Worked part year US/part year CAN (TN Visa)

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lukecarson
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Joined: Tue Feb 26, 2019 12:10 pm

Worked part year US/part year CAN (TN Visa)

Post by lukecarson » Tue Feb 26, 2019 12:16 pm

Hi all,

Looking for some advice for my 2018 tax situation. In 2017, I filed as a US resident (worked on a TN Visa) and completed this on my own. In 2018, I left the US (AFTER 183 days being in the country) and returned back to Canada. I have income from both countries, as I started working in Canada late August. I would like to file as a US resident again this year, due to passing the substantial presence test (though I know this doesn't guarantee anything). I do not have a spouse, house, or dependants. I moved back in with my parents. I'm wondering how much this would actually tie me to Canada...I do have things like bank acct, credit card, and opened a TFSA in November (was actually at a loss for the year ending 2018).

So my question: does it make sense to file as a US resident for 2018? If so, do I report global income on US forms and only Canadian income on my Canadian forms? How to foreign tax credits come into play here? The only forms I have are my W2 from US and T4 from Canada. I'm sorry for what is probably a simple answer, most others' situations are a tad more complex and I'm afraid mine might be so simple that I can't find an answer.

Cheers all.

nelsona
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Re: Worked part year US/part year CAN (TN Visa)

Post by nelsona » Tue Feb 26, 2019 1:11 pm

Whether you passed SPT of not, in the year you leave US, you are allowed to file as a full year resident. it might help you because of the standard deduction in US for 1040, which is not available otherwise.

You would report world income on 1040 forentire year, and world income for on T1, but only for the time after you moved back.

There would be no tax credits given on your Cdn return.
For your US return, you would likely benefit form using Formn 2555 to exclude your Cdn wages, instead of form 1116 for tax credit. You can only file 2555 once you have been out of US for a year, so you will only file your 1040 in August (which is fine, you probably don't owe taxes in US for 2018).

You would use 1116 for any other Cdn income you had to report on your 1040, to get credit for any Cdn taxes paid on that income.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

lukecarson
Posts: 3
Joined: Tue Feb 26, 2019 12:10 pm

Re: Worked part year US/part year CAN (TN Visa)

Post by lukecarson » Tue Feb 26, 2019 5:31 pm

Nelson,

Thank you so much for your prompt reply. I will take into consideration what you said about form 2055; some new information for me so a bit of reading and research to come.

lukecarson
Posts: 3
Joined: Tue Feb 26, 2019 12:10 pm

Re: Worked part year US/part year CAN (TN Visa)

Post by lukecarson » Wed Feb 27, 2019 1:05 pm

Oh one more thing, might be a dumb question but: would I be filing as a US resident and a Canadian non-resident? Or do I file my Canadian taxes regularly? I'm not sure how a "dual" residency works. I got off the phone with the CRA and the gentleman was said I just file Canadian leaving off US income, and I further asked if I file as non-resident and he didn't seem to have an answer...seemed very nonchalant.

nelsona
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Location: Nowhere, man

Re: Worked part year US/part year CAN (TN Visa)

Post by nelsona » Wed Feb 27, 2019 1:55 pm

Once you return to Canada you will be a "newcomer" for this year (file return with an arrival date). Any world income earned after that date must be reported, so make sure you get any of your US income before leaving. In future years you will be resident.

Once you finish with this year's US tax return, you should not have to file anymore in US, unless you have US income to report.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Moving2Canada
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Re: Worked part year US/part year CAN (TN Visa)

Post by Moving2Canada » Wed Mar 13, 2019 12:30 pm

I'm in a similar situation. Would leave the US ~August 15th.

To re-confirm the Feb 26, 2019 post... in short, I'd file US tax return showing entire year (and claiming tax credit for CDN taxes Aug-Dec). I'd file CDN tax return showing only Aug-Dec. The net effect would be:

Income Jan-Aug: US tax only
Income Aug-Dec CDN tax only (though claimed on US return, there would be an offsetting credit)

Is that correct or am I missing anything? Thank you.

nelsona
Posts: 15980
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Worked part year US/part year CAN (TN Visa)

Post by nelsona » Wed Mar 13, 2019 1:54 pm

Correct, except that if you use credit on US return, you will pay a little more US tax (but less than if you didn't file full year). You should use 2555 to exclude the Cdn wages.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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