Hi,
I will leave quebec for NY in June to work on a TN visa.
My significant other who has been with me for ~10 years will follow me 3 months later. At that point we will be renting out our property in quebec. My questions:
1) Will I be able to avoid paying taxes in Canada/Quebec? How does the "gray area" where she is still in quebec influence my situation? Would it be considered a "normal/acceptable transition", if there is such a thing? Or would the first 3 months mean I have to pay taxes in canada but then after that only in the us?
2) A visa related question (I know I should post it to the other forum...) : any chance of getting my significant other to obtain a TD visa? We've been living together and filing taxes together for more than 5 years now. Or do we really have to get married?
Any other hints/tips? (sorry for being a bit clueless :( )
Thanks in advance for any information. This forum is really great.
TN: Significant Other following me 3 months later.
Moderator: Mark T Serbinski CA CPA
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You'll need to be married her to get a TD.
As for her influencing your Canada tax situation, yes, as long as she was in Canada - you have not really "left" yet. However, Canada/US do have tax treaties in place, so you "won't" be double taxed for the 3 months.
As for having rental property after you leave, a different set of tax issues in both Canada and the US.
As for her influencing your Canada tax situation, yes, as long as she was in Canada - you have not really "left" yet. However, Canada/US do have tax treaties in place, so you "won't" be double taxed for the 3 months.
As for having rental property after you leave, a different set of tax issues in both Canada and the US.
The tax problem, in your case, is that she has no legal right to live with you in US, since she cannot get a visa that permitts this. The best she can do is VISIT you, and must therefore mantain a residnce in Canada. Also, her tourist status will make it hard (not impossible) to establish US tax residency, which is the first step in breaking Cdn tax residency. Not being married, she cannot file a tax return with you in US, nor can she be considered your dependant.
Because of this, she will not be able to break ties in canada, so you will be in the position of having a 'spouse' in canada. which is a major tax tie.
To get around this you must *greatly* outweigh your Cdn ties with US ones. You must get a place to live in US, not temp housing. You must take your belongings and cars with you in June. You must not visit Canada with any regularity. You must break as many other social ties as possible (except for RRSP, bank account). No Drivers license, RAMQ card. You must tell all that you deal with that you are non-resident (bank, RRSP, tenants).
This would allow you to claim that you left Canada in June, and avoid CDn/QC tax on your US income. she would continue to live/pay tax in Canada.
While the tax treaty does HELP to avoid double taxation, it does not mean that you could be forced to report your income in both countries, which is complicated enough.
Because of this, she will not be able to break ties in canada, so you will be in the position of having a 'spouse' in canada. which is a major tax tie.
To get around this you must *greatly* outweigh your Cdn ties with US ones. You must get a place to live in US, not temp housing. You must take your belongings and cars with you in June. You must not visit Canada with any regularity. You must break as many other social ties as possible (except for RRSP, bank account). No Drivers license, RAMQ card. You must tell all that you deal with that you are non-resident (bank, RRSP, tenants).
This would allow you to claim that you left Canada in June, and avoid CDn/QC tax on your US income. she would continue to live/pay tax in Canada.
While the tax treaty does HELP to avoid double taxation, it does not mean that you could be forced to report your income in both countries, which is complicated enough.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Now, if you were to marry, the CRA takes the position that the 3 months would certainly be a transitional period in which you BOTH clearly indicated your intent to leave canada and livein US legally. You would quite easily qualify for non-resident status in June (so long as you were taking the steps I outlined above), and she in September.
You would not even have to report US income on your Cdn/QC return.
You would not even have to report US income on your Cdn/QC return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Thank you very much for the answers.
One comment. I think here:
"While the tax treaty does HELP to avoid double taxation, it does _not_ mean that you could be forced to report your income in both countries, which is complicated enough."
you meant to say:
"[...] it _does_ mean that you could be force to report your income in both countries [...]"
right?
While I'm here: could she potentially convert from a TD visa (assuming we got married) into a TN of her own if she could find an employer over there?
Thanks again. Much appreciated.
One comment. I think here:
"While the tax treaty does HELP to avoid double taxation, it does _not_ mean that you could be forced to report your income in both countries, which is complicated enough."
you meant to say:
"[...] it _does_ mean that you could be force to report your income in both countries [...]"
right?
While I'm here: could she potentially convert from a TD visa (assuming we got married) into a TN of her own if she could find an employer over there?
Thanks again. Much appreciated.