US Student with PR card - Filing in -

xxxxx xxxxxx wrote:

Hello David,
 
I am trying to help a friend to determine if she needs to file Canadian taxes in addition to the taxes she paid in the US for tax year 2007.  The relevant stats:
1. She is a permanent resident of Canada, although she holds a xxxxxxxx passport (I believe she is considered a landed immigrant in the US)
2. She has been living in the US since 2002 as a student on a F-1 visa (initially for undergrad and now in law school)
3. She maintains no residence or dwelling place in Canada, has no personal property there, no spouse or dependents there, no political or professional affilations, has not returned to Canada in about 3 years but does have an old savings account in canada from 2002 with around $2K in it and has an old Canadian drivers license.
4. For 2007, she is filing as a resident in the US as she as more than 5 years as a student here and so can no longer file as a nonresident alien...her AGI was around 36K (which was from an internship at a law firm this summer) and she paid about 5K in US Federal and another 2.5K in NY state taxes this year.
 
Your thoughts would be greatly appreciated as I have read the various Canadian residency guidelines and it seems far more art than science in determining whether you are considered a resident of Canada for tax purposes and hence required to file there as well as the US.
 
Thank you in advance,
 
xxxxx
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david ingram replies:

Seems to me that a law student should be figuring this out themselves.

As described, it is unlikely that she is a landed immigrant int he USA.

However, as described, she has likely lost her Permanent residence status in Canada unless she is married to a Canadian and living in the US with that Canadian spouse.  To maintain her right to renew her PR card, she has to:

1.     have lived in Canada for 2 out of the last five years to maintain her right to a card

2.   have lived in the US (or any other country)  with a Canadian spouse

3.   being working in the US for a Canadian company as the result of a transfer from Canada to the US (or any other country).

Nothing you have described makes her a taxable resident of Canada.

I am also willing to have someone point me to a section that allows her to keep her card as a student.

Note that your friend does not cease to be a Permanent Resident because her card has expired.  She is just a Permanent resident with an expired card.  When she comes to the border to Canada, she does NOT have to answer any questions about how long she has been gone if she is not bringing 'any' goods back with her.  They might make it uncomfortable for her but if she has her driver's licence and has actually filed tax returns and has them with her, the border people must let her in as i understand the situation.

She should 'likely' file Canadian returns if she wants to maintain her status but she is not legally obligated to as explained in your question.  Others may have different  opinions and I will pass along any that seem relevant.

She can also just abandon Canada and apply again if she so desires.  If that is her desire, she should send her card back and start another application now.  That would give her 3 or 4 more years before she would have to take up her status. 
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On April 6. 2008, David Ingram wrote:

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This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.
$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up.
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 
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