Temporary Move to the US

[loom_weaver]

Hi there, I've been lurking this board for a bit and there is tons of useful information.

Here is my situation. I am Canadian and I work for a Canadian employer. We have a client in the US and I'll be moving there temporarily (1 year) as part of a contract. Then I plan to return to Canada.

I'll remain employed by the same Canadian company and I will continue to be paid my current salary to a Canadian bank account.

I have own no real estate (renting atm) but I do own a new car I intend to take down for this temporary stay.


Plan of Action:
Drive to Massachusetts from British Columbia, Canada on Feb. 16, 2007. Import my car into the States. Once down there I'll convert my drivers license, purchase insurance, and then register and plate the vehicle. Don't get me started on the rigamarole involved for a vehicle! ;)

Taxes...

For taxation year 2006 I'll file only a Canadian tax return.

For taxation year 2007 I'll file both Canadian and US tax returns.

In Feb. 2008 return to Canada. Export my car from the States, import into Canada.

For taxation year 2008 I'll file both Canadian and US tax returns.


For taxation am I approaching this correctly? Is this tax situation complicated enough that I should seek professional advice? I'm quite familiar with filing Canadian tax returns but I don't know the first thing about the US ones.

Thanks in advance!

[nelsona]

Your tax strategy would depend to some extent on your immigrstion status.

Will you be a TN of simply a B1?

A B1 must keep a residence in Canada. This is not abig problem, as this will allow you to clim the OETC, and exclude yourself from any FICA tax.

[loom_weaver]

Hi nelsona,

Thank you for the response. I'll be entering on a B-1 and qualify under after-sales service.

I have all necessary documentation (bank statements, letter from employer, address of family members) except I won't be keeping residence in Canada. I'm giving up the suite I'm renting and I'm planning on finding another place when I return.

[nelsona]

W ties, you may have difficuly crossing the border, but I'll leave that with you. That is an immigration matter.

I would not be going for Cdn tax non-residency, as you will be able to take advantage of OETC, which will lower your Cdn tax bill. You should not have to pay for SS andmedicare (especially since you will continue to be paid by Cdn employer).

[loom_weaver]

Hmm, interesting.

I've also read on the web that long term B-1s and extending them to a year is a rarity. I'll look into applying under a TN-1 even though it sounds that the tax implications aren't quite as favourable.