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My question is: Applicable to both US and Canada
QUESTION: I am a U.S. landed Immigrant to Cananda who after
several years
of working in Canada I found myself without work & had to go to
the U.S. to
avoid unemployment & possible bankruptcy & wellfare.
I did not complete my citizenship before I went so I was still a
Landed
Imm. as I began working first in the New England area, then
Arizona, then
California 3 years in all. I did file taxes in the U.S. but not
in Canada.
I am now working in Canada again & need to file my taxes for
earnings here,
how much is Revenue Canada going to charge me on the earnings in
the US as a
general percentage of those earnings? How is the tax determined
if I have
paid in the US already? How should I approach this issue?
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David Ingram replies:
Assuming that you always intended to return to Canada and were
working out
of the country on a temporary basis to keep body and soul
together, you have
a good claim to still being a landed immigrant to Canada.
However, you could be in trouble if an immigration officer
decided to question you
closely.
Therfore, I recommend that you catch up your Canadian income tax
returns by
filing as a Canadian resident. Depending upon how much you
earned, you
could easily be in the position where there is no tax paid to
Canada after
deducting the foreign tax credit for the tax paid to the US and
California,
Arizona or your New England state.
It is hard for many Canadians to believe today, but the tax
rate is lower in Canada
than California for some of the lower income levels for a single
person.
A second method would be to file as a defacto resident of Canada.
A defacto
resident reports their world wide income on their Canadian Tax
Return
because they have maintained significant ties to Canada.
However, they
exempt their US income from Canadian Tax.
That has a little danger in that you are claiming a closer
connection to the
US and an immigration official could try and use that situation
to say that
you had abandoned your Canadian Residence.
I am assuming that you did NOT get official permission from
Canda to leave for three
years.
David Ingram of the CEN-TA Group
US / Canada / Mexico tax and working Visa Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
My office would be happy to help you with these returns of
course. Your
situation is a normal return in our office.
david ingram
Hope this helps.
This question came from Ozzie Jurock's excellent real estate site
at www.jurock.com - the question site itself is at:
http://www2.jurock.com/askexpert/ask.asp?aid=121&cid=63
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