Tax Residency & ITIN Questions: Canada & USA – Need Advice!

[hgtpfl]

Hi everyone,

I need some guidance on my tax residency status in Canada and filing obligations in the USA. My goal is to ensure that CRA considers me a non-resident for 2024, while in the USA, I plan to file Married Filing Jointly (MFJ) to claim my daughter for tax credits.

My Situation:
I moved from Canada to the USA on January 14, 2024, under a TN visa.

I returned to Canada only once from October 26, 2024, to November 5, 2024.

I still have a bank account in Canada and previous tax filings there, but I have not worked in Canada since moving.

My wife and I are legally married, but we separated after I moved to the USA. She and our 8-year-old daughter live in Edmonton, Canada.

I have continued financially supporting them from the USA, covering rent, daycare, and other expenses.

My Gross Annual Salary is $87,500 USD, and my W-2 reported wages are $78,052.96 USD.

The current exchange rate (as of today) is 1 USD = 1.43 CAD, meaning:

Gross Salary: $87,500 USD = $125,125 CAD
W-2 Wages: $78,052.96 USD = $111,615 CAD

Tax Filing Goals:

In the USA: I plan to file Married Filing Jointly (MFJ) to claim my daughter as a dependent for tax credits.

In Canada: I plan to file as separated to avoid being considered a Canadian resident and prevent the CRA from taxing my US income.

Questions:

Will the CRA still consider me a Canadian tax resident for 2024 due to my financial ties, even though I have lived in the USA most of the year?

What steps should I take to ensure that I am considered a non-resident for Canadian tax purposes? (E.g., filing a departure return, closing accounts, etc.)

For my Canadian tax return:

Should I report my US income as foreign income in Canada?

If so, should I declare the Gross Salary ($87,500 USD) or just the W-2 reported wages ($78,052.96 USD)?

For my US tax return:

Can I apply for an ITIN for my wife and daughter to file jointly and claim dependent credits?

How difficult is the ITIN process if they live in Canada and my wife may not cooperate?

Any insights or advice from those familiar with cross-border taxation would be greatly appreciated!

Thanks in advance!

[nelsona]

You ae considered to have become a deemed non-resident with a departure date from Canada on January 14, 2024. No need to close any accounts. You will be considered non-resident.

For 2024, you will file as an EMIGRANT, reporting only your income from BEFORE that date, along with any other requirements oof a departure return (deemed disposition, etc). No US wages should be reported.

For US, you will file a full year MFJ 1040, reporting ALL income, and claiming any deduction or credit that any other US tax resident would claim. You can request ITIN along with filing your 1040. It has become more and more difficult to get ITINs in recent years, but it is still possible.

Your child might not qualify for child tax credit (the rules change often) since she is neither a US citizen nor resident. If not, she may instead be eligible for the Addition child tax credit. I'll let you figure that out.

[ND]

To file MFJ, your return must include an election that your NRA legal wife signs, in addition to her signing the 1040. To apply for ITINs you will need the passports of your wife and child and for wife to sign W-7.
see:
https://apps.irs.gov/app/vita/content/g ... credit.pdf
https://www.hrblock.com/tax-center/fili ... ax-credit/
https://www.irs.gov/newsroom/understand ... dependents
https://turbotax.intuit.com/tax-tips/fa ... /L8LODbx94