Dual citizen considering return to the US

[backcountry]

I am a dual citizen currently living in Vancouver with my Canadian citizen wife. I am interviewing for a job in Seattle. How would residency be determined based on the following facts:

- Work in Seattle as an employee. Possibly telecommute one or two days a week from Vancouver.

- Rent an apartment in Seattle.

- Maintain house in Vancouver, jointly owned with wife who would live there full time.

- Travel frequently between Seattle and Vancouver.

- Give up BC health card, drivers license, etc.

- Transfer non-registered investments to US broker but probably maintain Canadian bank account for paying house expenses, etc.

I see that Article IV 2.(d) of the treaty has a process for the US and Canada agreeing on residency. I'm just not sure how "permanent home," "habitual abode," and "centre of vital interests" would be interpreted with the facts outlined above.

[nelsona]

Your frequest trips to canada, given that your wife would still be there would invariably make you a Cdn resident.

You would definitely have permanent abode in both countries and your ability to work in canada would make your being in Seattle completely optional.

if your intent is to become a US tax resident, she should visit you, not the other way 'round. This will build up your days in US as an argument for US tax residency, as would working AT WORK, not from BC.

Proactively canclling BC health and DL etc, are not crucial, they will happen as a mater of course. You will need WA DL within weeks, and BC health would lapse. And without spending most of your time in WA. would be a meaningless gesture.

Given that you would not bea US resident, why not just explore being a contractor for this comapny living and working in BC.

[backcountry]

Thanks, nelsona.

It's not really my intent to become a US tax resident. It might be a little cheaper taxwise and might simplify filing a bit but I would like to come back to Vancouver on weekends. I'm just trying to anticipate pitfalls and come up with the best way to structure the working relationship.

I have considered proposing a contractor relationship and I have seen your advice to other posters to get additional cash in lieu of benefits. Very good idea.

I anticipate that my presence at their offices would be required several days a week -- they may agree to four days on site / one day telecommuting each week or three days on site / two days telecommuting.

Given that amount of time in the US, what are the issues? Would I run the risk that the US considers me a resident too or is the intent of Article IV of the treaty that only one country should claim me as a resident?

I would expect that for the US returns, I could exclude the income from the telecommuting days on Form 2555 and then claim FTC for tax on income from the days at the office, applying Article XXIV 4. of the treaty. Can you comment?

[nelsona]

As a US citizen, it doesn't really matter if they would consider you a resident or not. Your US-sourced income would not be eligible for 2555 exemption anyways. It will be difficultto consider any of this income as non-US sourced.

So you would be paying US tax on this income and Cdn tax on everything else -- just like a Cdn working part time in US.

The goal of only being resident of one country or the other is for non-US citizens, as they would avoid paying tax in one or the other country. US citizens don't get that luxury.