Dual US/Canadian citizen living and earning income in the US

SandraDee · Post by **SandraDee** » Mon May 10, 2010 12:38 pm

Hello,
I was born in Ohio and moved to Canada at age 2. I have dual citizenship. I just moved to the US this year to attend school and am earning income around 25k per year. I am paying US tax on this income. Can someone please confirm that I don't also have to pay Canadian tax? My Canadian peers in my academic program are paying tax to Canada and are receiving some tax breaks under a treaty. My friend was asking me today if I claimed my US income on my Canadian tax return. I didn't - I just assumed that I don't have to pay since I'm not in Canada anymore, am a US citizen and am paying US tax on the income.

The funny thing is that as a US citizen in Canada one has to file US taxes and disclose foreign income. I had to backfile about 7 years worth of taxes, even though I didn't have to pay anything. Does Canada require the same thing? i.e., do I have to let Canada know about all of my US income from now on simply because I'm also Canadian?

Any insight would be greatly appreciated!

nelsona · Post by **nelsona** » Mon May 10, 2010 1:06 pm

here is the issue.

Cdn students in US cannot establish tax residency in US (F1/J1 do not become tax residents). Thus they cannot be considered to have left canada. They therefore continue to report and pay tax in canada on their world income ( they report and pay tax in US too.)-- receiving credit for any US tax they pay.

You, however, are not studying in US under a J or F visa -- you are american.

Therefore, since you live in US (and presumably don't have a home and spouse living in Canada), you are no longer Cdn tax resident, and do not have to report any foreign income in canada.

SandraDee · Post by **SandraDee** » Mon May 10, 2010 2:19 pm

Thanks for your response. I don't have a home in Canada but I do have a common law partner. Not sure if that makes any difference.

SandraDee · Post by **SandraDee** » Mon May 10, 2010 2:21 pm

Also, do you know what would happen in a situation where I got a scholarship from Canada? In that case I imagine I would pay tax to Canada and not the US (assuming that the particular scholarship is usually taxed by Canada - some are and some aren't).

nelsona · Post by **nelsona** » Mon May 10, 2010 4:24 pm

If your income is from canada, then canada gets first crack at the tax on this income, but you are still non-resident and only required to report Cdn income.

As a US citizen, you will always report all income from everywhere, and get credit for Cdn tax paid on Cdn-source income.

If your common-law partner is in canada, then you have a home in canada, no?

SandraDee · Post by **SandraDee** » Mon May 10, 2010 4:52 pm

Thanks. Well, my common law partner just has a one-bedroom rental. It's his home. I just visit once in a while and I wouldn't count it as a home - I have my own apartment in the US. Not sure whether we are still defined as commonlaw under these circumstances and what the implications are for taxation....?

nelsona · Post by **nelsona** » Mon May 10, 2010 4:54 pm

As long as your visits are infrequent, and your US home is 'permanent' then you are considered US resident and cDn non-resident.

You would want to file a departure return in canada, based on the day you left.

SandraDee · Post by **SandraDee** » Mon May 10, 2010 5:19 pm

thanks for the tips!