone. That pretty much convinces me to relinquish or renounce in some way.

exPenn · Post by **exPenn** » Sun Feb 08, 2015 4:01 pm

If you can prove that you relinquished your US citizenship sometime in the past, you may escape the clutches of the IRS without becoming compliant, but be aware that renouncing only rids you of your US citizenship for immigration purposes, not for taxation. If you file 3 years of back taxes and forms, you may become compliant but would have to continue filing annually. If you renounce, you have to file form 8854 with your final tax return, and demonstrate that you have filed for the previous 5 years. You also have to report your net worth. If this is more than $2M (US), you are subject to an "exit tax".

MikeRitchie · Post by **MikeRitchie** » Sun Feb 08, 2015 4:42 pm

"I also remember an Obama program from ?2009? which gave a similar credit; I think it's goal was to stimulate the economy after the stock market crash. Anyway, these typically do not offset the headache, but they are some small benefits."

Please don't give Obama any credit for this. It was the Bush stimulus in 2008 - I got a nice cheque from the IRS that year. Obama thinks that anyone with foreign income is a 1%er who is trying to hide something.

mrbacon · Post by **mrbacon** » Sun Feb 08, 2015 5:36 pm

Yes, Obama's the ####### responsible for all this mess.