Canadian in US on H4 going back to Canada for summer job

canuck · Post by **canuck** » Sat Mar 04, 2006 1:42 pm

I am a Canadian, living and working in the US on H1B since March 2004. My wife is in H4 status and going to college.

My wife would like to go back to Canada to work over the summer. How will this impact our 2006 tax return? I'm thinking the following:

-We continue to file as US tax residents, declaring foreign income & taxes paid
-File a non-resident return to Canada for my wife's summer job only

I'm assuming we wont lose our tax residency status in US with her going up there for a couple months? When we first moved down here, I was in the US working for about 4 months before she quit her job in Canada & followed. We had to declare my US income on our Canadian return for those 4 months & I don't want to face a similar situation this time.

nelsona · Post by **nelsona** » Sat Mar 04, 2006 6:16 pm

As you surmise, a job in Canada is NOT necessarily a residential tie, so does not necessarily mean that you will revert to Cdn residency.

So long as she does not forge strong residential ties (who will she stay with?) you will be fine.

Remember too, that if she makes less than C$10K in wages in the year, she does not have to pay Cdn tax on those wages (she would report on an NR return and then deduct the wages on line 256, for a zero return)

canuck · Post by **canuck** » Sat Mar 04, 2006 7:55 pm

Thanks for confirming that, Nelson. She would probably stay with her mother or with friends... definitely not strong residential ties.

nelsona · Post by **nelsona** » Mon Mar 06, 2006 7:58 am

I would avoid having her stay in Canada more than 183 days, as well.

Not an insurmountable problem, but one to avoid.