Questions about TN holder tax in US and Canada

[Steve168]

Hi there all,

I am Canadian Citizen and a TN holder starting from middle of last October and working in a US company in US since then.

My questions are:

1. Since my present in US is not over 183 days( for the two years before last year, i had no present in US), the resident status for me in US should be non resident alien for tax propose, am I right?

2. Should I use Form 1040NR for my income tax?

3. Can I claim my wife ( who is a Canadian Citizen too) and my son ( who is an US Citizen) as my dependents to lower my tax rate?


Thanks.

Steve

[nelsona]

While you can file as 1040NR, since you did not meet the presence test, you may find that filing a full-year 1040, reporting all your and your wife's world income, and then excluding both your Cdn wages using 2555 will yield the lowest US tax-rate.

You may even find that filing 1040 and using foreign tax credits using form 1116 may even be better, as it will give you the $1000 credit for your child (using 2555 might not, you'll have to check).

If you moved earlier in the year (say, july) the 1040 and 2555 or 11116 optin woulb be the obvious chioce. But since you only moved in October, it woill depend on how much money you and your wife made, and what type, before and after coming down.

Everyone, their 1st year in US, goes thru the multiple scenarios to see what's best.

None of these choices will affect your CDn return.