children born in US from a Canadian mother - david ingram expert cross border non-resident income tax help and preparation by fi

QUESTION:
I am a Canadian woman in the US. My 2 kids were born in the US from a US man. Their father and I never married and he has deserted us. I need to go back to Canada, I need help with my kids. How do I register my 2 children's Canadian citizen status so I can get them back into Canada with me?
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david ingram replies:
The information you need is in this old question
QUESTION: My son-in-law is a Canadian Citizen. He has residence status in the US and has had it for about 12 years. He is married to my daughter and they have two children. My question are twofold: I know that Canada recognizes dual citizenship. Doe the US recognize dual citizenship?  Second question: My son-in-law had been working in the USA for some time. He is well educated and has a very good job. He pays US taxes, files a tax return every tear. He also pays into the social security system. Can he / or will here receive Social Security benefits when he reaches the age of 65. He was told he could not. There must be some treaty agreement between the Us and Canada on this.    
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david ingram replies:
Goto www.centa.com and read the October 1993 newsletter in the top left hand box for about 12 pages on dual citizenship and the history between the US and Canada.   The Canadian government position is at http://www.ci.gc.ca/english/about/citizenship/dual-info.asp
You will see that the US does recognize dual citizenship and my recommendation is that your s-i-l gets his US citizenship as soon as possible.  
His two children are also Canadians and he should register their birth and get Canadian passports for them as soon as possible as well.  See how to at http://www.ci.gc.ca/english/information/faq/citizenship/cit-proof-faq02.asp
He will qualify for US Social Security after paying into the US system for 6 quarters.  He has to pay in for 40 years to get the maximum and 30 years to get a proper pro-rated amount.  If he pays in for less than 20 years there is a bit of a clawback under legislation called the 'WINDFALL ELIMINATION PROVISION' WHICH CAN APPLY TO A SCHOOL TEACHER MOVING FROM FLORIDA TO OKLAHOMA as well.  
he WEP applies to anyone who did not pay into US Social Security for 30 years because they were paying into another political jurisdiction's pension. 
He will also qualify for a reduced Canadian CPP if he worked in Canada  after turning 18.
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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.
--IRS Circular 230 Disclosure:  To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.--
-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 for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com or www.garygauvin.com.  If you forward this message, this disclaimer must be included." -
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