Canadian Citizen, US PR to work in Canada temporarily

crikeycrapper · Post by **crikeycrapper** » Thu Mar 22, 2007 3:19 pm

I'm Canadian and a US permanent resident. My US employer is requesting me to head up a project in Ontario, Canada that would require that I temporarily work in Ontario, Canada. Since my spouse is a stay at home parent, I can bring my whole family with me. However, the kids would have to go to school in Canada while staying there. One of the requirements of the school is obtain health insurance, i.e. OHIP. OHIP is only given to residents of Ontario. This would mean that we would have to become residents of Ontario. I do not plan on staying in Canada permanently. What would be the tax implications of this?

crikeycrapper · Post by **crikeycrapper** » Thu Mar 22, 2007 3:31 pm

BTW, the company plans to keep me in US payroll during my stay in Canada.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 3:32 pm

By bringing your family with you, and working in Canada, you will be becoming a Cdn resident for tax purposes, unless it is for less than six months.

If you are going to be in Canada for less than six months, it would seem futile to try to get OHIP, since (a) you have perfectly valid private insuarnce thru your US employer, and (B) OHIP takes 3 months to kick-in.

Tell the school that your kids will have continual coverage under your own plan.

If you are going to be in canada more than 6 months, then go ahead and get OHIP, there is no harm, since you will be resident anyways.

By the way, to keep your GC you would want to keep all your current US ties. If the secondment is going to last more than a year, make sure you resolve any Re-entry permit requirements before leaving US.

crikeycrapper · Post by **crikeycrapper** » Thu Mar 22, 2007 3:35 pm

[quote="nelsona"]By bringing your family with you, and working in Canada, you will be becoming a Cdn resident for tax purposes, unless it is for less than six months.

If you are going to be in Canada for less than six months, it would seem futile to try to get OHIP, since (a) you have perfectly valid private insuarnce thru your US employer, and (B) OHIP takes 3 months to kick-in.

Tell the school that your kids will have continual coverage under your own plan.

If you are going to be in canada more than 6 months, then go ahead and get OHIP, there is no harm, since you will be resident anyways.

By the way, to keep your GC you would want to keep all your current US ties. If the secondment is going to last more than a year, make sure you resolve any Re-entry permit requirements before leaving US.[/quote]

That would mean I have to pay Canadian taxes, right? I guess that's what I was trying to avoid.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 3:40 pm

Again, if you stay in Canada more than 6 months, you will be taxable in Canada, on your world income, not just your Cdn salary.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 3:43 pm

Note, that this would be six months in a calendar year, so a well-timed move, say, in late june and a return to US in early July of the following year, with time spent in US could get you off the hook.

As I said, the school is only intersted in you having insurance, it does not have to be OHIP. if you wish to avoid the semblance of residency by not taking OHIP, that is fine.

crikeycrapper · Post by **crikeycrapper** » Thu Mar 22, 2007 3:54 pm

Let's say that I went ahead and did this temporary relocation anyway and got the OHIP to make it simpler to place the kids in school. How do I go about severing ties to Canada as a resident for tax purposes? I realize OHIP will be the first to take care of. How about bank accounts? I actually have a really old bank account that I had to maintain for life insurance purposes but other than that, there is no other significant activity. I also have an old credit card which I use when I visit my folks in Canada. Anything else that I should take care of?

crikeycrapper · Post by **crikeycrapper** » Thu Mar 22, 2007 3:57 pm

If I take OHIP, is it game over in terms of being considered a resident?

Also, I would probably travel back and forth quite frequently (like, I would be in the US at least one or two weeks every 2 months), but would be in Canada a majority of the time.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 4:29 pm

OHIP is a secondary tie, but DAYS are what will be most important. Once you hit 183 days, you will be resident for the year. If that is the case, then it is sometimes better to declare yourself a RETURNED resident. with an arrival date, rather than subject yourself to entire year of taxation.

If you stay below 183, and keep only the ties you need in canada to live temporarily, then you will be non-resident.
I would not buy a house, for example.

The other things you mentionned are not important. Obviously you have been non-resident for some time

Bill_S · Post by **Bill_S** » Thu Mar 22, 2007 4:29 pm

If you take this assignment, I recommend that you keep accurate records of all your border crossings. If you pursue U.S. citizenship at some point, you will have to provide details of all your travels outside the USA while you are a permanent resident. At least, for the five years prior to your citizenship application.

nelsona · Post by **nelsona** » Thu Mar 22, 2007 4:49 pm

I would add on that that if you are entitled to US citizenship now, get it done before leaving.

crikeycrapper · Post by **crikeycrapper** » Fri Mar 23, 2007 10:19 am

[quote="nelsona"]I would add on that that if you are entitled to US citizenship now, get it done before leaving.[/quote]

It just so happens that I recently submitted our citizenship applications.

Thanks for all your help, guys.

crikeycrapper · Post by **crikeycrapper** » Fri Mar 23, 2007 10:20 am

[quote="Bill_S"]If you take this assignment, I recommend that you keep accurate records of all your border crossings. If you pursue U.S. citizenship at some point, you will have to provide details of all your travels outside the USA while you are a permanent resident. At least, for the five years prior to your citizenship application.[/quote]

Yeah, it was a bit of a challenge remembering all those dates when I was filling out the application. Thanks.

crikeycrapper · Post by **crikeycrapper** » Fri Mar 23, 2007 10:22 am

[quote="nelsona"]I would not buy a house, for example.[/quote]

My wife wants to buy property, mainly for investment purposes. The housing market in Canada seems immune to the housing market situation in the US. We would be renting it out if we do purchase property. Is this still a bad thing, in terms of being considered a resident?

nelsona · Post by **nelsona** » Fri Mar 23, 2007 11:19 am

So, she would buy properety but not live in it, while you would also rent an appartment?!

You are becoming Cdn resident.