Should I file my Canadian income in the US or not?

charlesm20 · Post by **charlesm20** » Sun Apr 10, 2011 5:52 am

I worked in the US under H1B from 2006 to May of 2010.

My last day of work with US employer in the United States was May 7, 2010
I had cleaned up my ESPP and investments by May 13, 2010
My first day on the new job with the Canadian company was May 12, 2010
I left for Canada on May 12, 2010 to re-start my bank accounts, etc.
I returned to the US to clean up misc. affairs on May 20, 2010 and declared myself a visitor since my I94 and H1B was no longer valid
I left the US on May 22, 2010 for the UK on business with the new company, and returned on May 28, 2010 to finalize any remaining affairs in the US
I also took time off between May 28 to June 6, 2010 in the US, which I left for Canada again, and have no returned since.

During this time, my wife was organizing the move of goods while I was in Canada and travelling on business except for the short time in between May 28 and June 6, 2010 on vacation.

My big problem is I noticed my first paycheck from the Canadian company took place on May 28, 2010. I was registered as a Canadian employee, and started in Canada.

Would I need to declare this income as part of my 1040NR and 1040? The Canadian company registered this as part of the Canadian T4. I did not render any services nor actually worked in the US for the Canadian company.

Thanks and apologize for the long story.

nelsona · Post by **nelsona** » Sun Apr 10, 2011 8:05 am

Well if you file a full year 1040, you will report all income regardless. That's what is required for 1040.

Your question pre-supposes tha tyou will file dual-status for the year, in which case you need to determin when your departure date would be, which would likely be sometime in June -- so yes, you would report the Cdn income from befroe that date on your partail 1040.

Most in your situation do not bother with dual-status in departure year, since it is the same problem as first year: no joint return and poor deductions.

So, you shouldn'tworry about whether you need to report it as a dual-status. Just report it, and work on seeing that you qualify for the foreign earned income exemption (2555) and/or the forieign tax credit (1116).

charlesm20 · Post by **charlesm20** » Sun Apr 10, 2011 11:24 am

Thanks nelsona,

In other words, my official departure would be regarded as June 6, rather than May 12, despite my re-entry to the US for only 5 days as a visitor.

I guess it would be risky to file my official departure as May 12 before that payment in May 28.

nelsona · Post by **nelsona** » Mon Apr 11, 2011 7:55 am

I guess you missed the point. You will end up reporting ALL 2010 income on your full year 1040.