Canadian working in US while Spouse/Kids live in Canada

[canuckmom]

My husband has a job lined up in California.

If I move back to Canada with the kids and he commutes up on weekends, is the idea that he would have to file US taxes and Canadian taxes and I would file only Canadian taxes?

Would he be considered non-resident or Canadian resident?

[nelsona]

He would probably be considered Cdn resident, because of his visits. To avoidf this, You should visit him.

[canuckmom]

So if we were to visit him, he could be considered non resident and only file US taxes while I file Canadian taxes?

[nelsona]

Possibly. At theworst, he may have to file Cdn, but deduct any US income.

As to how you would file, remember tat most couples file jointly, even if living in separate countries, to lower the US spouse's tax rate.

So you very likey would both file in both countries regardless.

[canuckmom]

Thanks

If I did move back to Canada with the kids; and we flew down to visit him, the costs of 4 flights vs 1 could be less than taxes he might have to start paying in Canada.

How does one determine whether he would have to start filing Canadian again? We disposed of all our assets, except a bank account, RRSPs, RESPs before we left.

[nelsona]

Thre is a big diff between 'commuting on weekends' and 'flying 4 times a year'.

Your spouse visiting you 4 tmes a year would not qualify a commuting, so this is not an issue.

All the secondary ties and what you did with them years ago is meaningless. these are far outweiighed by the fact that his wife and kids are living in CAnada. this will get the interest of CRA. He will need to prove that despite this, his 'centre of vital intersts' (a treaty term) is still in US, and that his intentions are not to return to Canada -- both of which would be a stretch in my opinion.

[canuck2007]

Not that I want to piggy back on the original question but if her husband is indeed paying canadian taxes, can he keep the OHIP priviliges?.....I am in exactly the same situation with ties to canada eventhough I moved to US. My company healthcare plan in US costs $600 per month and it still charges money to go for routine visits to the doctor. I might as well pay that to Canada in taxes and keep my OHIP privileges and cover healthcare in US through emergency travel coverages like blue cross, etc.....My only difference is that I am close to the border unlike her husband(in california) and can visit canada routinely

Would appreciate your thoughts.

[nelsona]

If you are truly going down to US temporarily (and certainly having youyr family back in ON would seem to indicate this) then you can apply BEFORE leaving, to have your OHIP coverage extended even if you do not meet the 150 day presence requirement.

Otherwise, you need to spend the rolling 150 days per year resident in canada (you don't) and maintain a residence(you do).

So, the thing to do is contact OHIP, and establish that permission to be abrouad for extended periods.

I would point out however, that OHIP covergae for any US medical coverage is insufficient, so I would be reluctant to sign off of my employers coverage without at least getting some other blue-cross type which covers what OHIP will not pay.

[canuck2007]

Thanks for your reply nelsona. I had already bought ontario blue cross - the travel coverage for unlimited 15 days trips to US before I left Canada. I go back to canada every weekend. Is that what you meant by blue cross coverage or do you think I need to buy additional coverage on top of that?....The travel coverage is basically an emergency coverage. Do you know of any other coverages that don't cost $600 per month?

thanks

[nelsona]

The coverage you bought is exactly what I meant. it is important to note that nay of these cdn blue cross programs bought in Canada for use in the US have the requirement that you maintain and qualify foir provincial healthcare FIRST.

Many who MOVE down to US to work, think that 'snowbird' insurance purchased in Canada covers them long-term. It does not for more than a month or so, if the they have given up Cdn residency.

But if you are mainatining Cdn residency, and are meeting the 150 days (or have gotten permission from OHIP to waive this requirement) the blue cross you bought is good.

[canuck2007]

Thanks again for your reply.

a) Does the 150 day OHIP requirement go by any 12 month term say Sep 1, 2007 to Sep 1, 2008 or is it by calendar year (Jan 1- Dec 31)......

b)Is residency from CCRA's perspectie same as the residency from OHIP's perspective?....what I mean is, if I choose to pay canadian taxes (and hence claim resident status), wouldn't I automatically qualify for OHIP?
If I pay the $750 - OHIP tax every year, I would think I should be able to use my OHIP privileges, otherwise why bother paying that amount in taxes.

[Mark T Serbinski CA CPA]

[quote="nelsona"]He would probably be considered Cdn resident, because of his visits. To avoidf this, You should visit him.[/quote]

Residential status is determined by connections to Canada, including where the permanent home of a spouse or other dependents is. If the husband works and lives in the U.S., and the wife and kids remain in Canada, then the husband is still considered a resident of Canada because of the household he maintains there.

No "visits" to the U.S. by the wife will remedy this. In order for the husband to cease to be considered a resident of Canada, the wife and kids will need to sever residential ties with Canada and actually move to the U.S.

[nelsona]

Most couples in this situation can indeed see the US resident spouse be considered a "deemed non-resident:, thus avoiding Cdn tax on their US income while still having to file a Cdn return.

Mark's take on this is higfhly conservative.