Filing as a Canadian resident with US income on TN-1

alitxtx · Post by **alitxtx** » Sat Mar 07, 2015 1:10 pm

Hi, thanks for the useful information on this forum.

I think there isn't anything unusual with my case, but I want to confirm my understanding:
- Single with no dependent.
- Was in US for 173 days in US 2014 (including partial 2013 and 2012).
- Moved to US in the end of Oct. on a TN-1, notified CRA the address change.
- Had Canadian income until April 2014.
- Had US income Nov. and Dec. of 2014.

For my US federal return, I will be filing 1040NR as a nonresident alien, and report only my US income, with form 3903 to claim moving expenses.

For my Canadian return, since I am filing as a Canadian resident, I am going to use a software to do it for me and use my Canadian address. I wasn't sure if I need to report my US income. I called CRA to ask and was told that I do need to report my worldwide income. However, in order to avoid being double taxed, one agent told me to claim tax credit on my US return, the other told me I should claim it on my Canadian return. That means that I should do one before the other depending on where I claim my tax credit. I would like to get some advice and clarification on that, and if there is anything else I am missing.

Thank you very much!

nelsona · Post by **nelsona** » Sat Mar 07, 2015 3:20 pm

Incorrect on the Cdn filing.

You are a departing resident, so you should be declaring so on your return (ie. departure date), this will avoid having to report US income after that.

You will have to report any US income from before your departure date, and can take credit for the US tax on that portion.

The agent was incorrect in telling you that you are resident.

But you should not file as a full year Cdn resident. How you file in US has no impact on this. A 1040NR is the correct way.

alitxtx · Post by **alitxtx** » Sun Mar 08, 2015 12:53 am

Thanks for the quick reply! Some further questions:

1. Is it correct that if I am declaring my departure on my return, I will have to paper file the return?

2. Is there anything I should be aware of regarding to "departure tax", or any consequences/considerations?

3. Is it best for me to use up all my RRSP deduction since I don't know when I might move back to Canada?

4. I didn't learn about the consequences of my investments in Canada before my move. I still have a couple bank accounts, an RRSP of around $5k. I also have two tax free saving accounts, one is cash and the other is a GIC that matures in 2018. I know that I don't need to worry about them on my US return for 2014, but what should I do in the meantime? (close them all the TFSA?)

Thanks again!

nelsona · Post by **nelsona** » Sun Mar 08, 2015 9:19 am

!. Probably. So what?
2. Read the emigrants guide from CRA.
3. Since these all existed in 2015, you will need to handle these on your 2015 US return. So you need to close the TFSAs now.

nelsona · Post by **nelsona** » Sun Mar 08, 2015 9:21 am

sorry
3: since you would have already made the rrsp contributions, it would be pointless now to not use them as a deduction. It is too late to make a contribution for 2014.