USC/Canadian PR working in the US-lots of tax ?s

[thermophile]

I have been a Canadian PR since Oct. 2005 through spouse sponsorship. Jan. 2006 I moved back to the US to finish up my PhD but my Canadian citizen husband has stayed in Canada. I was physically in Canada for 10 weeks last year and made a whopping $442 Canadian in that time. In the US I make $15,000 plus $5,000 in tuition. Last year I worked more in Canada and made less than $7000 US, so all of my US income was excluded when I filed my 2005 Canadian taxes. But this year if I filed Canadian exactly the same as I did last year I'd owe $1400. That's the back story, here's the questions:

1) Do I need to file Canadian taxes? if, no what impact would that have on my PR?

2) If I file Canadian, is there a way to deduct my US living expenses? We have to maintain both a Canadian and a US house-US house alone is $6000 of the $15000 that I made last year.

3) If I file Canadian, how do I deal with the $5000 of my income that is tuition? It shows up on my W2 as income, but I also get the T90 (I think that's the form number) that shows that I paid $5000 in tuition.

4) If I file Canadian, is it better for my husband and I to file together or seperatelly?

thanks

[nelsona]

1). Your PR status is not affected by whether or not you file in canada. You are onl;y required to be in canada 24 of each 60 month period to maintain your PR status.

However, your residential ties are what determine whether you need to file. Your husband, plus the fact that you returned frequently, amke you residnt and taxable on your world income.

2). No. You may be able to deduc some moving expenses, but not day-to-day living.
3). Tuition is deductible in canada.
4) Do you mean jointly in US? Since there is no joint filing in Canada. At your income level I don't see why you would file jointly in US, as this would mean reporting his income, and then deductiong/excluding it. Messy.

[thermophile]

thanks for the reply. I've just finished our US and state tax returns, now turning to Canadian. In the marital status box would I check Married or Separated? does it make any difference tax wise? I read the instructions and the way that I read it there is no way anyone would be "Separated" so I must be reading it wrong.

thanks

[thermophile]

another question. could I exclude 80% of my income using the overseas employment tax credit (t626)? The foreign tax credit doesn't help me because I get all of my income tax that was withheld back-yes I'm that poor.

[nelsona]

separated means legally separated.

If you and your employer (who must be Cdn) qualify, you can take OETC. The requirements to be outside Canada are quite stringent.