Thank you for this wanderfull site. Here is my case which I believe has some new elements not covered explicitly in the previous discussion:
* Me and my wife are US residents and our three kids are US citizens. Two older kids are in college, one in Montreal (as non-resident) and another in New York.
* I am contemplating buying a condo in Montreal where my wife and my younger daughter would like to live together with my son who is finishing his undergraduate study at McGill this year (I pay for him, he is not a Canadian resident).
* I will continue to live and work in US (for US company), and will comute to Canada once or twice a month over the weekends and for week or two over the summers.
* We own a house in New York wich is our primary residence in the moment, and we plan hold to it but to rent it out after we buy in Canada. In the same time I will rent for me a smaller place in New York where I will continue to live while working in the US.
* My wife and daughter would try living there for one or two years at first and if all works ok may stay there indefinite.
* My wife, who is US green card holder (and would hope not to have to give up this in any case) will not have to work in Canada and will be living on my US income. My daughter will go to elementary school there. They will keep their US medical insurance through my company (I am not sure if this will cover them in Canada as out-of-network case), but we would be interested for them to have access to Canadian health care system as well.
Now, the question(s):
(1) Would my US income, which I will continue paying taxes on in US, be also taxed by Canada? Part of it? Is this a clear cut situation so I can be sure of the answer on this issue (before I invest into buying a condo in Canada)?
(2) What are the options as far as the immigration status that my wife and my daughter will have? Are there any options for their legal long term stay (one or two years initially, more if they like it) other then being residents (considering that my daughter will attend Canadian schools and prhaps have health insurace)?
(3) If there is no option but that they will have to be classified as residents of Canada, how would this affect taxes on my US income - would be taxed by Canada for the difference in income taxes between the two countries?
(4) If they will have to be classified as Canada residents could me and my wife still fill in joint tax return in the US? And how about deductions for dependents on US tax return?
(5) Would anything change in my tax & immigration options depending on wheter I buy the property in Canada on my name or I sign my wife as co-owner?
I would greately appreciate your response to (any of) these questions, as I am about to make an offer on the property that we like but woud not do it untill I am sure of the effects this will have on my US income taxes.
Thank you!
US resident works in US, wife&child move to CAD - 2 taxe
Moderator: Mark T Serbinski CA CPA
General: For your wife and kids to live in canada they need to formally immigrate. They can probably get by for a few months doing like you state, but to live in canada they need permission, just like your son needs permission to go to school in Canada. It is unclear what citizenship you and your spouse have.
This would be the only way that they would ever get Cdn Health coverage as well.
1. Unless you spend more than 183 days in canada, since you have a house in US a job in US, and your family doesn't 'really' live in Canada, you would be fine. Once of these criteria fails, you would become taxable.so, when you would spend more time there OR rent out your NY house, OR begin immigration procediings, you would become taxable.
2. Not really. They can't visit for more than 6 months at at ime, and can't visit period if they don't live elsewhare at the same time (ie. have a bed available to thenm in US every single night they are in Canada). They (and you) need to immigrate, if they aren't Cdn.
3. Yes, you Cdn tax would basically be the 'difference between the US/stae rate and the Cdn/Prov rate.
4. Nothing in your Cdn tax status would change how you and your wife or children file in US. In fact she would still have to file as a condition of keeping her GC.
5. For immigration, no. for tax purposes, not really, as whether or not you and/or your wife own property, it is prolonged physical presence of either of you that will make you BOTH taxable in canada
This would be the only way that they would ever get Cdn Health coverage as well.
1. Unless you spend more than 183 days in canada, since you have a house in US a job in US, and your family doesn't 'really' live in Canada, you would be fine. Once of these criteria fails, you would become taxable.so, when you would spend more time there OR rent out your NY house, OR begin immigration procediings, you would become taxable.
2. Not really. They can't visit for more than 6 months at at ime, and can't visit period if they don't live elsewhare at the same time (ie. have a bed available to thenm in US every single night they are in Canada). They (and you) need to immigrate, if they aren't Cdn.
3. Yes, you Cdn tax would basically be the 'difference between the US/stae rate and the Cdn/Prov rate.
4. Nothing in your Cdn tax status would change how you and your wife or children file in US. In fact she would still have to file as a condition of keeping her GC.
