My wife moved to the US on a TN visa in late 2015.
I spent some time in the US in 2015 but not enough to be considered a resident.
In 2016 I was in the US on January 1. I received a TD visa a few months later and eventually we both received green cards in late 2016.
During 2016 I had Canadian Employment income (T4), EI (T4E) & investment income received on T3, T5 and capital gains from share sales shown on T5008. I also had US wages reported on a W2.
My questions are:
1. Am I considered a full year US resident since I pass both the green card and SPT and I was physically present in the US on Jan 1, 2016. Correct?
2. I plan to file in Canada as a non resident to recover taxes withheld on the employment income <$10,000 on line 256 as well as the investment income and EI.
3. The T3 income is from a REIT which has three parts: Other Income, Capital Gains and Return of Capital (reduction in cost base), how would this be reported on the 1040?
4. Despite informing the CDN bank of my departure, they did not withhold non-resident tax and only issued me Canadian tax forms. Any thoughts?
Thank you
Residency in US - Start Date & Reporting of Income
Moderator: Mark T Serbinski CA CPA
1. Yes, but even if you did not, you would file jointly as such with your spouse, both by US regs and by treaty. This does not affect your Cdn departure date, whicjh is NOT January 1, but sometime later, when yo uactually moved and stopped working.
2. You can only do this if you filed as n emigrant last year, which you were not allowed to do.. Otherwise, you are a Cdn resident, departing sometime in 2016, and your wages were earned as a Cdn resident. So are not eligible for this $10K exemption. Please read CRA directives for EMIGRANTS, not Nonresidents. You are NOT a non-resident for 2016, you are an emigrant. The EI you received however was as a non-resident and should have had 25% withholding as a non-resident (and does not appear on your departure return). If it was not correctly withheld, you need to fix this by letter to CRA. Your investments were subject to deemed disposition on your return, and no firther tax in Canada after your departure date.
3. All your income will be reported in US under the categories of US income, wages, gains, UI, dividends, etc. You can claim a 1116 credit for the tax you paid on your 2016 Cdn departure return.
4. Banks don't withhold tax on interest for non-residents. Report the portion your earn before leaving Canada, and the portion your earned after.
2. You can only do this if you filed as n emigrant last year, which you were not allowed to do.. Otherwise, you are a Cdn resident, departing sometime in 2016, and your wages were earned as a Cdn resident. So are not eligible for this $10K exemption. Please read CRA directives for EMIGRANTS, not Nonresidents. You are NOT a non-resident for 2016, you are an emigrant. The EI you received however was as a non-resident and should have had 25% withholding as a non-resident (and does not appear on your departure return). If it was not correctly withheld, you need to fix this by letter to CRA. Your investments were subject to deemed disposition on your return, and no firther tax in Canada after your departure date.
3. All your income will be reported in US under the categories of US income, wages, gains, UI, dividends, etc. You can claim a 1116 credit for the tax you paid on your 2016 Cdn departure return.
4. Banks don't withhold tax on interest for non-residents. Report the portion your earn before leaving Canada, and the portion your earned after.
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
1. So just so we are clear on residence and filing status in US. Filing full-year in US (which you are perfectly allowed to do) does not necessarily make you tax resident, and certainly not in CRA's eyes. When you are a tax resident of both countries then, by treaty, where you live and work counts first. When did you actually move to US?
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
Thanks for your response.
I was in the US for all of 2016 (from Jan 1, 2016).
We had a baby in early 2016, which is why I had EI (parental), then started working in late 2016 on a green card. They did not withhold the correct non-resident tax (box 24)
The employment income i received from Canada was severance from my old job and I was not in Canada at the time I received it.
In 2015 I was in the US the later half of the year and filed a closer connection form to maintain non-residency in the US. My only tie to Canada was a residence which was sold in early 2017.
I was in the US for all of 2016 (from Jan 1, 2016).
We had a baby in early 2016, which is why I had EI (parental), then started working in late 2016 on a green card. They did not withhold the correct non-resident tax (box 24)
The employment income i received from Canada was severance from my old job and I was not in Canada at the time I received it.
In 2015 I was in the US the later half of the year and filed a closer connection form to maintain non-residency in the US. My only tie to Canada was a residence which was sold in early 2017.
So, what date in 2015 did you choose as your departure date, and indicate this on your 2015 departure return?
How did you have closer connection to Canada at end of 2015 if you were living in US with your spouse? You had a home in both countries, so could not use the Cdn home as a closer connection.
Had you met SPT in 2015, by counting days in 2013,14,15? Seems unlikely. That would have been theo nly reason to file 8840.
From what you said, there isn't any doubt that you were a US resident for 2016, but see the point that nothing "happened" on 1/1/2016 that hadn't already happened some time in 2015. Choosing 1/1/2106 as your departure date (or more accurately 12/31/15) seems a little contrived.
