Hi,
I live and work in Canada on a TN visa. However, I support my dad (who has no income) through paying rent on the apartment he shares with my brother, his car insurance, utilities, phone and DSL bills etc etc.
Now I have a letter from the CRA asking me to explain (they already sent me the refund and Notification of Assessment way back) details:
1. SIN for my dad - which I am going to say is N/A since he's a US citizen.
2. Net income for the year - Social Security Administration letter saying they can't provide him a benefits statement since he has no income on his SSN. I might not EVEN attach this at this point - just say that he has 0 world income --- there truly is no proof of non-income, is there? Or should I attach this rather than wait for them to send me a follow up letter?
3. Address - I'll give our US address.
4. Date started living together - 2000 (that's when he immigrated to the US).
Do I need to point out the XXV.3 Tax Treaty provision at this point which states I can claim him as a dependent in Canada or should I hold that for later?
Thanks.
Claiming parent in US as dependent in Canada
Moderator: Mark T Serbinski CA CPA
I'll get back to you on this, but one thing that might get you is that you live in canada (you said) and he lives in US.
That does not equate to living with you, does it?
This is a criteria for the deduction.
The rules for who can be claimed by a dependant are different between canada and US.
That does not equate to living with you, does it?
This is a criteria for the deduction.
The rules for who can be claimed by a dependant are different between canada and US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
If you lived in US, you could claim the treaty, since he would be living with you.
But you don't, so he is not, by the CRA rules, your dependent. This would be true if you worked in BC and he lived in Ontario, too, so the treaty doesn't help you, since it is not the fact that he is in US and you are in canada, it's the fac t that yopu live apart.
CRA is correct to question your claim, and will probably deny it.
But you don't, so he is not, by the CRA rules, your dependent. This would be true if you worked in BC and he lived in Ontario, too, so the treaty doesn't help you, since it is not the fact that he is in US and you are in canada, it's the fac t that yopu live apart.
CRA is correct to question your claim, and will probably deny it.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]If you lived in US, you could claim the treaty, since he would be living with you.
But you don't, so he is not, by the CRA rules, your dependent. This would be true if you worked in BC and he lived in Ontario, too, so the treaty doesn't help you, since it is not the fact that he is in US and you are in canada, it's the fac t that yopu live apart.
CRA is correct to question your claim, and will probably deny it.[/quote]
Hi nelson,
He lives with me when he's in Toronto but no, not on a daily basis. More time (like 8-9 months/yr.) is spent in the US where I am paying rent.
Going through the language of the Treaty XXV.3:
"In determining the taxable income of an individual who is a resident of a Contracting State there shall be allowed as a deduction in respect of any other person who is a resident of the other Contracting State and who is dependent on the individual for support the amount that would be so allowed if that other person were a resident of the first-mentioned State."
To me this reads that the dependent can be resident of the US ("other contracting state") and would be treated like a resident of Canada ("first-mentioned State") in determining the deduction?
FWIW, I discussed this language with 2 CRA agents at the Intl. Office (and we went into LOT of detail on the language) separately over the phone before making the claim. And they agreed I had basis for doing so.
Thanks.
But you don't, so he is not, by the CRA rules, your dependent. This would be true if you worked in BC and he lived in Ontario, too, so the treaty doesn't help you, since it is not the fact that he is in US and you are in canada, it's the fac t that yopu live apart.
CRA is correct to question your claim, and will probably deny it.[/quote]
Hi nelson,
He lives with me when he's in Toronto but no, not on a daily basis. More time (like 8-9 months/yr.) is spent in the US where I am paying rent.
Going through the language of the Treaty XXV.3:
"In determining the taxable income of an individual who is a resident of a Contracting State there shall be allowed as a deduction in respect of any other person who is a resident of the other Contracting State and who is dependent on the individual for support the amount that would be so allowed if that other person were a resident of the first-mentioned State."
To me this reads that the dependent can be resident of the US ("other contracting state") and would be treated like a resident of Canada ("first-mentioned State") in determining the deduction?
FWIW, I discussed this language with 2 CRA agents at the Intl. Office (and we went into LOT of detail on the language) separately over the phone before making the claim. And they agreed I had basis for doing so.
Thanks.
The key phrase is "the amount that would be so allowed if that other person were a resident of the first-mentioned State."
As isaid, if he were living in another province from you, he would not be eligible. and thus the fact that he lives in US doesn't change this.
The CRA guidleines even spell out that those who stay with you as a visitor are not eligible.
Sorry.
As isaid, if he were living in another province from you, he would not be eligible. and thus the fact that he lives in US doesn't change this.
The CRA guidleines even spell out that those who stay with you as a visitor are not eligible.
Sorry.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
The rules for canada are different that US.
For IRS, support is the key and living with you is unimportant.
The reverse is the case in canada. Living with you is key, yhe support you give them is secondary.
