Determining if Resident or Dual Status

sp2016 · Post by **sp2016** » Mon Mar 14, 2016 5:07 pm

Hi all,

I am a Canadian that has been working in California since November on a TN Visa for a US company and have a US social.

Prior to this, in 2015, I worked with a Canadian company, on an L visa, in the US for 150 days. The company did not withhold US income tax, only Canadian, and will only be providing me with a T4. I was also in the US the prior year, 2014, for over 184 days and filed a US tax return via ITIN.

Would I be considered a Resident Alien or Dual Status?

If I was a Resident Alien would I show my Canadian Income and US income for the year on the 1040NR?

nelsona · Post by **nelsona** » Mon Mar 14, 2016 8:39 pm

You are resident only after novermber, so can file 1040NR. However it should include your US wages from before you finally moved.

This would be a case where 1116 would be used with 1040NR,.

Or you could just elect to file 1040 full year.

Dual-status is rarely useful, and isn't in this case.

sp2016 · Post by **sp2016** » Wed Mar 16, 2016 2:57 pm

If I am a resident only after November, does that mean I need to file a 1040 for the portion I earned from November - December?

When you say include my US wages from before I moved; I was never paid in the US or in US dollars when I was on my L1 working for a Canadian company in the US. Would I still need to include this.

If I elected to file a 1040, would I include my Canadian earnings or just the portion from November - December?

nelsona · Post by **nelsona** » Wed Mar 16, 2016 3:24 pm

1040NR, which you can file because you were Cdn resident until November, will include only US-source income from 2015. Although initially you were paid by a Cdn company, it still US-sourced income, so needs to be included on 1040NR. You can't exclude it because you exceeded 183 days in US for the year. had you not entered US in November to work, the income would be excluded by treaty, now it is not.

Since this is the case, you probably should simply choose to file 1040, on which you report WORLD income for entire year and get all the benefits of 1040 vs 1040NR. This may mean filing special forms for your RESP and TFSA if you have one, and other Cdn accounts.

Since the L1 income is us-sourced, you will owe full US tax on it, but will then be able to get credit for this tax on your 2015 Cdn departure tax return.