TN Visa Non-Resident Taxes

[needhelpTN]

Married working in US since June. Spouse in Canada. I travel usually on weekends back to Canada. For 2019, I have been under 183 days per the substantial presence test.

Different people have given different opinions. Some say to file as full resident (1040) or non-resident (1040NR).

I will be in US til Summer of 2020 before moving back home to Canada. I will pass the substantial presence test in 2020 and will likely try to start working in Canada in 2020 as well (if its possible during the pandemic).

Under all those assumptions, should I file as a Nonresident for 2019 and what would I do for 2020?

Would there be a better way to file my taxes this year (i.e. as a full resident instead of non-resident)? Note that I did not work or have income before coming to the US.

At this moment, I would prefer to not file jointly (i.e. to exclude my husband from any US taxation).

[nelsona]

For Cdns, SPT is not that important, It is clear that you really still live in Canada, and there is little point complicating your US taxes by filing as a resident, for either 2019 or 2020, since you still pay taxes at the Cdn rate.

[needhelpTN]

Thanks for that clarification.

I do live in the US most of the time (i.e. I have rented a home on a one year lease for the time that I am working in the US). I travel some weekends back to Canada to see my family and spouse. I have travelled enough in 2019 that I spent less than 183 days per SPT but did spend more than 31 days straight as well in the US.Sometimes my spouse does come to the US to see me (i.e its close to the border).

If I do pass the SPT for 2020, whats the best way to file in 2020? Wouid I apply for a treaty exemption especially since I would return to Canada and cut ties with the US?

[needhelpTN]

Further to that (wish I could edit my post), with regards to the 1040NR;

I assume I would not need an exemption (Table L of the 1040NR) for 2019. Is that correct?

For Section G (with the dates of entry and departure), what do I do if there are more dates than lines provided in the table. For example, I generally left the US every other weekend (i.e. leave Friday, return Sunday). Are those important or should I only include the larger gaps (i.e. when I took time off for the wedding or vacation)?

[nelsona]

As I said, even if you met SPT, you would claim closer connection to Canada and still file 1040NR, so do not worry about having to choose in 2020.

There is no US income that you would be claiming as exempt.

You are a commuter, so check the box and move on.

[needhelpTN]

You said to check the commuter box. Would that be applicable even if I currently have housing (i.e. live in the NY State)?

I am also trying to figure out if I am a resident of NY state or not. It constantly refers to domicile and permanent place of abode in determining resident status.

While Canada is still my home (i.e. I have ties including spouse and family in Canada), I do have a residence in NY that I do stay at most of the time.

For example, the definition of a domicile is 1) the place you intend to have as your permanent home 2) where your permanent home is located 3) the place you intend to return to after being away (as on vacation, business assignments, educational leave, or military assignment).

[nelsona]

Yes. Commuter refers to returning regularly, not necessarily daily.

[nelsona]

You have a home in Canada and are planning to return there in a few months permanently. There is no need to complicate yourself with departure tax from Canada and full 1040. You still have to pay tax in Canada.

For state, you are non-resident. Report only wages. You are on business assignment in NY.

[needhelpTN]

Do you recommend filing as a resident if the return is greater? Based on my basic understandings, this is likely because a resident standard deduction is better than the itemized deduction available to non-residents.

Would I have to do anything different other than use a different form to file a resident?

[nelsona]

I would not advise this. If it is really higher tax (don't forget, any tax you save in US is eaten up by Canada by giving you smaller credit) then I would then be looking at the Article XXV return (which uses the 1040 MFJ to calculate a tax rate, but uses 1040NR to report income).

This would require looking at your entire tax picture, not simply difference between 1040 MFS and 1040NR.

[needhelpTN]

How does the tax credit work in Canada?

Its very confusing at this point.

[nelsona]

Canada will grant you (roughly) dollar for dollar credit for the taxes you paid in US on the US income you report on your CDn return (fed first then province). You need to do both taxes at same time to see what credit you will get.

[needhelpTN]

Thanks. I guess the more taxes held by the US will result is more tax credit available in Canada which would be beneficial. If I receive a return from the US, I assume that I would have less credit available in Canada.

[needhelpTN]

Just to provide some context. What if I had tuition credit available to me as well and both that credit+the foreign credit exceed what my estimated tax return in Canada would be.

Would I be worse off?

[nelsona]

Tuition credit must be used before foreign tax credit, so most in your situation do not benefit fully from FTC for that first year.

So 1040NR using 1040 rate is the best for YOU -- THIS year.