US checkup and J1/TN provincial questions

matthew12 · Post by **matthew12** » Mon Apr 24, 2017 9:35 pm

Hello,

I am a Canadian citizen currently working in the US. I have an RBC account in Canada with less than $10 000 and no investments in it. I closed my TFSA shortly after moving to the US and do not have an RRSP in Canada. My visas this year were as follows:

Jan-Feb = J1
March-December = TN

For my US return I considered myself a resident for the entire year and filed the following:

-Filed 1040A as a US resident
-Filed a schedule B to declare my RBC account
-Did not file FBAR or 3520 (only have a checking account with < 10k)

Q1:Did I miss anything for my US reporting requirements?

I now have to prepare my Canadian returns, I will be filing a departure return for Federal and for Provincial (Quebec), I will indicate March departure date.

Q2. Do I need to report any income on either my federal or provincial returns in Canada? Maybe the income from when I was still J1?

Thank you in advance!

nelsona · Post by **nelsona** » Mon Apr 24, 2017 10:18 pm

As long as you did not have the TFSA on Jan 1 2016, it looks good.
You need to report all income earned before departure date on your cdn return.

matthew12 · Post by **matthew12** » Mon Apr 24, 2017 10:44 pm

I did have a TFSA on Jan 1 2016 however I closed the account in June 2016 after reading on here that I should do so. I made a 1k contribution to the account early in the year (around March) and I withdrew the entire balance (~4k) in June when I closed it.

What implications does this have on my Canada return? Also, anything need correcting in my US return?

nelsona · Post by **nelsona** » Mon Apr 24, 2017 10:52 pm

Its not the Cdn return that is the issue.

It affects your US return, as it means you were to report the following:

1. any income that was incurred oin 2016 before you closed it
2. It made your required to report FBAR, since it likely pushed you over the 10K at some point.
3. And if your TFSA was invested in mutual funds, it was probably a trust, requiring 3520 and perhaps also PFIC reporting.

matthew12 · Post by **matthew12** » Mon Apr 24, 2017 11:09 pm

1. minimal income was incurred, the account was in cash (~4k total)
2. it was never above 10k
3. funds were in cash, don't think it was a trust

Am I OK?

matthew12 · Post by **matthew12** » Mon Apr 24, 2017 11:23 pm

Also, for my Canadian return, I will report all the income I earned before the departure date, I assume I can also credit the taxes I paid in the US on that income during that period?

Am I not able to use Jan 1 as my departure date? I moved to the US in August 2015 but I was on a J1 until March 2016. In the US I was resident all year, does Canada not work that way?

Thanks again

nelsona · Post by **nelsona** » Tue Apr 25, 2017 8:38 am

1. Minimal income is still income.
2. But with your other account, you may exceed $10K. Its not the value of each account that matters, it is the total.
3. Its the type of account you need to determine if it was a trust or not.
Clearly, you hadn't quite got all issues ironed out in apparent hurry to get 1040 filed. Would have been worth asking all this before filing. For future, realize that if you don't owe IRS money, no need to file in April.

For Canada You did not meet any of the definitions of US resident, either by US regs or by treaty until march, so that is your departure date.

The prorated tax on the portion of US-sourced income you report on your Cdn departure return can be claimed as FTC on your Cdn return. same for any Cdn tax on Cdn income you reported on your US return (perhaps another reason to amend your 1040).

matthew12 · Post by **matthew12** » Wed Apr 26, 2017 6:34 pm

All accounts combined were below 10k, I will have to find out if my TFSA was a trust or not.

For the Canadian return, should I be filling a regular T1 or the Non-resident T1? I don't see any space for departure date on the N-R T1 so I am assuming for this year I still need to use the normal T1.

Thanks

nelsona · Post by **nelsona** » Wed Apr 26, 2017 7:24 pm

correct. for your province.

matthew12 · Post by **matthew12** » Wed Apr 26, 2017 8:49 pm

Thank you nelsona, I saw that on the CRA website as well.

I tried doing all this in TurboTax but it does not work, they ask you for your residency on Dec 31 2016 and that determines which forms they use.

If I choose non-resident on Dec 31, I never get an option for departure date and looking at the forms behind they are using the N-R forms, so this is wrong.

If I choose Quebec on Dec 31 (white lie) then I do get the option for departure date and the tax calculations seem to be correct however I am unable to enter my US address.

I decided I should try and just do it manually on the forms but I have the same issue, the Quebec 5005-R T1 form has no line for State or Country in the address field, how can I enter my US address?

On the CRA website I see:

Which tax package should you use?

For the tax year that you leave Canada, use the general income tax and benefit package for the province or territory where you resided on the date you left Canada.

If you were a resident of Quebec before you left Canada and you want information on filing a Quebec tax return, visit Revenu QuÃ©bec.

nelsona · Post by **nelsona** » Thu Apr 27, 2017 10:08 am

The phrase "Your residency on Dec 31", should read "Your residency on Dec 31 OR the last day you were resident in Canada".

The CRA guide also explains this.

As to why you cannot put a different mailing address, that would be something to take up with the software.

matthew12 · Post by **matthew12** » Thu Apr 27, 2017 10:10 am

The problem is not with the software but with the T1 form, there is no place for a US address in the personal information section.

I am considering just cramming my state and country all on the province line...seems odd the form cannot handle this.

nelsona · Post by **nelsona** » Thu Apr 27, 2017 10:58 am

The software prepares your T1 form. It should handle the state in the province box.