In any event, the correct thing to do would be to amended your cdn return for 2015 and declare non-residency on 12/31 or even better some other date when you actually moved.
Then file a non-resident return for 2016, reporting only the wages (and excluding them if less than $10K). Calculate 25% of EI, and send them the difference frowhat EI withheld and 25%, in a separate letter.
How did you have closer connection to Canada at end of 2015 if you were living in US with your spouse? You had a home in both countries, so could not use the Cdn home as a closer connection.
Had you met SPT in 2015, by counting days in 2013,14,15? Seems unlikely. That would have been theo nly reason to file 8840.
From what you said, there isn't any doubt that you were a US resident for 2016, but see the point that nothing "happened" on 1/1/2016 that hadn't already happened some time in 2015. Choosing 1/1/2106 as your departure date (or more accurately 12/31/15) seems a little contrived.
In any event, the correct thing to do would be to amended your cdn return for 2015 and declare non-residency on 12/31 or even better some other date when you actually moved.
Then file a non-resident return for 2016, reporting only the wages (and excluding them if less than $10K). Calculate 25% of EI, and send them the difference frowhat EI withheld and 25%, in a separate letter.
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
I filed 2015 as a Canadian resident.
Including severance, I was employed and working in Canada for all of 2015, and had a primary residence (with all possessions) in Canada.
Yes, I had met SPT in 2015 based on 2013 & 2014 which is why I used 8840.
If I did file an amended return, would the HBP become an issue?
...being due 60 days from some point in the past?
As a separate issue, my bank (T D) didn't want to take a contribution to repay the HBP
Including severance, I was employed and working in Canada for all of 2015, and had a primary residence (with all possessions) in Canada.
Yes, I had met SPT in 2015 based on 2013 & 2014 which is why I used 8840.
If I did file an amended return, would the HBP become an issue?
...being due 60 days from some point in the past?
As a separate issue, my bank (T D) didn't want to take a contribution to repay the HBP
You said "In 2015 I was in the US the later half of the year" . Enough to trigger SPT (greater than 100 days). How were you working in Canada during this time?
What date di you get your severance pay? Was it before or after you sold the house?
I don't have a problem if you want to pick a day in 2016 as your departure date, but as I said earlier, what EVENT are you going to hang that date upon? If you were relying on your Cdn home to say you were Cdn resident in 2015, then logically that home made you resident until you sold it, no? So use that date. I suspect that means though that your severance was earned in Canada, and is taxable there. Not much of a worry since your Cdn income will probably be taxed higher in US when filing joint in 2016, but apparently not what you wanted.
it is one of the problems when one tries to prolong their departure date, instead of making it the date you moved to US.
HBP had to be repaid within 60 days of leaving Canada, so that boat has sailed and needs to be included in income on your departure return. So TD was probably right not to take a payment. Did service Canada know you were a US resident? had you old anyone official?
Your investments were deemed sold for Cdn purposes on departure date, so any income they generated isn't reported in Canada, once you pay the departure tax. it is now all considered tatxble in US
What date di you get your severance pay? Was it before or after you sold the house?
I don't have a problem if you want to pick a day in 2016 as your departure date, but as I said earlier, what EVENT are you going to hang that date upon? If you were relying on your Cdn home to say you were Cdn resident in 2015, then logically that home made you resident until you sold it, no? So use that date. I suspect that means though that your severance was earned in Canada, and is taxable there. Not much of a worry since your Cdn income will probably be taxed higher in US when filing joint in 2016, but apparently not what you wanted.
it is one of the problems when one tries to prolong their departure date, instead of making it the date you moved to US.
HBP had to be repaid within 60 days of leaving Canada, so that boat has sailed and needs to be included in income on your departure return. So TD was probably right not to take a payment. Did service Canada know you were a US resident? had you old anyone official?
Your investments were deemed sold for Cdn purposes on departure date, so any income they generated isn't reported in Canada, once you pay the departure tax. it is now all considered tatxble in US
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
The house was sold in 2017, severance extended 7 months (more than the second half of 2015) I was in the US during that time.
I did inform the bank as well as Service Canada that I was in the US. Service Canada did withhold non-resident tax (but not enough of it).
I believe the bank should have issued 1099's instead of T3 and T5s but they did not.
The event for departure in 2016 could be the birth of our child, receiving a green card, full time employment or alternatively my name appeared on a lease and could make that my new primary residence.
I did inform the bank as well as Service Canada that I was in the US. Service Canada did withhold non-resident tax (but not enough of it).
I believe the bank should have issued 1099's instead of T3 and T5s but they did not.
The event for departure in 2016 could be the birth of our child, receiving a green card, full time employment or alternatively my name appeared on a lease and could make that my new primary residence.
Why do you say EI was not withheld correctly? EI is flat-taxed for non-residents, and that is the final payment to CRA. It should not go on a Cdn tax return.