The treaty would help you if he lived in canada and you in US, as that would qualify you for IRS purposes, not for CRA.
For IRS, support is the key and living with you is unimportant.
The reverse is the case in canada. Living with you is key, yhe support you give them is secondary.
The treaty would help you if he lived in canada and you in US, as that would qualify you for IRS purposes, not for CRA.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]The key phrase is "the amount that would be so allowed if that other person were a resident of the first-mentioned State."
As isaid, if he were living in another province from you, he would not be eligible. and thus the fact that he lives in US doesn't change this.
The CRA guidleines even spell out that those who stay with you as a visitor are not eligible.
Sorry.[/quote]
"In determining the taxable income of ME who is a resident of CANADA there shall be allowed as a deduction in respect of MY DAD who is a resident of the USA and who is dependent on ME for support the amount that would be so allowed if MY DAD were a resident of CANADA."
I re-worked the wording to make it easier to read and applicable to my scenario. :)
I agree with you that this is the key phrase -- but I'm reading it to say that the deduction would be allowed for a non-resident dependent AS IF he were a resident dependent.
Even CRA's deemed resident guide allows for non-dependent residents (page 43, line 305):
" If your dependant is a non-resident of Canada, his or her net world income is his or her net income for 2007 from all sources both inside and outside Canada. If your dependant's net world income was less than $9,600, calculate your amount on line 305 of your Schedule 1. "
I agree that CRA doesn't allow for visitors to be claimed as dependents - however, that would be for taxpayers not benefiting from the Treaty (pretty much everyone who's not an American citizen in Canada! :=) )
As isaid, if he were living in another province from you, he would not be eligible. and thus the fact that he lives in US doesn't change this.
The CRA guidleines even spell out that those who stay with you as a visitor are not eligible.
Sorry.[/quote]
"In determining the taxable income of ME who is a resident of CANADA there shall be allowed as a deduction in respect of MY DAD who is a resident of the USA and who is dependent on ME for support the amount that would be so allowed if MY DAD were a resident of CANADA."
I re-worked the wording to make it easier to read and applicable to my scenario. :)
I agree with you that this is the key phrase -- but I'm reading it to say that the deduction would be allowed for a non-resident dependent AS IF he were a resident dependent.
Even CRA's deemed resident guide allows for non-dependent residents (page 43, line 305):
" If your dependant is a non-resident of Canada, his or her net world income is his or her net income for 2007 from all sources both inside and outside Canada. If your dependant's net world income was less than $9,600, calculate your amount on line 305 of your Schedule 1. "
I agree that CRA doesn't allow for visitors to be claimed as dependents - however, that would be for taxpayers not benefiting from the Treaty (pretty much everyone who's not an American citizen in Canada! :=) )
First off, you are not a deemed resident, which is in essence a government employee living abroad. Of course their dependents living abroad WITH THEM are granted special status becauser of the nature of their status.
Again, if your DAD was living 3 streets away from you in Canada, YOU would not be allowed any deduction for him. For Cdn tax purposes he MUST live with you. He doesn't. So the fact that he lives in US doesn't matter, he doesn't live with you.
So using your re-worked statement:
"In determining the taxable income of ME who is a resident of CANADA there shall be allowed as a deduction in respect of MY DAD who is a resident of the USA and who is dependent on ME for support the amount that would be so allowed if MY DAD were a resident of CANADA."
"the amount that would be so allowed if MY DAD were a resident of CANADA" is $0, since he doesn't live with you.
Even if he were a resident of canada and not living with you, YOU would get no deduction. Since he is a resident of US not living with you YOU also get nothing.
Again, if your DAD was living 3 streets away from you in Canada, YOU would not be allowed any deduction for him. For Cdn tax purposes he MUST live with you. He doesn't. So the fact that he lives in US doesn't matter, he doesn't live with you.
So using your re-worked statement:
"In determining the taxable income of ME who is a resident of CANADA there shall be allowed as a deduction in respect of MY DAD who is a resident of the USA and who is dependent on ME for support the amount that would be so allowed if MY DAD were a resident of CANADA."
"the amount that would be so allowed if MY DAD were a resident of CANADA" is $0, since he doesn't live with you.
Even if he were a resident of canada and not living with you, YOU would get no deduction. Since he is a resident of US not living with you YOU also get nothing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]First off, you are not a deemed resident, which is in essence a government employee living abroad. Of course their dependents living abroad WITH THEM are granted special status becauser of the nature of their status.
Again, if your DAD was living 3 streets away from you in Canada, YOU would not be allowed any deduction for him. For Cdn tax purposes he MUST live with you. He doesn't. So the fact that he lives in US doesn't matter, he doesn't live with you.
So using your re-worked statement:
"In determining the taxable income of ME who is a resident of CANADA there shall be allowed as a deduction in respect of MY DAD who is a resident of the USA and who is dependent on ME for support the amount that would be so allowed if MY DAD were a resident of CANADA."
