Year of transition taxes - Moving from Canada to US

[barracudan]

Hi - I am moving from Ontario to Michigan around June/July and I am in a position to choose which country to be a resident for more than 183 days the tax year 2024. Does that make any substantial difference? I.e. filing as a non resident of Canada vs non resident of US for tax year 2024?

My Canada home sale is scheduled to close mid July and my wife will stay back until then for the purposes avoiding capital gain complications for that.

[nelsona]

For Canada, number of days don't matter. You would file as an "Emigrant" based on the specific date you leave Canada. If you leave Canada before your spouse, you will still be selling your "half" of the house as a non-resident. No taxes, but some paperwork in Canada.

If you start working in US but continue to live in Canada, you will have to pay Cdn tax on your US wages until you leave. Given your proximity to the border, and the fact that your spouse will be in Canada, and you will be going back and forth, you will likley not be able to declare a departure daye until your spouse joins you in US, after the sale.

For US, you will likely file a full year 1040, so when you leave doesn't really matter for the US side.

[barracudan]

Thank you, so might as well delay my departure to the US to sync with my wife after the house sale, and file as non resident in the US?

[nelsona]

You likely will not want to file as a non-resident of US, as you will be taxed on your US income at a very high rate.
As I said, you will likely want to file a full year 1040 (joint with your spouse) as this will be the lowest US tax. You do not have to meet any day requirement to do this, as Cdns enjoy the "privilege" of filing just like an American woould under the same circumstances.

You house sale will not be taxable in either country when you do sell, regardless of when you become non-resident of Canada.

[barracudan]

Perfect, thank you for that info…. Makes planning for things a lot easier :)