Change T1 to non-resident Return

[Jimmy23]

Hi All,
I need some help and advise with my tax return (messed up)
Case:
Canadian Citizen/ US Green Card
Tax Year 2018

Ties to Canada: Ties to US:

1. Home (renting) 1. Home (renting)
2. Wife, Dependent 2. Bank Account
3. Bank Account 3. Employment
4. Credit Card 4. 401k
5. RRSP account 5. Credit Cards
6. Professional Membership 6. Driver License and Registered Car
7. Health Insurance (through employer)
8. Membership (professional, Social, Religious, recreational)
9. Local Primary Doctor
Visits to Canada:
About 90 days/year (dropped to 2 days/month as of this year)

CRA Tax return filed: IRS Tax filed:
No Canadian-source income Resident: 1040
Resident: T1 with foreign tax credit on foreign income with RRSP contribution

Questions:
1. Can I amend Canada tax return from Resident to Non-Resident using US-Canda Tax Treaty? If so, how to do it?
2. Will I be subject to RRSP over contribution penalty (1% for each month) in case CRA agrees that I should have filed as non-resident?

Thank you indvance for your help

[Jimmy23]

Sorry about the confusing format:
Hi All,
I need some help and advise with my tax return (messed up)
Case:
Canadian Citizen/ US Green Card
Tax Year 2018

Ties to Canada:
1. Home (renting)
2. Wife, Dependent
3. Bank Account
4. Credit Card
5. RRSP account

Ties to US:
1. Home (renting)
2. Bank Account
3. Employment
4. 401k
5. Credit Cards
6. Professional Membership 6. Driver License and Registered Car
7. Health Insurance (through employer)
8. Membership (professional, Social, Religious, recreational)
9. Local Primary Doctor

Visits to Canada:
About 90 days/year (dropped to 2 days/month as of this year)

CRA Tax return filed:
No Canadian-source income
Resident: T1 with foreign tax credit on foreign income with RRSP contribution

IRS Tax filed:
Resident: 1040

Questions:
1. Can I amend Canada tax return from Resident to Non-Resident using US-Canda Tax Treaty? If so, how to do it?
2. Will I be subject to RRSP over contribution penalty (1% for each month) in case CRA agrees that I should have filed as non-resident?

Thank you indvance for your help

[nelsona]

First off, your first return after you leave Canada is an Emigrant return with a departure date. So when did you actually leave Canada?
Second, How have you been filing since that time?

as to your situation in 2018, the fact that your spouse was still in Canada and you were visiting regularly probably kept you resident until she left Canada too.

But, just to cover the mechanics of changing your return if you were allowed to:

1. Yes, you can, by adding a departure date, and then only reporting world income before that date (you said you had no Cdn source income). You would file a T1-ADJ
2. If you made contributions based on wages you reported on your T1 which you are no longer reporting (ie earned after you left) then yes, you *might* be subject to overcontribution penalties. This unlikely however, since your 2018 contribution limit would have been based on earnings BEFORE 2018, so only RRSP contributions made after 2018 might get you in trouble as the limit would be based on "incorrect" earnings reported.

[Jimmy23]

Thank you @nelsona,
Much apprecited!
I left Canada in 2018 when I got my green card. Prior to that I was back and forth between US and Canada ( almost equal time spent in both countries)
I have always filed the same way up to 2022, that is resident for Canada and Resident for US.
My wife is still in Canada, however, I have no dependents (from tax perspective), and my visits to Canada are at the most 2 days/month.
The subject came up when I was discussing my taxes with an accountant who said that I cannot be resident for both US and Canada.
He explained briefly the Tax treaty and mentioned that I should probably file as deemed non-resident for CRA based on Habitual abode tie breaker since all other tie-breakers are undecisive.

Thank you again for your help and explanation,

[nelsona]

I agree that you should have filed a departure return in 2018, and only non-resident returns thereafter, only if needed.

Just to clarify, you had to file a 1040 (as opposed to 1040NR) in US because of your Green card. You would need to do this regardless of whether you were considered Cdn resident or not. So technically US citizens and Green card holders living in Canada file as "resident" in both countries, which is what you have been doing.

By what you have said you probably became "deemed non-resident" (which is treated like non-resident, at some point after 2018.

In my opinion, you would need to file an NR73 with CRA for 2018 (or whichever year you left) and get their buy in, before attempting this conversion.

Any reason you did not check this out years ago, when you were moving?