Canada's 183 day deemed-resident rule

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Pina
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Canada's 183 day deemed-resident rule

Post by Pina »

Hello, I would greatly appreciate your views on how to interpret Canada’s 183-day deemed-resident rule. Here is my situation: I severed residential ties with Canada and established residency in another country 10 years ago. I am planning to visit Canada in November 2020, and stay in Canada until May 2021. Would this 210 continuous-days visit to Canada over 2 calendar years (60 days in 2020, and 150 days in 2021) result in my inadvertently being classified as a ‘deemed-resident’ for tax purposes ? Thank you in advance for your help.
P. C.
Pina
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Re: Canada's 183 day deemed-resident rule

Post by Pina »

Hi, I should have clarified in my original question that I am a Canadian citizen, and I am retired.
nelsona
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Re: Canada's 183 day deemed-resident rule

Post by nelsona »

You would need to check the treaty between Canada and trhis "other country". Treaties override the 183 day rule in most cases.

If you were resident of US, for example, you would remain US resident regardless of how w=many days you spent in canada. Bi=ut if you did not meet residency rules for US, you would become Cdn resident the day you returned.

But, assuming you still have a residence in the other country, and no treaty protection, you would have to be in Canada 183 days in a CALENDAR year, to be considered deemed resident.

So, it doesn't look like you would have a problem. Just be careful about visits after May.
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Pina
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Re: Canada's 183 day deemed-resident rule

Post by Pina »

Hi, thank you for your answer.
Pina
heiwang88
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Re: Canada's 183 day deemed-resident rule

Post by heiwang88 »

Hello Nelson,

I have a very similar question to the original poster.

I am a Cdn citizen who left Canada to the US 8 years ago. I severed my ties with Canada and have not been filing taxes in Canada for the previous 8 years. I now have a GC in the US. I was in a long distance relationship with my financee, who is canadian and resides in Canada. I entered Canada in May to get married with my wife in July this year. I haven't returned to the US yet as the number of covid cases remain high. So I have been in Canada for > 183 days this year. I do have a re-entry permit so returning to the states later should not be a problem. We're in the process of filing an I-130.

My question is: From the previous post, it appears that staying in Canada for > 183 days will NOT matter because the US has a tax treaty with Canada, and I will still be a considered a US resident due to my GC. Will I be considered a Deemed Non-Resident?

Based on the CRA website, deemed Non-resident implies that I do not have any other significant ties to Canada. Since I got married this year to my Canadian wife who resides in Canada, can I still be considered non-resident?

However, in a separate section of CRA, it says that even if I have significant ties to Canada, I can still be a deemed non-resident as long as I am considered a resident of the US. So I am a bit confused. Do you have any guidance or advice for my situation?

Really appreciate all your help, Nelson.

----
https://www.canada.ca/en/revenue-agency ... anada.html

"If you have established ties in a country that Canada has a tax treaty with and you are considered to be a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada, you may be considered a deemed non-resident of Canada for tax purposes.

You become a deemed non-resident of Canada when your ties with the other country become such that, under the tax treaty that Canada has with the other country, you would be considered a resident of that other country. As a deemed non-resident, the same rules apply to you as a non-resident of Canada."
nelsona
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Re: Canada's 183 day deemed-resident rule

Post by nelsona »

Can I ask on what basis you have filed a I-130? Your fiancee is not entitled to a immediate GC at this time, so will take a couple of years before she can enter.

"You are a green card holder in the U.S. and you are married to a non-American spouse living in a foreign nation.
If you are in this scenario, expect a wait time of over two years until your Form I-130 visa petition is approved, and then another 4-10 months until you actually obtain the immigrant visa. After submitting your Form I-130, your petition will be put on a waitlist (currently 2 years long) and you will have to wait until your priority date. Once your priority date is reached, you can submit an online application form with supporting documents. At this point, if your petition is approved, you will be put on another waitlist for the immigrant visa, and eventually, your spouse will get an interview at the local consulate."
https://www.stilt.com/blog/2019/04/gree ... 2A)%20visa.

CRA has released guidelines on how those who are "stuck" in canada due to Covid, but this does not seem to be your case. You are in Canada by choice, and are no longer living in US. Nor does the treaty apply since your spouse is living in Canada and you are CLEARLY living with them, not visiting.

