Change in Residence

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TNcanadian
Posts: 4
Joined: Fri Jan 23, 2009 1:57 am

Change in Residence

Post by TNcanadian »

Hello -

My family (and I) are Canadian citizens. We moved to the US (for my employment) in 2007 and are presently in the US in TN/TD status. Our status changed a few times along the way since 2007, due to job changes, etc, but we never moved back to Canada - only within the US. We have NEVER been out of status. The last Canadian tax return we filed was in '07, and we've had no dealing with CRA since. We consistently file a joint 1040 in the US.

We are considering resettling in Canada, under an arrangement where my family would live in Canada (Ontario) and I would fly home from the US on weekends. I am keenly aware that I would become a Canadian resident again.

Questions:

1. If we go ahead with this, will our absence (since 2007) be deemed to have been long enough by CRA that they won't try to argue that we never intended to leave, and thus owe back taxes for the half of '07 after we left Canada, and all of '08, 09, and '10? We severed all residential ties back in '07 (sold the house, closed accounts, driver's licences are all expired, etc), but all this being said, not sure how this is going to look. Some info based on experience would be helpful here.

2. I'm requesting, and am likely to get an H1 this year, and my employer will also be putting in paperwork for a GC (assuming the H1 goes through). Will this whole commuting to Canada thing impact my GC eligibility or application process ?

3. In addition to the above, I have my employer's support to work from home on certain days here and there. If "home" is Canada, does working from home present any complications, if done infrequently and on a more-or-less adhoc basis ?

4. What implications would such a move have on auxilary taxes, such as Canadian EI, CPP, and US FICA. Would I have to pay both ?

5. Based on experience, under such an arrangement, would the family total tax burden likely change much? We pay Federal + NY state already, + FICA and heavy medical insurance premiums (which would also go down, since my family would no longer require US coverage).

6. One of the benefits to undertaking the arrangement we're thinking of, is it would allow my wife to work (which she cannot do in the US). If she did return to work in Canada, how would this affect our US taxes ?

In addition to the above, we have additional questions relating to 401Ks/RRSPs, RESPs (for the kids), non-tax-sheletered general investments, and real estate assets in both the US and Canada. I suspect a tax consult is probably in order, and would appreciate any contacts in this respect.

Tx
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

"I am keenly aware that I would become a Canadian resident again. "

Not necessarily, since you wiould still be spending most of your time in US, but its a good chance taht you would be Cdn resident.

1. As long as you took care of departure tax, they will not come back for you on anything. US has trwaty which made you resident there the moment you left.

2. If they put you on H1 before trying GC, you will have no impact commuting at anytime while waiing for GC. You will have to move to US once you get GC, or get a commuter GC.

3. It can complicate your Cdn tax situation.

4. As an employee, you would pay FICA only. However , by working *some* in canada, you may have to pay CPP. Best to avoid.

5. about the same, much more complex.

6. You would likely still want to file jointly in US, exempting her income using 2555. This would give YOU lower taxes in US. You may also benefit from a XXV(2) non-discrimaination return, which I've explained here many times.

You should read more of the posts on this site

7.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
TNcanadian
Posts: 4
Joined: Fri Jan 23, 2009 1:57 am

Post by TNcanadian »

Thanks nelsona

==> "As long as you took care of departure tax"

Departure tax? When we left, we had *no* Canadian assets, except for a deferred pension asset from my former Canadian employer (i.e. my vested pension which is not accessible until I reach retirement age) and RESPs for the kids. Do either of these require a departure tax ? If yes, I'll probably need to correct this with CRA. Any advice on sources/publications would be appreciated.


==> "Not necessarily, since you wiould still be spending ..."

I'm curious on this point. How can I find out concretely whether or not I would be treated as a Canadian resident for tax purposes ?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Assume Cdn tax residence.
Look at Emigrants guide for what you should have done when you left (like put a departure date on your tax return).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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