H-1B and spouse living in Canada

[bigboy101]

Hi,
I have a weird situation. I am a Canadian citizen and have been working in the US on H-1B for the past 5 years. I am deemed non-resident of Canada. I recently got married in Canada and my wife works and lives in Canada and does not plan to come to the US. She is a Canadian citizen and has never worked or lived in the US. I will live/work in US and she will live/work in Canada for the rest of the year (2006).

Questions for 2006:
1. I severed my ties with Canada 5 years ago and have been non-resident ever since. Now that I am "married", am I a resident of Canada for tax purposes?
2. Do I file as single or married? We've never lived together and dont have kids.
3. Do I need to report her Canadian income on my US tax return?
4. Do I need to file Canadian taxes?
5. Does she need to report my US income on her Canadia return?
6. Does my wife have to file US income tax?
7. Are there any tax strategies for my situation?

Thanks.

[spublic]

Hi - I have a similar but slightly different situation.

I am an Indian citizen, working in the US on a H1-B. I am a "resident for tax purposes" according to the substantial presence test in the US. I have been in the US for 14 years, on multiple visas (F-1 and H1-B). My wife, who is also an Indian citizen, got a job in Canada after her graduation last year, and moved to Vancouver. She sublets a room there, and we continue to maintain a house in the United States. Each of us visits the other on occasion (myself on a TRV, and she on a H-4 visa).

Questions -

(1) Am I a resident, non-resident or deemed non-resident of Canada for 2005?
(2) If I am considered a resident of Canada, and have to declare my US income, can I claim a foreign tax credit on both federal and (CA) state taxes that I pay?

Thanks.

[havefuns]

regarding R or NR, I made a phone call to CRA, when I mentioned I have a wife , who is working in Canada, the agent immdediately told me I am a "factual resident". Anyway, you guys can file a form (forget the number) to them and they will judge.

As far as I know, you can claim US federal and state tax as Foreign Tax credit.

Please keep us posted, if you have any information.

[spublic]

Thanks for sharing your experience -- will definitely post any information that I am able to glean on this subject.

I guess the question then is - am I a "deemed" non-resident due to US-Canada tax treaty? Clearly, I am maintaining some residential ties in both countries, but I am physically present mostly in the US - which I think is the "center of my vital interests." For example, I never gave up my US residency - my wife did.

However, I am not a US or Canadian citizen, or a PR of either country. I am a "resident for tax purposes" due to substantial presence in the US. Does the treaty even apply in this case?

[nelsona]

Discount 'havefuns' comments. Do not file as a resident, and do not submit an NR73 unless asked to do so by CRA. Cra always gives incorrect and meaningless answers on residency over the phone.

You were in the past a 'factual' non-residdnt, pure and simple. Now that you are married, while you have established a major tie, so long as you do not spend excessive time in canada, you can maintain deemed non-resident status, by teaty.
The key is to not establish ANY other Cdn ties of any sortt during this period.


to your other questions.

2. you must file as married in US
3. you do not 'have to' but you may pay more tax buy not filing jointly, and you are quite free to exclude her Cdn wages by 2555.
4. No, unless you earn Cdn property income (I would not suggest owning any property in Canada at this time, even jointly with your spouse), or Cdn wages (again, inadvisable).
5. She needs to report it on page 1, and is ineligible for any spousal credit or GST credit.
6. see 3.
7. Yes. for her to find a job in US and move there with you.