"the amount that would be so allowed if MY DAD were a resident of CANADA" is $0, since he doesn't live with you.
Even if he were a resident of canada and not living with you, YOU would get no deduction. Since he is a resident of US not living with you YOU also get nothing.[/quote]
I get it. :-) Thanks for the help.
I'm still going to try and wing it with them. :)
Again, if your DAD was living 3 streets away from you in Canada, YOU would not be allowed any deduction for him. For Cdn tax purposes he MUST live with you. He doesn't. So the fact that he lives in US doesn't matter, he doesn't live with you.
So using your re-worked statement:
"In determining the taxable income of ME who is a resident of CANADA there shall be allowed as a deduction in respect of MY DAD who is a resident of the USA and who is dependent on ME for support the amount that would be so allowed if MY DAD were a resident of CANADA."
"the amount that would be so allowed if MY DAD were a resident of CANADA" is $0, since he doesn't live with you.
Even if he were a resident of canada and not living with you, YOU would get no deduction. Since he is a resident of US not living with you YOU also get nothing.[/quote]
I get it. :-) Thanks for the help.
I'm still going to try and wing it with them. :)
You know we've had this discussion before, just about your brother:
http://forums.serbinski.com/viewtopic.php?t=2733
Same conclusion. For Cdn purposes, the dependent has to live with you for you to be able to claim him.
http://forums.serbinski.com/viewtopic.php?t=2733
Same conclusion. For Cdn purposes, the dependent has to live with you for you to be able to claim him.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]You know we've had this discussion before, just about your brother:
http://forums.serbinski.com/viewtopic.php?t=2733
Same conclusion. For Cdn purposes, the dependent has to live with you for you to be able to claim him.[/quote]
Yes, we did. However, when I called the CRA Intl. Office (they're helpful) and they did clarify to me that siblings are not dependents over 18 (unless physically infirm) and when I highlighted my family situation, they agreed that I have a stronger claim in terms of my dad (obviously they don't guarantee anything over the phone). Infact, they are the ones who pointed me to the Line 305 guidelines to show that parents are qualifying dependents if the tax filer is single (like me).
I understand what you're saying however, my claim is based on the concept of what's "reasonable" -- that despite us not living physically together, my dad lives in a domicile maintained and paid for by me. The apartment in the US is furnished by me, I'm on the lease there and all the other things that I provide for on a day to day basis (utilities, car insurance, cell phone payments etc) are my support items for him.
http://forums.serbinski.com/viewtopic.php?t=2733
Same conclusion. For Cdn purposes, the dependent has to live with you for you to be able to claim him.[/quote]
Yes, we did. However, when I called the CRA Intl. Office (they're helpful) and they did clarify to me that siblings are not dependents over 18 (unless physically infirm) and when I highlighted my family situation, they agreed that I have a stronger claim in terms of my dad (obviously they don't guarantee anything over the phone). Infact, they are the ones who pointed me to the Line 305 guidelines to show that parents are qualifying dependents if the tax filer is single (like me).
I understand what you're saying however, my claim is based on the concept of what's "reasonable" -- that despite us not living physically together, my dad lives in a domicile maintained and paid for by me. The apartment in the US is furnished by me, I'm on the lease there and all the other things that I provide for on a day to day basis (utilities, car insurance, cell phone payments etc) are my support items for him.
Thta is all well and good in the IRS definition of dependant.
But in canada, it quite simply isn't... and that is why they are preparing to deny you.
All the best. We'll leave it at that for now.
BTW, Cdn civil servants are only twice as intelligent as US civil servants, so I wouldn't pin much hope on what they say over the phone.
But in canada, it quite simply isn't... and that is why they are preparing to deny you.
All the best. We'll leave it at that for now.
BTW, Cdn civil servants are only twice as intelligent as US civil servants, so I wouldn't pin much hope on what they say over the phone.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]
All the best. We'll leave it at that for now.
BTW, Cdn civil servants are only twice as intelligent as US civil servants, so I wouldn't pin much hope on what they say over the phone.[/quote]
Thanks and a mega-LOL@the civil servants comment. Glad to see even you have a sense of humor. ;)
Thanks for the help.
All the best. We'll leave it at that for now.
BTW, Cdn civil servants are only twice as intelligent as US civil servants, so I wouldn't pin much hope on what they say over the phone.[/quote]
Thanks and a mega-LOL@the civil servants comment. Glad to see even you have a sense of humor. ;)
Thanks for the help.
Probably haven't gotten around to it.
Unlike IRS, CRA always notifies one of a final decision, either by letter or re-assessment.
You could likely go online and find out by looking at your account(?).
Unlike IRS, CRA always notifies one of a final decision, either by letter or re-assessment.
You could likely go online and find out by looking at your account(?).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing