Good Morning,
I'm a dual US-Canadian citizen. In September, I will be leaving Canada to take a full-time position in New Jersey. My common-law partner will be remaining behind in Canada. Therefore, I will have a residence available to me in both countries. I'm assuming this makes me a dual resident for tax purposes in the eyes of the CRA and IRS.
My question is this: what can I do proactively to make my "Centre of Vital Interests" the United States? My plan is the following:
Cancel OHIP
Cancel Ontario drivers license and get NJ license (same with car registration)
Close all bank accounts in Canada (other than a joint chequing account with common-law parter).
Register to vote in US
Keep US health insurance
Use only US passport (and not apply for Canadian passport)
Cancel all memberships in Canadian organizations
Contact the CRA to change my mailing address
Will doing these things (in addition to living and working in the US) be enough to make the US my "centre of vital interests"? Will these factors cancel out the effect of having a common-law partner in Canada? Please note that I will be making regular trips back to Canada (e.g., once per month).
Thank you in advance for your advice/opinion!
M
Proactively managing the tie-breaker rules of tax treaty
Moderator: Mark T Serbinski CA CPA
Good question, but None of the things you mention are crucial, as none are residential ties.
The two things you need to do are:
make sure you rent/own your own place in US, work in US, and make sure your spouse visits YOU, and not the other way 'round. These by themselves by itself will make you deemed non-resident. Stay out of canada for the first year.
All the other things will happen naturally, since OHIP, ON DL all die when you move out of Ontario. But doing all these things -- even proactively (the apssport thing is meaningless- keep a Cdn passport), will not help unless you STAY in US, you will be considered factual resisnt of canada by virue of your visits "home'.
The two things you need to do are:
make sure you rent/own your own place in US, work in US, and make sure your spouse visits YOU, and not the other way 'round. These by themselves by itself will make you deemed non-resident. Stay out of canada for the first year.
All the other things will happen naturally, since OHIP, ON DL all die when you move out of Ontario. But doing all these things -- even proactively (the apssport thing is meaningless- keep a Cdn passport), will not help unless you STAY in US, you will be considered factual resisnt of canada by virue of your visits "home'.
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 the reply! I hope I'm not pushing it by asking one more question.
In the scenario that I described, what will the CBSA consider me (for customs purposes, not income tax purposes)? My dilemma is this: NJ will require me to register my car and acquire a licence there. However, the CBSA will not permit a Canadian "resident" to enter Canada will a US plated car. Can I declare myself a non-resident to the CBSA by virtue of where I work and live most of the time. Is residency for customs purposes the same as residency for tax purposes?
Thanks again,
M
In the scenario that I described, what will the CBSA consider me (for customs purposes, not income tax purposes)? My dilemma is this: NJ will require me to register my car and acquire a licence there. However, the CBSA will not permit a Canadian "resident" to enter Canada will a US plated car. Can I declare myself a non-resident to the CBSA by virtue of where I work and live most of the time. Is residency for customs purposes the same as residency for tax purposes?
Thanks again,
M
Your residecy for car purposes will be evidenced by your DL.
You will also have evidence that you imported the car formally into US, further evidence of the fact that you live there.
You no longer live in canada, and, like I advised above, you shouldn't be going to canada for the first while anyways. But if you do, act like a US resident.
Another thing to make sure is that you act like US residnet financially, which means closing your broker account, advising your RRSP that you are US resident, and having your portion of any renatl collected have the correct tax withheld.
You will also have evidence that you imported the car formally into US, further evidence of the fact that you live there.
You no longer live in canada, and, like I advised above, you shouldn't be going to canada for the first while anyways. But if you do, act like a US resident.
Another thing to make sure is that you act like US residnet financially, which means closing your broker account, advising your RRSP that you are US resident, and having your portion of any renatl collected have the correct tax withheld.
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
Sorry, I should have stated in my prior post that I have no choice but to return to Canada regularly (my schedule is far more flexible than my partner's). Therefore, my centre of vital interest is going to be Canada (based on your prior reply).
Fortunately, the foreign tax credits will cancel out everything other that the OHIP premium. So I'm not too worried about it. I.m assuming this doesn't change your second reply (re: the car). I will have a Nj licence, registration, etc.
Fortunately, the foreign tax credits will cancel out everything other that the OHIP premium. So I'm not too worried about it. I.m assuming this doesn't change your second reply (re: the car). I will have a Nj licence, registration, etc.