Taxes for Dual Status Aliien

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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jtanguay
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Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 8:43 am

I'm hoping to get some help on whether I am on the right track for my U.S. taxes (I understand I only have five days left but desperate times call for desperate measures).

I am a Canadian Citizen and from August 2014-May 2018 I was on an F-1 student visa, going to school in Ohio. In May of 2018 I switched to a TN visa and am now living and working in Ohio.

From what I've researched, switching from non-resident to resident during the tax year makes me a dual status alien and I need to file a 1040NR for the first half of the year (I made $200 of income as a tutor) and a form 1040 for the second half, however, the IRS states dual status aliens can not claim the standard deduction on the form 1040.

I started reading further that since I am still on a Canadian drivers license and passport, I may be able to file a form 8840 or 8833 (?) and then only file as a non-resident in the US? Or that I may be able to be treated as a full year resident? Any help on this topic?

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 8:46 am

No, you are not a Cdn resident anymore, and need to make thatclear to CRA.

And for IRS, you are allowed to file a full year 1040, as a Cdn national, if it is to your advantage (it is).
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jtanguay
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Re: Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 8:50 am

I have a tax accountant in Canada filing my Canadian taxes so this question is mostly pertaining to the US ones.

Do i need to file additional forms to file as a full year resident for the US? Cause from everything I read I am definitely dual-status currently...

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 9:59 am

As I said, you are allowed to file full year. There is never any advantage to filing dual-status.

The same requirements for filing duel (3520, PFIC,FATCA) exist for full year.

Just make sure your CPA files for non-residency starting when you got TN.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

jtanguay
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Re: Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 10:31 am

Is it possible instead for me to file an 1040NR with a form 8833? If so, is that beneficial to me? I still have ties to Canada including a Canadian license, Canadian Passport, and Bank account.

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 10:38 am

Those ties are insufficient. You live and work in US.

You had 4 years to prepare for leaving Canada and becoming US resident. As you probably realize, I don't do desperate.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

jtanguay
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Re: Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 10:43 am

Oh that's okay and I am okay with filing as a resident. I have just read many things that since the nature of the TN visa is temporary (and thus to get it I had to prove that I had plans to return to Canada such as my bank account and license) they suggest I file as a non-resident. But I'm just trying to figure out the best way

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 11:10 am

What you read was wrong about TN, and about what constitutes ties. As a student you could not become resident, but as TN, you can, and, based on your situation, you must.

In fact, within 30 days after getting TN, you were required to get a state DL, for instance, and plating your car.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

jtanguay
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Re: Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 11:17 am

Interesting... Part of my application process at the border was handing in copies of my Canadian bank account and license. As for getting a state DL, I went into the BMV when I moved here and was told I can keep my Canadian license and plates for the duration of my visa.

Anyways, is there additional forms that need to be filled out for me to file as a full year resident as opposed to dual? Or simply file as a full year resident?

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 12:04 pm

That was while you were a student. EVEYTHING changes once you work.

I already answered your other question.

See you in July perhaps.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

rahuls26
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Re: Taxes for Dual Status Aliien

Post by rahuls26 » Tue Apr 09, 2019 12:31 pm

[quote]As I said, you are allowed to file full year. There is never any advantage to filing dual-status.[/quote]

Apologies for the hijack, but my situation is similar. I was going to file as dual status since I moved to the US from Canada in April of last year, on TN status.

I am reading the following document: https://www.irs.gov/pub/irs-pdf/p519.pdf

It seems in order to choose to file full year, I need to satisfy the following conditions, which I don't.

• You are married to a U.S. citizen or resident alien at the end of the year.
• Your spouse joins you in making the choice.

Is it the tax treaty between Canada and the US that allows me the choice?

jtanguay
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Re: Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 12:35 pm

I read that as well.

I am single and unmarried, which is why I didn't think I could do this and was asking if there was additional forms to fill out or decalre this.

Choosing ResidentAlien Status
If you are a dual-status alien, you can choose to be treated as a U.S. resident for the entire year if all of the following apply.
•You were a nonresident alien at the begin-ning of the year.
•You are a resident alien or U.S. citizen at the end of the year.
•You are married to a U.S. citizen or resi-dent alien at the end of the year.
•Your spouse joins you in making the choice.This includes situations in which both you and your spouse were nonresident aliens at the be-ginning of the tax year and both of you are resi-dent aliens at the end of the tax year.

Note. If you are single at the end of the year, you cannot make this choice.

jtanguay
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Re: Taxes for Dual Status Aliien

Post by jtanguay » Tue Apr 09, 2019 12:40 pm

rahuls23: Here is the piece from the tax treaty about residency.

1. For the purposes of this Convention, the term "resident of a Contracting State" means any person
who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of
management, place of incorporation or any other criterion of a similar nature, but in the case of an estate
or trust, only to the extent that income derived by such estate or trust is liable to tax in that State, either
in its hands or in the hands of its beneficiaries.
2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting
States, then his status shall be determined as follows:
(a) He shall be deemed to be a resident of the Contracting State in which he has a
permanent home available to him; if he has a permanent home available to him in both States or
in neither State, he shall be deemed to be a resident of the Contracting State with which his
personal and economic relations are closer (centre of vital interests);
(b) If the Contracting State in which he has his centre of vital interests cannot be
determined, he shall be deemed to be a resident of the Contracting State in which he has an
habitual abode;
(c) If he has an habitual abode in both States or in neither State, he shall be deemed to
be a resident of the Contracting State of which he is a citizen; and
(d) If he is a citizen of both States or of neither of them, the competent authorities of the
Contracting States shall settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting
States, then if it was created under the laws in force in a Contracting State, it shall be deemed to be a
resident of that State.
4. Where by reason of the provisions of paragraph 1 an estate, trust or other person (other than an
individual or a company) is a resident of both Contracting States, the competent authorities of the States
shall by mutual agreement endeavor to settle the question and to determine the mode of application of
the Convention to such person.
5. Notwithstanding the provisions of the preceding paragraphs, an individual shall be deemed to be
a resident of a Contracting State if:
(a) The individual is an employee of that State or of a political subdivision, local
authority or instrumentality thereof rendering services in the discharge of functions of a
governmental nature in the other Contracting State or in a third State; and
(b) The individual is subjected in the first-mentioned State to similar obligations in
respect of taxes on income as are residents of the first-mentioned State.
The spouse and dependent children residing with such an individual and meeting the requirements of
subparagraph (b) above shall also be deemed to be residents of the first-mentioned State.

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 1:03 pm

The treaty provison XXV allows Cdns to be treated like US citizens. You are allowed to file a 1040 full year.

The treaty residence clause CLEARLY makes you resident in US, as does CRA's residency rules, since you do not have any primary ties.
You live and work in US. Plain and simple.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nelsona
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Re: Taxes for Dual Status Aliien

Post by nelsona » Tue Apr 09, 2019 1:05 pm

Even a Cdn living in Canada is allowed to file a 1040.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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