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I am a retired American who has been in a marriage like relationship with a Canadian for the last three years. We bought a house last June and will live largely in Canada.
1. Should I apply for residency?
2. Will I get my social security benefits?
3. Will I have to pay taxes in both the US and Canada?
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david ingram replies:
Not enough information for a decent answer.
You and your man should come in for a consultation. In the meantime, you should goto www.centa.com and click on [US / Canada taxation] (in the box at the left of that screen).
You will find that with or without a visa, if you have been in Canada more than 183 days in any of these years, you are already subject to Canadian Tax (in reverse, if your husband was in the US for an average of 120 days a year for the last three years, he is also subject to US tax).
Read Article IV of the US Canada Income Tax Treaty which you will find about four or five printed pages into that section.
To answer your questions which I have taken the liberty of numbering:
1. If you still have a home in the US and you and your husband are spending significant time there, you may or not have to apply for residency. He has the same problem in reverse. You both need to put together what I call a border crossing kit which explains your citizenship, your relationship, has copies of your income tax returns, copies of your lease or ownership papers for the respective residences., etc.
Under these circumstances, you and your husband can visit each other at the other's residence as visitors.
If you have given up your US home and are only living in Canada, then you are already illegal and must apply for residency. Willow Arune in our office can assist you here.
2. There is no problem with getting your social security benefits in Canada. However, benefits which would usually be tax free in the US are absolutely taxable in Canada if you are here more than 183 days a year with or without a residency permit.
3. You have to file tax returns in both countries. I do not know if you will owe taxes in both countries. For example, if you had a combination of pensions, interest and dividends coming from the US, the US Canada Income tax treaty limits your US tax to 10% on interest and 15% on dividends and pensions and the US social Security is only taxed in Canada.
After filing your US return, you would report the same income in Canada and claim credit for the taxes paid to the US. There would NOT be DOUBLE taxation. "JUST ONE NET TAX to Canada.
On the other hand, if your only US income is from social security, you will file both returns but only pay tax to Canada.
Hope this helps. You and your husband (you are considered married under Canadian Income Tax and Immigration law) need to consult with someone like myself before you end up with a rude surprise such as either government going after one or both of you for three or four years of back taxes.
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."
Be ALERT, the world needs more "lerts"
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