Hi, I have recently moved to the US to work under a 3-year TN visa for a US based company (Jan 27 to be exact). My wife and two kids will join me later this year in June. I have sold my house in Canada on Dec 2013 and just received an accepted offer to purchase a house in California (to be closed in 30 days). Now my questions are:
1. Can I consider myself a deemed non-resident of Canada from the date that I physically entered to the US even though I am a factual resident of Canada given that my family will remain in Canada for the next few months and I have other ties with Canada until then? If the answer is no, how about the date that I purchased our new house? I should note that my name and my wife's name will be on the title of the new house. Specifically I would like to know if the first tie-breaker rule of the US-Canada treaty is applicable to my situation.
2. Do you in general recommend that I file Form NR73 now or just wait to file my departure tax forms at the end of the year noting that I have Canadian income to declare for Jan 2014? Ideally, I would like to pay tax on my Canadian income for the first month and not on my worldwide income for first 6 months just because my family are here until June.
3. I have to return the money I took under the HBP after 60 days since I declare my non-residency, can I withdraw from my current RRSP accounts, pay 25% withholding tax and then re-contribute the money to the same RRSP account and count it as the return of the HPB? To be honest I am a bit cash strapped because of our recent purchase in the US so I am looking for the most tax effective way to meet all my tax obligations in Canada.
I really appreciate your feedback on these issues.
Deemed non-resident of Canada clarification
Moderator: Mark T Serbinski CA CPA
1. Yes, as long as during this brief period of transition, THEY visit you rather than you visting them.
2. Never file NR73. Next spring, simply report your departure date as 1/27. Just make sure that you tell all your Cdn payors that you have left.
3. You probably can, but you would be better off just having the HBP added to your income for 2014. You want to shrink your RRSP not grow it. Run a fake departure return for "2013" with one months salary and the HBP and see what you get.
2. Never file NR73. Next spring, simply report your departure date as 1/27. Just make sure that you tell all your Cdn payors that you have left.
3. You probably can, but you would be better off just having the HBP added to your income for 2014. You want to shrink your RRSP not grow it. Run a fake departure return for "2013" with one months salary and the HBP and see what you get.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thank you so much for your invaluable insight. Now my follow up questions are:
1) Given that my US employer has a Canadian subsidiary and I have to travel to our Canadian office periodically during this transition period, is it still causing a problem to consider myself as a deemed non-resident of Canada (i.e., my trips to Canada are work related not for visiting my family)?
2) Having the provincial Medicare card and the Canadian Driver licence until June are problematic or I should cancel them as soon as possible?
1) Given that my US employer has a Canadian subsidiary and I have to travel to our Canadian office periodically during this transition period, is it still causing a problem to consider myself as a deemed non-resident of Canada (i.e., my trips to Canada are work related not for visiting my family)?
2) Having the provincial Medicare card and the Canadian Driver licence until June are problematic or I should cancel them as soon as possible?
1) Where is your family living between now and June. The trips back to canada (for whatever reason) make it difficult to establish that you are truly living in US
2) if you live and work in California, you MUST get therir DL in 30 days, so your Cdn DL is of little use to you. No point keeping your prov card either since you no longer reside in that province. It goes to acting more like a US resident.
2) if you live and work in California, you MUST get therir DL in 30 days, so your Cdn DL is of little use to you. No point keeping your prov card either since you no longer reside in that province. It goes to acting more like a US resident.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best