Article IV of US / Canada Income Tax Convention (1980)

This is a multi-part message in MIME format.
---------------------- multipart/alternative attachment
QUESTION:
I am a Canadian Citizen working as a foreign scholar at a US academic =
institution. I came to the US in Dec '02 on a TN VISA, although I lived =
with a friend and did not move here until January '03.  I switched to a =
J1 VISA in Feb '03. After I switched to a J1, I was exempt from FICA and =
Medicare payments.
I have filed as a US resident for my 2003 US taxes. My question is; do I =
have to file in Canada for 2003, and if so, do I just file normally with =
the added foreign income?
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D
david ingram replies:
With a J-1 visa and as a student, most if not all provinces will allow =
you to remain a member of their medical plan.  If you are taking =
advantage of this, you should file as a Canadian resident and report the =
US income on your Canadian return.
On the other hand, if you have a US driver's licence and US medical, you =
should not file in Canada and just file in the US as a resident.
This of course assumes that you have no income in Canada and all your =
income comes from the USA.
And, if you have exempted yourself from US medicare and FICA, You should =
be paying CPP to Canada which you can elect to do on a CPT-20 form.
In this case you would exempt your US income from Canadian tax by =
claiming an exemption under Article IV of the US /. Canada income tax =
treaty which reads as follows.
   =20
Article IV - Fiscal Domicile - (it is the same number in most treaties)  =
For the purposes of this Convention, the term "resident of a Contracting =
State" means any person who, under the law of that State, is liable to =
taxation therein by reason of that person's domicile, residence, =
citizenship, place of management, place of incorporation or any other =
criterion of a similar nature, but in the case of an estate or trust, =
only to the extent that income derived by the estate or trust is liable =
to tax in that State, either in its hands or in the hands of its =
beneficiaries. For the purposes of this paragraph, a person who is not a =
resident of Canada under this paragraph and who is a United States =
citizen or alien admitted to the United States for permanent residence =
(a "green card" holder) is a resident of the United States only if the =
individual has a substantial presence, permanent home or habitual abode =
in the United states and that individual's personal and economic =
relations are closer to the United states than any other third State.  =
The term "resident" of a Contracting State is understood to include:=20
(a) the Government of that State or a political subdivision or local =
authority thereof or any agency or instrumentality of any such =
government, subdivision or authority, and=20
(b) (i) A trust, organization or other arrangement that is operated =
exclusively to administer or provide pension, retirement or employee =
benefits, and=20
    (ii) A not-for-profit organization that was constituted in that =
State, and that is, by reason of its nature as such, generally exempt =
from income taxation in that State.=20
2. Where by reason of the provisions of paragraph 1 an individual is a =
resident of both Contracting States, then his status shall be determined =
as follows:=20
(a) he shall be deemed to be a resident of the Contracting State in =
which he has a permanent home available to him. If he has a permanent =
home available to him in both Contracting States, he shall be deemed to =
be a resident of the Contracting State with which his personal and =
economic relations are closer (centre of vital interests);=20
(b) if the Contracting State in which he has his centre of vital =
interests cannot be determined, or if he has not a permanent home =
available to him in either Contracting State, he shall be deemed to be a =
resident of the Contracting State in which he has an habitual abode;=20
(c) if he has an habitual abode in both Contracting States or in neither =
of them, he shall be deemed to be a resident of the Contracting State of =
which he is a national;=20
(d) if he is a national of both Contracting States or of neither of =
them, the competent authorities of the Contracting States shall settle =
the question by mutual agreement.=20
-------------------
If you read this right, you were not taxable in Canada in 2002.  You =
WERE taxable in the US.
Answers to this and other similar  questions can be obtained free on Air =
every Sunday morning.
Starting this Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of =
Cartier Partners and I, David Ingram  will be hosting an INFOMERCIAL but =
LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the =
internet at
www.600AM.com=20
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321=20
New email to [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."
Be ALERT,  the world needs more "lerts"
Alaska,  Alabama,  Arkansas,  Arizona,=20
California,  Colorado, Connecticut, =20
Delaware, District of Columbia,  Florida,=20
Garland, Georgia,  Hawaii,  Idaho,  Illinois,
Indiana,  Iowa,  Kansas,  Kentucky,=20
Louisiana,  Maine,  Maryland, =20
Massachusetts, Michigan, Minnesota, =20
Mississippi,  Missouri,  Montana,  Nebraska, =20
Nevada, New Hampshire,  New Jersey,=20
New Mexico,New York, North Carolina, =20
North Dakota,  Ohio,  Oklahoma,  Oregon.=20
Pennsylvania,  Rhode Island,  Rockwall,=20
South Carolina, South Dakota, Tennessee, =20
Texas,  Utah, Vermont,  Virginia,=20
West Virginia, Wisconsin, Wyoming,=20
British Columbia, Alberta, Saskatchewan,=20
Manitoba, Ontario, Quebec City,=20
New Brunswick, Prince Edward Island,=20
Nova Scotia, Newfoundland, Yukon and=20
Northwest and Nunavit Territories, =20
Mount Vernon, Eumenclaw, Coos Bay, Boston=20
and Dallas Houston Rockwall Garland=20
Texas  Taxman and Tax Guru  and wizzard=20
wizard - consultant - expert - advisor -advisors consultants - gurus - =
Paris Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo=20
This from "ask an income tax and immigration expert" from www.centa.com =
or www.jurock.com or www.featureweb.com. David Ingram deals on a daily =
basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems  for the =
United States, Canada, Mexico, Great Britain, the United Kingdom, =
Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New =
Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, =
Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, =
Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, =
Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, =
Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with =
state tax returns, etc. Rockwall, Dallas, San Antonio and Houston Texas
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and =
Immigration Tips, Income Tax and ImmigrationWizard Income Tax and =
Immigration Guru Income Tax and Immigration Consultant Income Tax  and =
Immigration Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident =
Real Estate tax specialist expert preparer consultant expatriate anti =
money laundering money seasoning FINTRAC E677 E667 4789 4790 TDF-90 =
Reporting $10,000 cross border transactions
---------------------- multipart/alternative attachment
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/f2e34ddf/attachment.htm
---------------------- multipart/alternative attachment--

Trackback

Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20040405001003.html

No trackback comments for this entry.

0 comments