Let me start off by saying I am aware of how the US designs residency, how Canada designs residency, and the tax treaty tiebreaker rules.
I am moving back to Canada in March after >4 years spent in the US after having broken all residential ties. My dependents (spouse, child) are staying behind in our permanent home with my personal property (furniture, etc) for several months while we wait for my spouse's permanent residency paperwork to come through. I will begin employment in Canada shortly after arriving, but plan to live in a hotel for several weeks to a few months.
My question is, at what time do I switch from being a US resident for tax purposes to a Canadian resident for tax purposes?
1) When I physically disembark from the airplane in Canada (some government websites implies this is the case but are contradictory)
2) When I begin employment in Canada (secondary residential tie)
3) When I establish a permanent home in Canada (significant residential tie)
4) When my personal property arrives in Canada (secondary residential tie)
5) When I obtain a Canadian health insurance/driving permit (secondary residential tie)
6) When my dependents move to Canada (significant residential tie)
If I go by the Canadian-US Tax Treaty tie-breaker rules, it goes by where I have a permanent home. But the Canadian residency rules state spouse and dependents as significant residential ties, so I'm confused.
Also, if I have a permanent home in both countries, it goes by my center of personal and economic interests. Where is that if I have a job in one country, and dependents in the other?
Thank you.
On which day do I become Canadian Resident?
Moderator: Mark T Serbinski CA CPA
Re: On which day do I become Canadian Resident?
When you are MOVING to Canada, it is when you establish a permanent abode (not a hotel) and have none anywhere else.
If you also have a home elsewhere, then it becomes a matter of where your centre of vital interests are, including your family. If they remain behind in US, and you continue to visit them (you need to be regularly visiting them, not they visiting you), you could claim US as still being your residence. Once they join you permanently in Canada or you vacate your other home, that day becomes your day of arrival in Canada.
If you also have a home elsewhere, then it becomes a matter of where your centre of vital interests are, including your family. If they remain behind in US, and you continue to visit them (you need to be regularly visiting them, not they visiting you), you could claim US as still being your residence. Once they join you permanently in Canada or you vacate your other home, that day becomes your day of arrival in Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: On which day do I become Canadian Resident?
That makes sense.
With Covid, lockdowns, travel bans, and quarantine requirements, no one is going to be visiting anyone until there is a permanent move. Does that change anything?
Does AirBnB count as a hotel, or is the line blurred?
With Covid, lockdowns, travel bans, and quarantine requirements, no one is going to be visiting anyone until there is a permanent move. Does that change anything?
Does AirBnB count as a hotel, or is the line blurred?
Re: On which day do I become Canadian Resident?
AirBnB is NOT a permanent abode.
CRA announced guidelines due to COVID which reduces the likelihood of being considered resident if "trapped" in canada.
From what you describe, you are still US resident. Of course, any CDn-source income you make will be taxed in Canada, as well as on your regular US return, with IRS giving you credit for the CDn tax calculated on your Cdn return.
This would be the time to trigger any optional US-sourced income before your family moves up, so that it is taxed only on your US return.
You might also want to sell any "losing" investments you have to trigger a capital loss that you can use in US. I would wait to sell any winners until after moving.
CRA announced guidelines due to COVID which reduces the likelihood of being considered resident if "trapped" in canada.
From what you describe, you are still US resident. Of course, any CDn-source income you make will be taxed in Canada, as well as on your regular US return, with IRS giving you credit for the CDn tax calculated on your Cdn return.
This would be the time to trigger any optional US-sourced income before your family moves up, so that it is taxed only on your US return.
You might also want to sell any "losing" investments you have to trigger a capital loss that you can use in US. I would wait to sell any winners until after moving.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing