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Canadian Resident with a green card - Canadian--Global tax help -

xxxxxx wrote:
Below is the result of your feedback form.  It was submitted by
xxxxxxx on Monday, June 15, 2009 at 19:01:39

My_question_is: Both

question: Dear Mr. Ingram, 
I find myself in a bit of a conundrum here. My husband has worked in the US since about 1996 or 97.
(He spends about six months of the year in the states) I believe for most of those years he used an L1 visa.

Last year he received a green card that his company had applied for on his behalf.(He also uses a reentry
card for going back and forth) Prior to last year he always filed a 1040NR. I need to do his taxes again
and find I am procrastinating because I'm concerned I'll make the wrong choices.

A.If I file a 1040nr he would lose his green card. Which would leave the alternative of applying for a TN1....
BUT...(there is always a but) if he is not approved for the TN1 he will be unemployed during a recession.
{He is a scientific technician and also does a lot of the technical training for the company}

B.He has to file Canadian taxes as a resident-wife, kids,house, drivers license,health care-definitely
residential ties. I didn't think you could file as a tax resident of two countries, yet he fits the criteria
for both. If he does a 1040 then he will have to report his RRSP's and since there were losses last year
can they be claimed against gains in future years. Or should he switch to a spousal RRSP for his contributions.
C. We could separate, everything would be the same except he would be "visiting" instead of "coming home".
But there would still be a lot of residential ties,esp medicare. What a Mess!
I must be incredibly thick because I'm having the devil's own time trying to sort out some answers to
these questions. I'm not even sure if I'm asking the right questions or overlooking some of the important ones.

Any thoughts on this issue would be greatly appreciated.
Have a Grand Day
XXXXXX ---------------------------------------------------------------------------
david ingram replies:

There is no one answer.

You have identified the conundrum.

For instance.

1.   If  he has a green card, He has to - no ifs, or buts file a 1040 return.  He can NOT file a 1040NR so he has to file a green card for 2008..

2.   To maintain his green card, he should be staying in the US for more than 6 months, BUT

3.   To maintain his Provincial Medical, he has to sleep in the province more than 183 days unless you live in Ontario where 153 days qualifies.   If the provincial medical discovers he has been out of the province for more than 6 months, they will cancel his provincial Medical plan.  That is likely okay because his company likely has a good medical for him. However, 'When' the provincial medical authorities  have the interview, it is common to have a US Homeland Security officer there to determine his eligibility for the green card.

4.   If it was transferable, the green card would be worth a fortune. Possessing a green card if there is a chance he would not qualify for a TN is a bonus, a gold mine an incredible stroke of luck.

5.   If you did separate and he continued to visit you and stay in the same house, it would not be considered a separation.

6.   It sounds like he is still working for the Canadian employer.

The Human Resources department (or you and your husband) should hire someone like myself to advise you on your situation before something comes up to wreck your life retroactively.
The following applies to any province or territory except Ontario.

1.   give up his provincial medical plan - except for Ontario, you can NOT have both.

2.    File a US 1040 return with his world income.  Claim a foreign tax credit on form 1116 for tax paid to Canad on any Canadian earnings.  This also means he has to file form 8891 and report any other Canadian investments on his US return.  Pay particular attention to Schedule B and question 7 and 8. You must answer yes to both from what you have asked.

3.    file the Canadian return and claim any US federal and state tax, Medicare and Social Security paid as a foreign tax credit on schedules 2209 and 2036 of the Canadian return.

Keep the green card, keep the job.

The advice is essentially the same for Ontario except that he can keep the Ontario medical as long as he is in Ontario more than 153 days.

Make sure he keeps real good track of his days in each country so that he can prove his 184 days in the US.  that green card is a bonus.


Last but not least, maybe you should all move to the US.

david ingram's US / Canada Services
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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 or  If you forward this message, this disclaimer must be included." -


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