Hi,
Me and my wife will be moving to the US on December 7th 2024. All significant ties to Canada will be cut (except a couple of bank accounts / investment accounts) so I know Dec 7th can be the last day of tax residence in Canada. For the US I will be on employment immediately, so will get a salary for 20 days of December.
Come the tax filing in early 2025, I will file in Canada as emigrant with date of 7th December. For the US although there will be employment income of 20 days I do not meet SPT as < 31 days in US in 2024. Will I file Form 1040-NR for the US? If I file as a non-resident in the US, then won't Canada consider my emigration date as 31st December 2024 based on the following guideline:
When you leave Canada to settle in another country, you usually become a non-resident of Canada for income tax purposes on the latest of:
the date you leave Canada
the date your spouse or common-law partner and dependants leave Canada
the date you become a resident of the country you settle in
What I am trying to say is, since I will not be considered tax resident in the US for 2024 (and assuming the residence date will be 1st Jan 2025?) will Canada not treat 31st Dec 2024 as emigration date and tax the 20 days of salary in the US?
Resident Status for 2024
Moderator: Mark T Serbinski CA CPA
Re: Resident Status for 2024
You will be a resident of US on December 7th. The fact that you won't have to file 1040, but rather a 1040NR is simply because you will not have been resident "long enough", but you will be resident.
CRA accepts in the emigrant year that you may not meet all the requirements of tax residency in the other country, but -- especially for a treaty country -- as long as you act like a resident of the new country (and that country's tax treaty allows you to establish tax residency -- the US does), you are fine. This is their regular practice, so do not worry about it. Declare your departure date on the date you physically move to US, and file a 1040NR following the rules for that form.
Just so you know, you technically would not become a US tax resident (ie. meet SPT) until mid-June 2025. Having to report income to Canada until that date would not make any sense.
CRA accepts in the emigrant year that you may not meet all the requirements of tax residency in the other country, but -- especially for a treaty country -- as long as you act like a resident of the new country (and that country's tax treaty allows you to establish tax residency -- the US does), you are fine. This is their regular practice, so do not worry about it. Declare your departure date on the date you physically move to US, and file a 1040NR following the rules for that form.
Just so you know, you technically would not become a US tax resident (ie. meet SPT) until mid-June 2025. Having to report income to Canada until that date would not make any sense.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best