EI benefits from Canada while US resident

configuration · Post by **configuration** » Mon Jan 21, 2013 7:38 pm

Hello,
This is my first time posting on this forum. Here is my situation. In November 2012 I became a US permanent resident and moved to the US to join my wife who lives and works here. I am a Canadian citizen and until last November I was living in Canada.

Even though I now live in the US, I have kept my job in Canada, because I can work remotely, and only have to return to Canada for a couple of days a month. I no longer have a residence, car or any ties to Canada, other than employment.

I understand that I now file US taxes as a resident, and need to file a Canadian tax return as a non-resident. However, to complicate matters, I am also currently receiving Employment Insurance from Canada, because my wife and I had a baby a few months ago (in the US), which led me to take parental leave from my job for 10 weeks. Is there any issue receiving EI benefits while a non-reisdent for tax purposes? I checked the EI rules, as well as with my employer, and there is no problem receiving EI benefits while outside the country (this only applies to parental benefits). But what does this imply for taxes?
Thanks.

nelsona · Post by **nelsona** » Mon Jan 21, 2013 11:26 pm

You need to inform Services canada that you are US resident, and they will withold flat tax on the income, and you will not include it on your Cdn departure return. You may have to send a check this april and next to cover the flat tax (25%) since you did not take care of this when you left.

You will include the EI on your US return, and claim the Cdn tax paid as a credit using form 1116.

configuration · Post by **configuration** » Tue Jan 22, 2013 12:22 am

Thanks, that helps a lot.

Just to clarify, I am receiving EI solely this year (i.e. in 2013). I did not receive any EI benefits in 2012, even though that is the year I departed Canada. So it seems that I will have tax payable to Canada for the 2013 tax year, but this will not show up on my departure return.

nelsona · Post by **nelsona** » Tue Jan 22, 2013 9:12 am

Re-read what I said: you need to advise service canada that you are non-resident. They will then withhold correctly, and then you will have nothing to do, except correct the withholding for the first copule of payments (which you can do anytime). You may even get a refund if you are withheld more than 25%.

nelsona · Post by **nelsona** » Tue Jan 22, 2013 9:12 am

Your departure return will be for 2012.

configuration · Post by **configuration** » Tue Jan 22, 2013 11:53 am

Thanks again.