Canadian moves to the US - Does he need to file a Cdn return? No -

Tom Byrne wrote:
Hi, I found your web site and it's fantastic, there is a lot of useful information.

I had a question that I didn't find the answer to:

I'm a dual US/Canadian Citizen. I lived in canada until 1998, and moved to the US in 1999. I have been a full time resident of the US since then, no canadian property, bank accounts, etc. Was I required to file canadian taxes for 1999-2007? Was I supposed to file any forms/etc with the canadian (and ontario) government when I left?


-Tom Byrne

david ingram replies:

Believe it or not, I did a tax return for an old friend with your exact same name last Thursday.  When your email came, I thought it was the same person.

If you moved to the US and did not work in Canada or visit it extensively or have any investment or rental or royalty income from Canada since that point, you have not had to file a Canadian return since you  left.

You should have filed a departing Canada return when you left.  However, after 9 years, it just does not matter.

david ingram

These older answers might help


I'm writing to seek advice on my US and Canadian tax and residency situation, and if necessary, to engage your services.

Here's a summary of my circumstances:

I am a Canadian citizen (I am also an Australian citizen, having immigrated from Australia). On 3 Aug 2006, I left Vancouver in order to start a job at xxxx xxx in Washington DC. I commenced that job on 1 Sept 2006, and still work there. I have TN status in the US.

I filed both Canadian and US taxes for 2006, paying the Canadian tax rate since it appears I was just outside the 183 day rule. This was not filed as a departure return.

While here, I met a woman living locally to whom I am now engaged. She is neither an American nor Canadian citizen, and is in the US on a H1B visa. . Our plans beyond the end of that job are unknown.

I have no sources of income or assets in Canada beyond an RRSP, and a bank account with a small amount in it. I have a few personal effects in storage in Vancouver, but those will be getting removed within a month. I do not maintain an address or residence in Canada.

My questions:

1) Do I have to file a Canadian tax return this year? From what I can gather, I don't think so -- I believe I'm exempt under the tax treaty with the US?

2) Is there any benefit in filing form NR73 (Determination of Residency Status)? The CRA's site seems intent on getting me to fill in that form, but I'm very wary of filling this in, lest I am inadvertently exposing myself to liabilities in doing so. In particular, this form lacks the ability for me to declare "I have no idea how long I'll be living outside of Canada... could be 3 years, could be forever, although I truly hope not".

3) I thought my Canadian tax situation was simple enough in 2006 to do it using an online tax program (and also, because I was unable to find anyone who could do my Canadian tax return locally). This was probably a mistake, because in July 2007, the CRA sent me a letter requesting all documents for a full review of my return. I complied, and have not heard anything from them since. Is there any action I should be taking with respect to this?

Any assistance you can offer would be greatly appreciated.

david ingram replies:

When you left, you should have filed a departing Canada Tax return.  As described, you were NOT taxable in Canada on your US earnings.  Because the CRA has 'opened' it up, you should amend the 2006 return by filing a T1-ADJ to remove the US earnings. You should have a significant refund. 

If you filed a US 1040, your US return will also be (99% likely) incorrect as well and should likely be amended as well unless you filed it as a dual status return (box or line 35b) or reported your Canadian earnings on the US return and claimed an exemption or foreign tax credit.  *Your US return could have been done three perfectly legal ways differing only in the final tax payable.)

Your lady friend should start her paperwork for her green card immediately. 

You should get the University to get you an H1B and then a green card as well sooner rather than later.

Filing the NR73 is a fool's game.  BEFORE Filing, get your Canadian stuff out of storage - give it away if necessary.

Make sure you have told your bank that you are a non-resident.

You were required to get a Washington, DC  Driver's licence within 30 days of being there. You needed to get your car registered in DC within 30 days as well or get a non-resident permit but the non-resident permit is only good for 6 months.

You should likely invest $450 and buy an 'up to an' hour of my time by phone.  If you do, have your lady on the phone at the same time.

I have added you to my email list as well.  Other questions will help over time.

I moved to Nevada for a job July 2006, and still work there now.  Do I do my
taxes in Canada and us separately? My earnings for 2006 in Canada were very
david ingram replies:

You have more than one choice.

1.    a) You file a departing Canada tax return including form T1161 and 1243 and 1244 if you left more than $25,000 worth of assets behind.
        b) You file a 1040NR Dual Status Statement for the US and then a 1040 Dual Status Return to report the US income only.  The statement is there to separate out any US income you may have received BEFORE you actually went to the US. You can NOT claim the standard deduction on a Dual Status Return You can only use itemized deductions on a Dual Status Return. 


2.   a)   You file Canada as in 1a) above.

       b)   You file a 1040 tax return reporting your world income for the year including the Canadian income.  Then you file US form 1116 to claim a foreign tax credit for the tax, CPP and EI you paid to Canada.  This allows you to claim the standard deduction on the US return.


3.   a) You file Canada as in 1 a) above

    b)   You file US 1040 and form 2555 to exempt the Canadian income.  This also allows you to claim the standard deduction on the US 1040.

Good luck.  Remember that you can always send the returns here by fax, courier snail mail or pdf email.


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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. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
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. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

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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