5. For immigration, no. for tax purposes, not really, as whether or not you and/or your wife own property, it is prolonged physical presence of either of you that will make you BOTH taxable in canada
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
nelson, thank you for your answers. I need some clearifications to make sure I understood you correctly:
I understood that my family will be required to acquire Canadian residency if they live in Montreal for more then 183, which will be the case.
Ok. Add to this that: I will be working demonstrably full time in US and I will be living in US as my work requires my full time presence in US; and, I will be sending them money for living expenses, including paying condo fees and condo taxes. They will not have need for Candian bank account as US bank ATM cards and credit cards work just as well in Canada.
Given all this, I would like to understand how point 1 of your answer applies:
>>
"1. Unless you spend more than 183 days in canada, since you have a house in US a job in US, and your family doesn't 'really' live in Canada, you would be fine. Once of these criteria fails, you would become taxable.so, when you would spend more time there OR rent out your NY house, OR begin immigration procediings, you would become taxable."
<<
Given my situation described above (me permanent in US) are you saying that:
(1) despite them getting Canada residency and living in our condo there, there is a case in which my US income will NOT be taxed by Canada?
=> If this is not so, i.e if them living there as residents (as they have to be according to what I understod you are saying, no?) automatically makes my US income taxable by Canada, that's a bad news, but at least I got my answers and perhaps the only thing remains for me to do is to try filling in Canada tax return and have somebody estimate realistically what the tax diff will be (if any).
=> If this is so (there is still a case in which my US income will *not* be taxed bu Cnd) then I have three subquestions:
(1.1) is it true that as long as we do *not* sell or rent out the house we own in New York, my US income or part of it will *not* be taxed in Canada?
(1.2) Suppose we rent out the house in US simply because my US income can't maintain two large households, but I rent or by smaller place in US for me to live in. Wouldn't this just confirm that I live in US and that we as a family do maintain strong residency ties to the US (did not sell the house).
(1,3) Is there a case in-between in which the fact that my son (who is finishing his studies and will move back to US this year) and my older daughter (who goes to college in US) and me who can clearly demonstrate to live and work *full* time in New York, being 3 members of the family in US (vs 2 in Montreal), would be interpreted as no Canada taxes on my US income?
Thank you very much. I greatly appreciate your effort and advise.
I understood that my family will be required to acquire Canadian residency if they live in Montreal for more then 183, which will be the case.
Ok. Add to this that: I will be working demonstrably full time in US and I will be living in US as my work requires my full time presence in US; and, I will be sending them money for living expenses, including paying condo fees and condo taxes. They will not have need for Candian bank account as US bank ATM cards and credit cards work just as well in Canada.
Given all this, I would like to understand how point 1 of your answer applies:
>>
"1. Unless you spend more than 183 days in canada, since you have a house in US a job in US, and your family doesn't 'really' live in Canada, you would be fine. Once of these criteria fails, you would become taxable.so, when you would spend more time there OR rent out your NY house, OR begin immigration procediings, you would become taxable."
<<
Given my situation described above (me permanent in US) are you saying that:
(1) despite them getting Canada residency and living in our condo there, there is a case in which my US income will NOT be taxed by Canada?
=> If this is not so, i.e if them living there as residents (as they have to be according to what I understod you are saying, no?) automatically makes my US income taxable by Canada, that's a bad news, but at least I got my answers and perhaps the only thing remains for me to do is to try filling in Canada tax return and have somebody estimate realistically what the tax diff will be (if any).
=> If this is so (there is still a case in which my US income will *not* be taxed bu Cnd) then I have three subquestions:
(1.1) is it true that as long as we do *not* sell or rent out the house we own in New York, my US income or part of it will *not* be taxed in Canada?
(1.2) Suppose we rent out the house in US simply because my US income can't maintain two large households, but I rent or by smaller place in US for me to live in. Wouldn't this just confirm that I live in US and that we as a family do maintain strong residency ties to the US (did not sell the house).
(1,3) Is there a case in-between in which the fact that my son (who is finishing his studies and will move back to US this year) and my older daughter (who goes to college in US) and me who can clearly demonstrate to live and work *full* time in New York, being 3 members of the family in US (vs 2 in Montreal), would be interpreted as no Canada taxes on my US income?
Thank you very much. I greatly appreciate your effort and advise.
