6 months in US on TN status and returned - 2013 tax year

KevinT · Post by **KevinT** » Fri Feb 07, 2014 8:30 pm

I am a Canadian citizen, living in the GTA.

Jan 1st 2012, I started a job in TX, on TN status.

I was told the project would end in 14 to 16 months and would have to return home. TN was issued for 3 years.

[b]year 2012.[/b]

Entire 2012, I was in the US, used to come to Canada to my home ( once every two months just for the weekend to meet my friends and family here)

I filed my 2012 taxes in the US . I also filed form 8891 and 90221 . One of them I filed with my 1040 and the other one I mailed to Dept of Treasury in MI . I did make an election to defer my RRSP withdrawals.

I also filed 2012 taxes in Canada as a resident. I owed and paid
a small amount to the CRA.

[b]Year 2013[/b]

First five months of 2013, I was in the US with the same company. First week of June, the project ended and I returned permanently to Canada. ( I did go to the CBP office in Pearson and returned my I-94 and updated my nexus status). Started a full time job in Toronto with another company after a week.

I have a couple questions.

1. I have received my W2 for 2013, my Canadian home address is shown on that. The company put that as I had left the US for good. That I don't have a US address on my W2, will that be an issue when filing taxes ?

2 . I will be getting a T4 for June 2013 onwards . Will I have to report that amount on my US return for 2013 ?

3. The election to defer RRSP withdrawals, does that mean that I will owe an amount to the IRS 35 to 40 years down the line when I retire ? I dont plan to work in the US anymore.

Thanks.

nelsona · Post by **nelsona** » Mon Feb 10, 2014 9:21 am

Most Cdns, when leaving US at mid-year like you, still file A FULL 1040 for that year repoting all 2013 income from all sources, and use form 2555 to exempt their Cdn wages for the second half of the year, and form 1116 to take credit for any Cdn taxes paid on other income (interst, etc). This typically results in lowest US tax.

Your Cdn tax retunr will start in June. You will report only income earned after that date.

You correctly deferred income on RRSPO while in US (and ashould do so for 2013), but you will NOT be responsible for US tax later. You are only liable for US tax on your RRSP when you withdraw it as a US resident or citizen.

KevinT · Post by **KevinT** » Mon Feb 10, 2014 3:15 pm

Forms 2555 and 1116 , are they filed along with the 1040 or mailed in separately ? Is it available in the US tax softwares ?

Also , why is it that I don't have to report my US income for the first 5 months of 2013 when I do my Canadian taxes for 2013 ? I believe I m considered a Canadian resident as I did not file any exit paperwork when I left in Jan 2012.

I did call the CRA ( in December 2011) and ask about the exit requirements , becoming a non resident , NR 73 etc. They said since I will be gone for only 14 months and plan to visit Canada regularly , and that I do plan to come back and resume working in Canada , I don't have to do it.

nelsona · Post by **nelsona** » Mon Feb 10, 2014 3:28 pm

Well, you probably should have filed an exit return in 2012. CRA doesn't always give the best advice, nor do they take the treaty into account, where clearly you had become a US tax resident. Treaties only allow you to be resident of one country at a time.

I was focussed on your US return. 2555 and 1116 are standard IRS forms available in all s/w packages.

KevinT · Post by **KevinT** » Mon Feb 10, 2014 9:05 pm

thanks Nelsona.

Just to confirm

US taxes for 2013 - I will report my W2 income ( Jan to May 31st 2013) + the amount on my Canadian T4 ( June to December 2013 ) along with 8891 and 90221.

Canadian taxes for 2013 - I will include only my T4 amount . I will not be including my US income. Please confirm that this step is correct as I thought that I had to report all worldwide income.

nelsona · Post by **nelsona** » Tue Feb 11, 2014 9:57 am

If you want to file a half-year returning Cdn return for 2013, you first need to file a departure return for 2012. You can't say "I'm back" if you never told them you left.

For US, you are correct, except you will then exclude the Cdn wages using 2555, and the FBAR form has changed. It is no longer TD F90-22.1. It is now an online FinCEN form, as your software will explain.