Canadian working in the US Tax filing

[Umoney]

Hello,

I have some questions regarding filing taxes for a Canadian citizen working in the US.

Background: Moved to the US in May 2023 on a TN Visa with my spouse (she entered on a TD Visa) and have been living in the US (Texas) since. As of October I got converted to an H1-B Visa and my spouse is in the process of getting her H4 Visa. We both pass the Substantial Presence Test.

1. Do my spouse or I need to declare our global income that we earned in 2023 when filing taxes?
2. Can we/should we file our taxes jointly?
3. I received a relocation bonus from my employer in the year 2022 but did not file taxes for that year as I had not yet relocated to the US by that time. Do I include this in my 2023 tax filing? Is there any penalty?

Thanks, very much appreciated!

[nelsona]

Because you met SPT, you have the choice of filing dual-status (part year 1040NR part year 1040), or filing pure 1040, joint, the latter usually yields a much lower US tax than the former.

On that 1040 joint, you would report world income, but be able to use any deductions and credits available to any other US couple, including foreign tax credits and/or foreign earned income exclusion. But it is always good to run both methods above, in case there is some weird Cdn income that would be overtaxed in US.

If you choose the 1040-only method, I see no reason why you would file married separately.

As to the 2022 income, it be reported on a 1040NR for 2022, not 2023. It should also have been included in your Cdn return for 2022.

[headachetaxes]

Hi Nelsona,

I am in a similar situation, as I moved from Canada to the US in late Feb on a TN, and have been in Illinois since. My wife was already in the US on an F1 for the past several years.

I have income from January and Feb from the Canadian company, and then wages for the US company after entering on the TN. When filing the US return, do I include the Canadian income even though it wasn't earned after I entered the US? I'm willing to enter my Canadian income, but I go from having a tax return to a hefty tax owing.

Pub 519 discusses dual-status and when to set resident start date. In my situation, I also entered the US as a visitor during January (a couple of work trips to the US and then to visit my wife for a couple of weeks). Pub 519 says that if that's the case, my start date would actually be the first day I was present in the US. I can reduce up to 10 days by submitting a signed paper.

Thanks for your help

[Mairol]

The Canadian company paid me in January and February, and after I crossed the Tennessee River, the US corporation paid me money.
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