Rather than focus on all your scanareios which will presume to make you non-resident, loofk at what will make YOU a Cdn tax resident.
1. You or your spouse living in Canada.
2. You or your spouse having a permanent place to live in Canada.
3. You spending more than 183 days in Canada in one calendar year.
Once any one of these three things is true, the burden to prove you are not resident shifts to you, and given what you describe, you would be hard-pressed to come up whith such proof.
It does not really matter how many homes outside Canada you have, if your spouse spends most of her time in canada, in a home that belongs to you, which you frequently visit.
If your wife's 'trip' to canadfais really temporary, then you should condsider simply renting a place for a year. But the way you describe things, it would appear that you are looking to make Canada your home. If so, this means immigrating, and it means paying Cdn tax.
On the Cdn taxation issue, since I presume you would be living in QC, expect to pay at least another 10% in taxes to the Provincial Govt.
1. You or your spouse living in Canada.
2. You or your spouse having a permanent place to live in Canada.
3. You spending more than 183 days in Canada in one calendar year.
Once any one of these three things is true, the burden to prove you are not resident shifts to you, and given what you describe, you would be hard-pressed to come up whith such proof.
It does not really matter how many homes outside Canada you have, if your spouse spends most of her time in canada, in a home that belongs to you, which you frequently visit.
They will have to immigrate if they spend ONE DAY living in Canada. Buying a condo and living in it, does not make one a tourist. Even your weekly visits to your family in Canada will raise scrutiny. Cdn Immigration will wonder why a non-resident of canada is coming to visit his family in Canada. They will deduce that since one member of the family is not immigrating, none must be, so why are they living in Canada?I understood that my family will be required to acquire Canadian residency if they live in Montreal for more then 183, which will be the case.
If your wife's 'trip' to canadfais really temporary, then you should condsider simply renting a place for a year. But the way you describe things, it would appear that you are looking to make Canada your home. If so, this means immigrating, and it means paying Cdn tax.
On the Cdn taxation issue, since I presume you would be living in QC, expect to pay at least another 10% in taxes to the Provincial Govt.
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
nelson, thank you for your answers. It seems I should take a serious look into how much tax difference I will actually pay in the case I get taxed on my full income in US and in Canada. An ethusiastic Canadian real-estate broker hinted that I may pay in fact less taxes in Canada then I pay living in New York, USA...Hard to believe but perhaps worht checking.
I am not clear, however, one last thing: You say that (in my case) once "any of these three things is true, the burden to prove" I am not a resident shifts to me. The remaining confusion I have is with your phrase "burden of proof" as it seems it indicate that there is a fighting chance even if my wife immigrate and is resident of Canada. I don't think this is what you are saying. So, would I be right to understand what you are saying simply as follows: If my spouse imigrates to Canada and is resident of Canada (as she has to in order to live in our condo there), I become tax resident of Canada by definition, and therefore as long as I am not chanllenging her residency in Canada, there is nothing to prove or nothing I can do even if I can demonstrate to live in US exactly, say, 240 days a year. Is this right?
Thank you once more for your effort.
I am not clear, however, one last thing: You say that (in my case) once "any of these three things is true, the burden to prove" I am not a resident shifts to me. The remaining confusion I have is with your phrase "burden of proof" as it seems it indicate that there is a fighting chance even if my wife immigrate and is resident of Canada. I don't think this is what you are saying. So, would I be right to understand what you are saying simply as follows: If my spouse imigrates to Canada and is resident of Canada (as she has to in order to live in our condo there), I become tax resident of Canada by definition, and therefore as long as I am not chanllenging her residency in Canada, there is nothing to prove or nothing I can do even if I can demonstrate to live in US exactly, say, 240 days a year. Is this right?
Thank you once more for your effort.
I would respectfully (maybe not so respectfully) say that your agen is not telling you the truth, and I would question his/her ethics at this point.
Quebec is universally known as the absolutely highest taxed jurisdiction in North America (on top of the high property, sales, and welcome tax you will be paying) you won't know what hit you.
Real estate agents make money selling houses, even when such a thing may not make sense to the buyer.
Quebec is universally known as the absolutely highest taxed jurisdiction in North America (on top of the high property, sales, and welcome tax you will be paying) you won't know what hit you.
Real estate agents make money selling houses, even when such a thing may not make sense to the buyer.
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