What was the rate they taxed you at? Divide tax by gross. its should either be 15 or 25%. Did they not start NR withholding right away?
Cdn banks don't issue US tax forms. they issue Cdn NR forms. but in moving years they often just issue the regular T form. Doesn't really matter, you have to enter the info on the 1040 where it belongs. You also need to get rid of these accounts if you want to trade investments, since cdn brokerages are not allowed to deal with US residents, except to sell off.
"The event for departure in 2016 could be the birth of our child (NO!), receiving a green card (Could be, but that makes your employment income taxable in Canada), full time employment (no, that was much later) or alternatively my name appeared on a lease and could make that my new primary residence (not even close, you were living with your spouse)."
If there is a date in 2016 that makes sense, it can only be 1/1/16, only because it coincides better with your claim to IRS that you were NOT resident in 2015 -- and are for all of 2016, and let's you of the hook for amending your 2015 return, which CRA has already accepted.
So, your 2016 Cdn return (with 1/1 departure date) should look like this. Report all Cdn wages (and any withholding for those ages ONLY), then exclude by 256. Report cap gains as if you sold all investments on 1/1/16, and list them on departure form. No EI, no interest, nothing else. Double check that EI was withheld correctly, and if not send them a check for the difference (with a separate letter)
What was the rate they taxed you at? Divide tax by gross. its should either be 15 or 25%. Did they not start NR withholding right away?
Cdn banks don't issue US tax forms. they issue Cdn NR forms. but in moving years they often just issue the regular T form. Doesn't really matter, you have to enter the info on the 1040 where it belongs. You also need to get rid of these accounts if you want to trade investments, since cdn brokerages are not allowed to deal with US residents, except to sell off.
"The event for departure in 2016 could be the birth of our child (NO!), receiving a green card (Could be, but that makes your employment income taxable in Canada), full time employment (no, that was much later) or alternatively my name appeared on a lease and could make that my new primary residence (not even close, you were living with your spouse)."
If there is a date in 2016 that makes sense, it can only be 1/1/16, only because it coincides better with your claim to IRS that you were NOT resident in 2015 -- and are for all of 2016, and let's you of the hook for amending your 2015 return, which CRA has already accepted.
So, your 2016 Cdn return (with 1/1 departure date) should look like this. Report all Cdn wages (and any withholding for those ages ONLY), then exclude by 256. Report cap gains as if you sold all investments on 1/1/16, and list them on departure form. No EI, no interest, nothing else. Double check that EI was withheld correctly, and if not send them a check for the difference (with a separate letter)
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
OK. I'll use 1/1/2016.
They told me they made an error on EI, the rate they used was slightly over 12%
They did start withholding NR from the start.
You said:
Calculate 25% of EI, and send them the difference from what EI withheld and 25%, in a separate letter.
The withholding was shown on box 24 of a T4E. If I understand, sending the difference up to 15% or 25% would cover my total obligation, similar to part XIII or what appears on an NR4 and means I wouldn't have to make any mention of it on my non-resident return?
What makes the rate 15% or 25%, obviously I'd prefer the 15%.
They told me they made an error on EI, the rate they used was slightly over 12%
They did start withholding NR from the start.
You said:
Calculate 25% of EI, and send them the difference from what EI withheld and 25%, in a separate letter.
The withholding was shown on box 24 of a T4E. If I understand, sending the difference up to 15% or 25% would cover my total obligation, similar to part XIII or what appears on an NR4 and means I wouldn't have to make any mention of it on my non-resident return?
What makes the rate 15% or 25%, obviously I'd prefer the 15%.
Sorry, the HBP non-payback goes on your departure return too. Thanks for the reminder.
It isn't 217 eligible, because it is considered income earned as a resident (which is why it goes on your departure return.)
Only your EI could qualify, but I'm thinking your tax rate will be too high (since you also got severance and worked at year end), so don't bother. 217 in a move year almost never works because of other income.
It isn't 217 eligible, because it is considered income earned as a resident (which is why it goes on your departure return.)
Only your EI could qualify, but I'm thinking your tax rate will be too high (since you also got severance and worked at year end), so don't bother. 217 in a move year almost never works because of other income.
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
217 is for pension type income, but only that paid out as a non-resident and subject to flat NR tax. HBP payback is neither.
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
I believe it is 25%. the sure way to know is to look at your last few EI payments, once service Canada had figured it out, and see what they withheld. It should be EXACTLY 25%, or EXACTLY 15%.
Don't forget, the HBP amount is not considered income in US, so don't put it on your US return. You can use the tax paid towards it as a deduction however, if you choose the deduction method, but not as a credit.
Don't forget, the HBP amount is not considered income in US, so don't put it on your US return. You can use the tax paid towards it as a deduction however, if you choose the deduction method, but not as a credit.
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