Canadian Tax Return for New US Resident

Donnie · Post by **Donnie** » Wed Mar 15, 2006 5:16 pm

My husband, a Canadian citizen, moved to the US last July and we were married the same month. I am a US citizen and I have never lived or worked in Canada.

We have already filed a joint US tax return. My question is about the Canadian tax return that he needs to file. He was not employed last year while in Canada. However, he did receive employment benefits and he has his 2005 T4E statement. Since he is now married, do we need to file a joint Canadian return or does he file singly?

Thanks for any help.

nelsona · Post by **nelsona** » Wed Mar 15, 2006 7:09 pm

If you filed a joint return in US, you have to have included that income on your joint return.

You should also have included the tax owed in Canada as a credit, so that should tell you he (but not you) needs to do a Cdn "departure" return, with a departure date of dd/06/2005. This will determine his final Cdn tax on this income, and you will then bea ble to correct your 1040.

The "Emigrant Guide" from CRA will be his best source.

Donnie · Post by **Donnie** » Wed Mar 15, 2006 8:04 pm

Thanks. I will read the Emigrant Guide. We did not report his Canadian employment benefits income on the US tax return. I guess we will have to file an amended return.

Interestingly, neither our accountant here nor the accountant in Canada has any experience with correct filing procedure in this case. I expected them to inform us and prepare the returns correctly. If it wasn't for this forum, we would have filed incorrectly.

Thank you.

nelsona · Post by **nelsona** » Wed Mar 15, 2006 10:43 pm

Your first mistake was to not use an accountant who would file ALL your returns.

This is a prerequisite for correct filing

nelsona · Post by **nelsona** » Thu Mar 16, 2006 6:15 am

... and you DID file incorrectly.

Donnie · Post by **Donnie** » Fri Mar 17, 2006 4:32 pm

nelsona, can you reference a specific source/publication, etc, that would show that the US tax return was filed incorrectly? I have checked the IRS website and cannot find specific information regarding this issue - Canadian employment benefits received before becoming a US resident.

The Emigrant Guide on the CRA was helpful regarding the Canadian tax return but I'm trying to get similar information as it relates to the US tax return. IRS Publication 597 (Information on the US-Canada Income Tax Treaty) and Publication 519 (U.S. Tax Guide for Aliens) do not address this issue.

Thanks

nelsona · Post by **nelsona** » Fri Mar 17, 2006 11:55 pm

When you filed a joint 1040 return, you commited to reporting all worldwide income for the year, before and after arrival. That is the trade-off for filing joint.

You fall completely under the rules of the 1040, not any non-resident options. Your guide is the 1040 guide. The only excludable income is WAGES earned before arrival, via Form 2555. EI is not eligible for this exclusion.