You are now a factual resident of Canada.
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heiwang88
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Re: Canada's 183 day deemed-resident rule

Post by heiwang88 »

Thanks Nelson. That clears it up.

Apologies for the confusion earlier - Yes you're correct, she will not get her GC immediately. I meant that we are in the process of filing the Form I-130 so we start the 2-year wait. We do have intention of moving to + living in the states once she gets her green card. I filed for the I-131 Re-entry permit so that I can stay with her in Canada while we wait.
nelsona
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Re: Canada's 183 day deemed-resident rule

Post by nelsona »

Just a piece of advice that the re-entry permit is not a guaranteed right to re-entry. You will be asked each time you enter, where you actually LIVE, and siunce you will be with your spouse living legally in Canada, you will have to answer Canada, at which point the CBP is allowed to begin the process of removing your GC.

But, for a tax point of view, you are now a CDn tax resident ( a returning resident) since May 2020 until you leave, presumably in 2023. Hopefully you will be able to keep your GC until then, but I am skeptical. What ties do you have in US, other than a now-uninhabited home?
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
heiwang88
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Re: Canada's 183 day deemed-resident rule

Post by heiwang88 »

Thanks Nelson. I have a couple of rental properties in the states. Then I have my investments accts/credit cards/bank accounts/car/drivers license. I'm not employed in Canada yet and I haven't taken any steps switch anything over yet. Initially I was hoping that my stay can be considered a 'visit' to Canada if I return within to the states within 6 months (which I still have a little bit of time to do). I do plan to officially "move" to Canada but was thinking it can be considered the next time I enter Canada with all my belongings.
nelsona
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Re: Canada's 183 day deemed-resident rule

Post by nelsona »

Yoiu are already resident. A couple of properties in US is not going to cut it to keep your GC, I'm afraid.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
Pina
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Re: Canada's 183 day deemed-resident rule

Post by Pina »

Hello,
I would appreciate any advice on an additional question related to the original thread in this post (“Canada’s 183 day deemed resident rule”).
As per the original post, I am a retired Canadian visiting Canada from a non-treaty country with an original plan to return to that country in May. But I am concerned that with the current situation with Covid both in Canada and in my country of residence (travel restrictions, unsafe air travel) my travel plans are very likely to change and I may be forced to remain in Canada past 183 days this year, perhaps until a vaccine is widely available in the Fall and it becomes safe to travel again.
The CRA website addresses a guidance they issued for part of 2020 to address the Covid lockdown, but it doesn’t give guidance for 2021.
How would the CRA be addressing the current situation with Covid in regards to the 183-day rule in 2021 ? Is there a process I would need to complete with CRA to obtain an exception if I am unable to depart before 183 days, and would I have to complete this process now or after I depart ?
Thank you for your advice.
Pina
nelsona
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Re: Canada's 183 day deemed-resident rule

Post by nelsona »

Obviously, until travel restriction are relaxed, the same principle will apply. CRA deals with one tax year at a time. Some form of guidance will be issued.
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Pina
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Re: Canada's 183 day deemed-resident rule

Post by Pina »

Thanks Nelsona. The CRA guidance on this issue for 2020 is not clear to me; it says that:
- days spent in Canada between March 2020 and September 2020 would not count towards the 183 day rule
- days spent in Canada while travel restrictions are in place (including the Goverments recommendation for Canadians to return to Canada) would not count towards the 183 day rule.
The way they wrote it I am not sure if the second guidance over-writes the first one.
In 2021, as travel restrictions are in place since the beginning of the year until some point in the future, would the second guidance mean that none of these days since January 1 would count towards the 183 days? And that I would not have to apply for a specific exception if I have to stay past 183 days due to Covid ?
Thanks
Pina
nelsona
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Re: Canada's 183 day deemed-resident rule

Post by nelsona »

The guidance is as written. Regardless of whethr there was clear restrictions on travel or not, the period between March and September is covered. Thereafter, the covered period will be based on Govt travel restrictions.

What more can be said?

As to any steps you need to take, I will let the notice speak for itself.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
Pina
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Re: Canada's 183 day deemed-resident rule

Post by Pina »

Thank you for your responses Nelsona. Your comments have helped me better understand the guidance.
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