Canadian citizen with T1 visa moved to US but spouse stayed

projectpete · Post by **projectpete** » Tue Oct 30, 2007 10:10 am

Hello,

I am a Canadian citizen with T1 visa and moved to the US on June 26, 2006, my spouse stayed back in canada in our apartment we were renting until November 6, 2006. She did not have a job as she was caring for our daughter so she had no income but we were receiving the canada child tax benefit. When I file my taxes I put an exit date of June 26 for myself, if I put an exit date of November 6 on my spouses return (we filed seperately) will I have to pay canadian taxes on my US income from the time I left Canada (Juned 26) to the time my spouse left Canada (nov 6)?

nelsona · Post by **nelsona** » Tue Oct 30, 2007 11:03 am

Typically, when a couple/family is leaving canada, there is the presumption that the copule leqave when the last one leaves. This presumption can only be overcome by 2 factors: 1. that the spouse leaving first clearly establishes his primary residence in the new treaty country, and 2. takes all required steps to show that he is no longer resident in canada, such as informing all payors (bank, renaters, RRSP managers, etc) that he is non-resident, and making as few visits to canada as possible, certainly not weekend commutes. If you were receiving GST or CCTB you would have had to had these stopped.

The fact that your wife did eventaully join you is in your favour. If you can assure CRA that you took the other steps outlines above, you can probably be considered to have left in June.

Since you have files wth 2 separate departure dates (there is no joint return in canada, so you would have filed separately in any event), the ball is now in CRA's court.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 11:24 am

I did not visit canada once between June and November, my wife and daughter (born June 2005)came to visit me in the US a few times though. We had and still have a canadian bank account and have made RRSP contibutions.

My wife called the CRA the week after she moved to tell them to stop the CCTB, and again twice after that and to change our address to the US address. She also said "I am calling you now because I am do not want to have to owe moneylater on". I also logged into my account on the CRA website and changed my address to the us address and date left canada to June.

The thing is they never stopped sending us the payments even though we kept calling them numerous times, the payment finally stopped when I filed my return with my exit date.

Now we received a letter saying we owe over $1300 back to the CRA because they say they have on record that our daughter (born june 2005) has not lived with us or have been in our care since January of 2006 and we should have contacted them to say we moved to the US to say we were not eligeble for the $100 per month CCTB. After speaking with an agent they told us they have on record that we called in november and a few times after that yet they still did not stop the payments.

Also, when we had our daughter we were told we did not qualify for baby bonus becuase we both made too much (we did not make that much but I said ok whatever). A few months later we call the CRA for a question and they agent asks us why we arent getting a baby bonus, we answer saying we were told we make too much. The agent replied no you dont you should have been receiving it all this time, so they sent a $1000 check in the mail. Guess what, a year later we get a letter from the CRA saying we should not have received that cheque and we owe that amount back. Can they do this? I cant afford to keep paying them this money back after they give it to us.

Where do they get information saying our daughter was not in our care since January, then whose care is she under?

nelsona · Post by **nelsona** » Tue Oct 30, 2007 11:43 am

So, why are you asking about whether you will owe taxes. You have more pressing issues to deal with.

You will have to resolve this with CRA.

But, please do not use the excuse that since they gave you the money, that it is difficult to pay them back.

CRA makes mistakes, they have already made one in your favour, and one against you, so do not assume that everything they say is correct. obvioulsy, your wife has been caring for your child, in canada, until November 2006. Stick with that.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 12:38 pm

so how do i file an ammendment to my canadian tax return to show that my wife came to the US 5 months after me. i filed the exit date as June for both of us as i thought that was the right thing to do.

since I am only claiming 5 months of my US income how do I reflect that on the tax return. do I have to ammend my return or my wifes or both?

What I would think I would do is change the exit date on my wifes return from June to November. Then change my additional income on the canadian return to add 5 months of my US salary?

nelsona · Post by **nelsona** » Tue Oct 30, 2007 12:59 pm

Filing both exit dates in June was the completely WRONG thing to do, as you have now found out.

I would only ammend hers. she should submit a T1-ADJ explaining the date change. Then she should adjust any income that she did not report as a result of premaurely declaring her departure. CRA will recalcualte all other items.

unforttunately, this ammendment will proabaly also draw attention to your return, and they will likley ask for NR73 from both of you.

I would not voluntarily change your departure date. be prepared for unfavourable decisions.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 1:03 pm

My exit date was June 26 and I filed my exit date as June 26 so I dont need to change mine.

She did not earn any income so there is no income that was not reported.

Do I not have to include my income I made in the US on my return for the 5 months that she stayed behind?

nelsona · Post by **nelsona** » Tue Oct 30, 2007 1:11 pm

As I've said. IF you took the steps I indicated, you will eventually be determined by CRA to be a "Deemed Non-Resident" from June 26th onwards.

My warning is simply that it may take some time for CRA to accept this, now that you are having to re-open your wife's file. CRA is much more rigorous in reviewing ammended returns rather than initail ones, and the proof you need to provide is much more burdensome.

These are questions you should have posed back in April, when you were rushing to file your return.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 1:42 pm

hey nelsona, sorry for all the confusion.

I used ufile.ca and my return has exit date of June but I looked at my wifes and it doesnt show an exit date anywhere for her but it does show her province of residence as other and noted as a non-resident.

She called the cra nov 26. and told them she had an exit date of November 6 so that part is fine.

My only question is what income do I inlcude on my canadian tax return for the months between June and november (June being the date I left canada and started working in the US and November being the date my wife left canada. She did not have any income during those months and still does not have any income here in the US.)

nelsona · Post by **nelsona** » Tue Oct 30, 2007 2:09 pm

If she told them she had a departure date, but then did not indicate it on the return, then she did not file correctly.

When you are non-resident, you do not include any foreign income from after the departure date.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 2:46 pm

ok so i dont have to ammend my return. i thought because my wife was still in canada that meant i had ties back in canada so i could be taxed for the money i was making in the US while my ties were still in canada.

nelsona · Post by **nelsona** » Tue Oct 30, 2007 2:55 pm

I stated the steps necessary for you to be departed June 26th already.

Your wife's return was filed incorrectly.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 3:14 pm

alright, so I am not touching my return then

and i will ammend her return to make sure it says november is her departure date and that is it.

nelsona · Post by **nelsona** » Tue Oct 30, 2007 3:58 pm

Yes, now return to the post I already said this, and re-read my warning.

projectpete · Post by **projectpete** » Tue Oct 30, 2007 4:01 pm

thanks for all the replies nelsona, i will ammend with fingers crossed nothing comes back in the future!