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Hi David,
Thanks a lot for your detailed answer. I didn't know anything about the Canadian health coverage continuation, so I learned about it following your message. Unfortunately, it appears that there are other requirements in Ontario, and we won't be covered (+ the coverage would only be $400 per day in emergency, which is much less than actual cost). You'll find details hereunder, in case it is of interest:
"Starting March 1, 1999, the Ministry of Health and Long-Term Care may continue your eligibility for Ontario health (OHIP) coverage when you are absent from Ontario for more than 212 days in a 12 month period, as long as you plan to return and make your permanent and principal home in Ontario. To be eligible for continuous OHIP eligibility during a longer absence, you must first have been physically present in Ontario for at least 153 days in any 12-month period, for 2 consecutive years immediately before the absence."
Regarding visas and taxes, I did not get my J1 as a Canadian resident but as a French national, though I still plan to come back to Canada afterwards in order to maintain our residency. Therefore what I plan to do is to report my world income to Canada for the next 2 years and then become a nonresident if I go for a year of professional training in the US. Does it sound Ok to you?
Best,
GCXXXXXX
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David Ingram replies:
The coverage of all provincial health plans is so small if the holder of the plan is in the USA that EVERYONE needs additional coverage, through an alternat Medical Trip Insurance Plan. This isurance can be the John Ingle insurance Group, Your local Automobile Club, Your Gold Visa card or your Gold MC card, or, or, or.
Ontario is better than BC which only covers $75.0o a day for US hospital stays.
Your plan of attack sounds fine.
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-----Original Message-----
From: David Ingram at home - bus at [email protected] [mailto:[email protected]]
Sent: Tuesday, September 09, 2003 Subject: Re: Canadian resident studying in the USA
Hello,
I arrived last December in Toronto from France as a permanent resident. I am now moving to California in order to complete my MBA, and am wondering whether I should remain a tax resident in Canada. Chances are that I'll move back to Canada right after the completion of my program (2 years + maybe one year of 'professional training'), as I cannot stay in the US (I am on a J1 visa with a 2-year homecountry-residence requirement upon completion of studies).
I am going to receive about $47,000 in scholarships (the money comes partly from US and partly from France) while in California but will pay $74,000 in tuition fees, which I think are tax-deductible in Canada (but should I report the
scholarships to Canada and the US?). Also, would I have to declare any "professional training" income to the US? I'll keep an account in Canada but can move it to US or Europe if necessary; no other ties, my wife moves with me and I only worked here for one month as a paid employee.
Finally, with regard to our permanent resident status, I was wondering whether there would be any possibility that our stay in the US could not be counted against the requirement of physical presence in Canada (we have to be here 2 years out of every 5-year period to keep our residence status). I guess I'm asking for a lot here... Thanks for your help; I find your newsletter very instructive.
Best regards,
GXXXXX
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david ingram replies.
You are cutting it close but you should make the 2 year out of 5 rule to keep your permanent resident status. The US stay does NOT count as part of your residency in Canada. Officially the rules are:
Permanent Residency Obligations
Here is what you must do to comply with your residency obligations.
You must accumulate two years of physical presence in Canada in every five-year period. You can also count Canadian residency days if you are outside Canada for an extended period of time for one of the following reasons:
You are accompanying your Canadian-citizen spouse or common-law partner.
You are a child accompanying a Canadian-citizen parent.
You are employed on a full-time basis by a Canadian business, the Public Service of Canada or the public service of a Canadian province.
You are accompanying your permanent resident spouse or common-law partner who is also outside Canada and who is employed on a full-time basis by a Canadian business, the Public Service of Canada or the public service of a Canadian province.
You are a child accompanying a permanent resident parent who is outside Canada and employed on a full-time basis by a Canadian business, the Public Service of Canada or the public service of a Canadian province.
Please note that you are complying with your residency obligations only if:
your accompanying permanent-resident spouse, common-law partner or parent is complying with their residency obligations; and
you ordinarily reside with your accompanying Canadian-citizen or permanent-resident spouse, common-law partner or parent.
A child is someone under the age of 22 who has never been married or in a common-law relationship.
Returning Resident Permit
If you became a permanent resident of Canada before June 28, 2002 you may still be the holder of a Returning Resident Permit issued to you under the previous legislation.
Under the transitional provisions, if you are a permanent resident who is in possession of a Returning Resident Permit, you will be able to count time spent outside Canada towards satisfying your residency obligations. The time period covered by the Returning Resident Permit must apply to the period being examined.
Failure to Comply with Residency Obligations
You may lose your permanent resident status if you fail to comply with your residency obligations.
It is up to you to provide all required information and to provide evidence of your compliance with these obligations.
he full text can be found at: http://www.cic.gc.ca/english/newcomer/res%2Doblig.html
Your US scholarships are reportable to the US but the French one is not. You must also report any income you earn in teh USA.
Under a J-1 issued to you as a resident of Canada, you must return to Canada and are considered a non-resident of the US.
Therefore, you wil report all your income to Canada and claim any relevant expenses. An advantage is that you may maintain your Provincial medical coverage outside of Canada for up to five years is out of the country as a student. YOu should write them and get the coverage acknowledged in writing.
Hope this helps
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
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