TN and Resident Status

[Sujane80]

I posted this over in the Immigration Forum first but its a tax question.

I know its important to not be considered as a resident of the US even if there on a TN for less than 183 days per 12 month period. If he were to take a short-term lease on a furnished apartment, or even something considered "corporate" housing, instead of staying in a hotel, would that considered as acting like a "resident" if the issue were to be raised? Or is it strictly the amount of time he spends in the US? Is 183 days TOTAL time - as in if he is there a month, comes back to Canada for a week, then returns for a month?

And what if I were to go stay with him for more than say a month or two? We do own a house in Canada but may be renting it out.

[nelsona]

There is no real issue in becoming a US resident, even if one exceeds the 183 days in a calendar year, as long as one's residential ties in Canada remain stronger than US. One simply uses the treaty to remain Cdn resident.

What DOES occur however is that instead of your US income being only taxed in Canada, spending 183 days in ANY 365 day period makes that income taxable in US (still as a non-resident). The treaty permits IRS to tax the income from work done in US during any such 365-day period, on an annual basis.

So, while being in US for more than 183 days will not necessarily make your WORLD income taxable, it will make your US business income taxable, which it would not ordinarily be if you were in US less than half of the time.

[Sujane80]

Yes, that is what we want to avoid - triggering being taxed in the US. So I was wondering where the line was on that.

[nelsona]

As I said: by having more residetial ties in US than canada. A permanent place to live in canada vs. a temp housing situation in US would do this, along with all your social ties in canada.
If married, the other spouse would remaining in Canada would also be a requirement.