Background:
Husband and wife, Canadian citizens, on L-1/2 visas in US.
I moved to NY in Jan 2014 while my spouse continued working in Canada for all of 2014, and we also owned a residence there (bought in 2009). We both filed as Ontario residents for 2014, and I filed as a non-resident in the US citing closer ties to Canada at the time (she did not file). She left her Canadian job in Feb '15 and began a new job in the US the same month. We sold our Canadian residence in Mar '15, and lived together continuously again in a rented apartment in NY from the time she left her Canadian job.
Where I am lost is on what our residency status should be.
Would I continue as a non-resident until my spouse joined me in early Feb '15, or when we sold our Canadian residence in Mar '15, or should I file as a US resident for the full tax year? Should she file as a US resident for the full year, or a Canadian resident for the first two-three months and then US resident thereafter?
Our intention is to sever tax ties to Canada, and we had only registered investments and cash throughout 2015, no non-registered assets. FBAR was filed in '14 for all Canadian bank and RRSP accounts.
US/Canada residency uncertainty after spouse moves/home sale
Moderator: Mark T Serbinski CA CPA
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Since you are in US, you don't need to worry about severing ties. You both live and work in US, and that is enough to break Cdn residency, regardless of ties.
You will file as a DEPARTING resident of Canada with Feb departure date. CRA has information on EMIGRATING tax return.
For US, you will file full year 1040 joint reporting world income. US doesn't base its tax filing on residency, you always have the option of filing a 1040 like a resident (you probably should have done this in 2014, or at least used the treaty-based 1040NR to lower your US tax, but no worries. Filing as a non-resident of US or as a part-year resident of US is a actually a punitive arrangement, so should not be your first option.
Many posts on this, happy browsing. Quite some time to be here in US (2 1/2 years) and not addressed all this here earlier. Not much opportunity to engage in some positive planning.
You will file as a DEPARTING resident of Canada with Feb departure date. CRA has information on EMIGRATING tax return.
For US, you will file full year 1040 joint reporting world income. US doesn't base its tax filing on residency, you always have the option of filing a 1040 like a resident (you probably should have done this in 2014, or at least used the treaty-based 1040NR to lower your US tax, but no worries. Filing as a non-resident of US or as a part-year resident of US is a actually a punitive arrangement, so should not be your first option.
Many posts on this, happy browsing. Quite some time to be here in US (2 1/2 years) and not addressed all this here earlier. Not much opportunity to engage in some positive planning.
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