GC holder working in Canada

[xborderdad]

Hi nelsona -

Have a couple of questions regarding being a GC holder, living in the US but working in Canada for the Govt of Canada.

a) would I only declare that income on the Canadian return (currently, per the treaty, I only declare the income from my work under a TN visa in the US...but a GC is potentially on the horizon)?

b) What implications would this have for RRSP and TSFA contributions? If I still earn my income from the Govt, am I considered to be resident and still allowed to make contributions?

thx

[nelsona]

Because you would for Cdn government, there are certain special tax considerations:

a) I'm not sure what you mean by "per the treaty, I only declare the income from my work under a TN visa in the US". Why? You said you work for the Govt. That income is exempt from US tax. Whywould you have a TN to work for the Cdn government. Govt workers have a different status. Am I missing something?

b) IF you are a deemed resident of Canada, it is up to the brokerage if they wish to keep you as a client. Your TFSA income would be taxable in US, so may not be a great idea.

You need to clarify why you have a TN and a Cdn govt job, and who is sponsoring your GC?

[xborderdad]

That info would have helped...I also work in the US on a TN visa - teaching a course at a university, and my wife (a GC holder) petitioned for me to get a GC.

I guess then, liquidating the assets in the TSFA and opening up a Roth would probably be the best approach.

[nelsona]

No, not a Roth, since you are deemed resident of Canada, Roth will not be shielded.

Gc sponsorship by GC-holder takes years, howclose are you to getting it?

Where do you(and she) actually live?

[xborderdad]

I was very close...I got it Tuesday. :)

Up until that point I was living in Ottawa and she just across the border in NY state. Now NY state is going to be our home (and I begin the process of dealing with my primary residence, and the investments)

[nanic]

Hi Nelsona,

Can you please tell me what article of the treaty says that income earned working for CDN Government is exempt? Does that apply also to US Citizen living in Canada?

Thanks

Paul

[nelsona]

Article XIX.

[nanic]

Thanks Nelsona,

I read the article, however the way I read it, it only applies for a US citizen working in Canada for the US government and vice versa in the US. It does not apply for a US citizen working in Canada for the Canadian government. Unless I interprete it wrong.

[nelsona]

Yes, you interpret it wrong. It says nothing about residence, nor where the work is performed.