Deemed Non-Residency & US Source Income

[dchrish]

Hello,

Kindly reaching out for some advice...Because of the state of things, I have been unable to reach the CRA with questions and cross-border accountants are just as hard to reach right now.

I have been working in the US on a TN Visa since Feb 2017. For 2017, I filed a Canadian return and paid taxes on my Canadian source income then filed in the US as a resident with a foreign tax credit for what was paid to the CRA.

Filed again as a US resident in 2018 and did not file a Canadian return as I did not have any Canadian source income.

I recently logged into 'My Account' with CRA and saw a demand to file from them for 2018 (eek).

I have been going through the income tax guide for deemed non-residents and having trouble determining if I need to include my US Source income? It mentions Line 104 (10400) would include foreign source income for deemed residents but doesn't specify anything for non-residents.

Where do I report my US Source income / do I need to?

FWIW: I intend to return to Canada in 1-2 years and would rather avoid filing anything indicating a permanent departure

[nelsona]

You appear to be filing correctly, except that perhaps you didn't take care of some things in 2017.

When you filed your 2017 return, in Canada, did you indicate a departure date, and otherwise comply with departure tax requirements/

As to being a "deemed" non-resident, why would you think this? Di you have residential ties in Canada?

Even so, if you left in 2017, you should not be filing anything in Canada for 2018 or 2019.

It really doesn't matter what your intentions are. If you left Canada, you are non-resident. Bit you cannot act as a resident only for what suits you, but then not pay the piper.

[dchrish]

Thank you for the reply!

Understand. It looks like I am still subject to the same rules as emigrants even on a TN and should have reported a deemed disposition, like you mentioned... and there is an unfortunate penalty :(

Thank you for your help

[nelsona]

So, I would fix this, whch will be much cheaper that faking CDn residence and paying Cdn tax on your US income.