Canadian working in US on L1B

bradcc · Post by **bradcc** » Wed Feb 24, 2010 9:49 pm

Hi there,

1. I moved to US to work on L1B in September 2009. Can I file as a deemed non-resident of Canada so that I don't have to report my US income even though I am still considered NR in US?(did not stay in US for over 183 days in 2009)

2. Also, should I file 1040NR or wait until June to file 1040(had about 18k in US income in 2009, but will be deducting 10k of tuition fee for employment expense)?

3. Also, can I still put $ into Canada TSFA now that new room is allocated for 2010?

Thanks in advance!

nelsona · Post by **nelsona** » Thu Feb 25, 2010 6:54 am

1. You became US resident and Cdn non-resident (not deemed) when you moved.

2. You have a choice. But typically tuition is not considered an employment expenxe.

3. No. TFSA is only for Cdn residents. Besides, TFSAs are taxable in US.

bradcc · Post by **bradcc** » Sat Feb 27, 2010 12:17 pm

Thanks so much for the answers!

One more thing.. I was weighing between filing on 1040NR or 1040

On the 1040:
I have about 49k(after deducting RRSP) income from Canada, and $2800(after all the deductions from US. After taking foreign tax credit for the taxes i paid to Canada, i ended up having to pay more tax to US than i would if I had used 1040NR reporting only $2800 US income..

Does this sound right? I wanted to file 1040 so i could take advantage of the $400 making work pay credit, but it seems like I am worse off even with the extra $400 credit..

nelsona · Post by **nelsona** » Sat Feb 27, 2010 1:52 pm

As isaid, you ahve achoiuce. You prepare both ways and decide.

bradcc · Post by **bradcc** » Sat Feb 27, 2010 9:40 pm

Thanks very much for your help!

bradcc · Post by **bradcc** » Sun Mar 14, 2010 12:31 am

One more question, for the Canadian income that I made while still living in BC, should I pay 1) the provincial tax on it or pay 2) the 48% surtax for non-resident?

I actually pay less tax under 1) than under 2). However, ufile.ca automatically removes the provincial tax and includes the 48% surtax as soon as I select the "Emigrant" option. I was able to use studiotax to model emigrant paying provincial tax and ended up with less tax to pay.

Thanks!

nelsona · Post by **nelsona** » Mon Mar 15, 2010 6:19 am

That is a software issue. You are required to pay provincial tax on your employment income, even if you were non-resident.

You are supposed to enter your province of residence, and a departure date.