Canadian working in US, family and permanent home in Canada

stellal · Post by **stellal** » Sun Apr 08, 2012 2:51 am

Hi,

I worked in US (H1b) last week and my presence in US exceeds 183 days. I usally stay in US on weekdays, and go back Canada on weekends, my wife and child stays in Canada.

I talked with two accountants, one suggested I file us tax with only us source income, not global income because under CANADA-U.S. TAX TREATY TIE BREAKER CLAUSE I tie-break to Canada, another accoutant thinks I should file us tax with my global income.

I am really confused, should I file us tax with us source only income or global incomes?

Thanks a lot.

nelsona · Post by **nelsona** » Mon Apr 09, 2012 10:11 am

First, you are stil Cdn resident, so will report all income in canada.

As to how you file in US, you have several choices; your goal should be to reduce US income only to a level you can fully use the credit in canada.

Your options are:

full year 1040, reporting all world income
1040NR, reporting only US-sourced income, and attaching an 8833 expalining you are a Cdn resident.

1040NR using article XXV of the treaty, which I've explained elsewhere.

You choose which ever is easiest besed on lowering your US tax just enough to be les than your Cdn tax on that income.

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stellal · Post by **stellal** » Mon Apr 16, 2012 6:19 pm

Nelson, thanks for your reply. I prepared to file 1040NR and form 8833 using article iv (residency).

I am concerned with the fact that I already applied I-140 and approved, have not filed I-485 yet, I am wondering whether that affect my canadian residency.

Thanks for your help.

nelsona · Post by **nelsona** » Tue Apr 17, 2012 7:38 am

That should not make a difernce, but would have been something useful to mention.

stellal · Post by **stellal** » Wed Apr 18, 2012 12:51 am

Nelson, thanks for your reply. I still have a few questions.

1. Do I need file form 8938, I already mailed it out. have not done Fbar, do I need to do fbar?

2. I am preparing my canadian tax return, as my income is from us, can I claim the travelling expense (like lodging) since lodging is only for the employment (I rent a room and stayed there only when I work in us) ?

Thanks a lot.

nelsona · Post by **nelsona** » Wed Apr 18, 2012 9:29 am

If you met SPT, and are using the treaty to avoid filing 1040, then you need to file FBAR.

2. No.

mackayr · Post by **mackayr** » Wed Aug 08, 2012 4:20 pm

I came across this post looking into a similar matter. My situation is a fellow who works 2 weeks in the US, lives one week in Canada, throughout the year. He filed a 1040NR (married filing separately) each year, and claimed non-residence using 8833. I now understand (after reading this thread) that he should have filed FBAR and 8938 even though he was a non-resident under treaty.

For FBAR, he's way over the $10k, so we'll need to back file those (6 years?).

For 8938, even though he meets the SPT, he's a bonafide resident of Canada (Canadian citizen, wife is Canadian citizen, permanent home in Canada, wife is in Canada for 320+ days each year).

Is his threshold for filing 8938 $200,000?

What about the 8891? I can't find where this would be required for a treaty non-resident. In other words, I cannot see any instructions that would suggest that treaty non-residents would be subject to filing the 8891.

Is he exempt from filing 8891?

I expect that if he had not taken the non-resident position (8833/treaty), then he WOULD be required to file the 8891. Is this correct?

Thanks in advance for any insights.