Clarifications needed for non-resident alien for 2016

[minster]

Thanks to the everyone, especially nelsona, for taking the time to answer questions. I'll try and keep it short.

Situation:
- Moved to California in October 2016 with my spouse on a TN Visa (TD for spouse)
- I work full time in U.S., my spouse is not allowed working yet.
- Closed all TFSA & Margin accounts and have no ties to Canada.
- Both have RRSPs in Canada
- Both have bank accounts in Canada
- I applied for SSN, waiting for it by mail.

My understanding is I became a Canadian non-resident the day I moved to U.S., but I am also a non-resident in the U.S. for tax purposes since I fail the SPT/Green Card test. Is this correct? Am i in limbo?

Questions:
- Do i call Canadian banks and give them my U.S. address right away so they can withhold U.S. taxes? Or do I wait until Jan 1st?

- I opened 2 U.S. bank accounts + Credit Cards, both asked me to fill out a W-8BEN since I don't have an SSN yet (waiting for it in the mail). I am not sure what to put on it for Part II - Claim of Tax Treaty Benefits (for chapter 3 purposes only) asking me if I am a resident of another country within the meaning of the income tax treaty?? Do I still need to fill this out even after I get my SSN?

- Follow up (and maybe repetition) to the previous question, to whom should I be paying taxes on interest & dividends from Oct-Dec 2016? U.S.? Canada? No one?

- Fill out 1040 or 1040NR for 2016? From previous threads I read to fill out both in a software and see which is more beneficial for me. Is that valid or is there a clear answer for my situation.

- Any impact if I want to open a brokerage account in the U.S. in 2016?

Thanks for the taking the time to help us out.

[nelsona]

You aren't in lombo, you are a US tax resident. It is simply that you have not been a US tax resident long enough to require you to filr a 104). You have the choice to file a 1040NR, or can if you prefer choose to file a 1040 full year joint with your spouse, reporting world income.

I would suggest thata 1040NR would be the best/simplest for this year.

Cdn banks don't withhold US taxes, but you should inform them of youraddress in any event. Samr for your RRSP.

You will not have any taxes on your CDn bank interest in either US ort Canada.

[minster]

Thanks for the answer. I will go for the 1040 NR option.

I did do more reading, and I saw the Canadian banks will issue me an NR4 for my interest earned. Do i claim that as U.S. source income for the first year? Or ignore?

Also more importantly, would you have any idea about the W-8BEN i asked above?

Thanks!

[nelsona]

Cdn bank interst It will never be reported as US source income. It will be txable in US when you file a 1040, for 2017.

You should be filing a w-9. Forget W-8 since you are no longer foreign resident.

[minster]

On the IRS website it says I would be considered a non-resident alien for the rest of 2016.
"If you are an alien (not a U.S. citizen), you are considered a nonresident alien unless you meet one of two tests. You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1-December 31)."

On the W-8BEN form, it says NOT to use this form if I am a US person, including a resident alien individual. So shouldn't that form be good for me for 2016, and then a W9 for 2017?

[nelsona]

The bank only wants one form, they don't care which. Once you get your SSN, which should be at day now, file a w-9.