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Taxation for Canadians working in the US

Taxation for Canadians working in the US

Old Jan 27th 2001, 8:47 pm
  #1  
Y
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Hello,

Does anyone know if Canadian citizens working in the US, but not owning any property in
Canada, have to pay taxes in Canada on US income? (in addition to paying taxes in the US).

Thanks in advance.

- Y
 
Old Jan 27th 2001, 9:59 pm
  #2  
Alex Levitsky
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Hello,
>
> Does anyone know if Canadian citizens working in the US, but not owning any property
> in Canada, have to pay taxes in Canada on US income? (in addition to paying taxes in
> the US).
>
> Thanks in advance.
>
> - Y

Residents of Canada (citizens and immigrants) have to pay Canadian income taxes on all
income, earned anywhere in the world, including the US. If you don't own any property in
Canada, then you don't have to pay any municipal property taxes, regardless of where you
live or where you work.

--
Alex Levitsky [email protected] Toronto Ontario Canada
 
Old Jan 28th 2001, 5:56 am
  #3  
Andrew Miller
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Ownership of property in Canada is not the only factor deciding if Canadian citizen is
subject to income tax in Canada. Canadian citizens are taxed on their worldwide income,
but the tax system is based on residency status and as long as they are deemed to be
Canadian residents for income tax purpose they must report their US income in Canadian tax
return and pay any tax if due. It is not that easy to become non-resident for tax purposes
- decision is made by Revenue Canada after you submit application to become non-resident.

You're a deemed resident of Canada for tax purposes if you:

- stay in Canada for 183 days or more in the tax year;

- have residential ties with Canada; and

- aren't considered a resident of another country under the terms of a tax treaty between
Canada and that country.

Residential ties include:

- a home in Canada

- a spouse and/or dependants in Canada

- any personal property in Canada, such as a car or furniture.

Other ties that may be relevant include:

- social ties in Canada

- a Canadian driver's license

- a Canadian bank account or credit cards

- frequent visits to Canada

- health insurance within a Canadian province or territory.

If you're a deemed resident of Canada for the tax year, you:

- must file a Canadian income tax return for that tax year

- must report "world income" (income from all sources, both inside and outside Canada) for
the entire tax year

- can claim all deductions and non-refundable tax credits that apply to you

- are subject to federal tax, but -- instead of paying provincial or territorial tax --
you'll pay a federal surtax

- are eligible to apply for all federal credits, but you're not entitled to provincial or
territorial credits.

Where an individual leaves Canada after May 26, 1980, the following factors will be taken
into consideration in determining whether or not the individual will remain a resident of
Canada for tax purposes while abroad:

(a) permanence and purpose of stay abroad,

(b) residential ties within Canada,

(c) residential ties elsewhere, and

(d) regularity and length of visits to Canada.

In order for an individual to become a non-resident of Canada, there must be a degree of
permanence to his stay abroad. Where a Canadian resident is absent from Canada (for
whatever reason) for less than 2 years, he will be presumed to have retained his residence
status while abroad, unless he can clearly establish that he severed all residential ties
on leaving Canada. If there is evidence that his return to Canada was foreseen at the time
of his departure
(d.a. a contract for employment upon return to Canada), Revenue Canada will presume that
he did not sever all residential ties on leaving Canada.

Generally speaking, an individual who leaves Canada and becomes a non-resident will not
retain any residential ties in the form of personal property (e.g. furniture, clothing,
automobile, bank accounts, credit cards, etc.) or social ties (e.g. resident club
memberships, etc.) within Canada after his departure. Where such ties are retained within
Canada, Revenue Canada may examine the reasons for their retention to determine if these
ties are significant enough to conclude that the individual is a continuing resident of
Canada while absent. Other ties that may also be relevant in this determination are the
retention of

(e) provincial hospitalization and medical insurance coverage,

(f) a seasonal residence in Canada,

(g) professional or other memberships in Canada (on a resident basis), and

(h) family allowance payments.

Accordingly, where a resident of Canada goes abroad, but does not establish a permanent
residence elsewhere (temporary work or other non-immigrant visa), there is a presumption
that he remains a resident of Canada. Also, the fact that an individual establishes a
permanent residence abroad does not, in and by itself, mean that the individual has become
a non-resident of Canada.

So, as you can see from the above - it is not that easy to become non-resident for
Canadian tax purpose. If you work in US on a temporary work visa and are not US permanent
resident then you may be deemed (and most likely you will) to be Canadian resident for tax
purposes and be subject to Canadian taxes.

--

../..

Andrew Miller Immigration Consultant Vancouver, British Columbia email:
[email protected] (delete REMOVE and INVALID from the above address before
sending an email)
________________________________

> Hello,
>
> Does anyone know if Canadian citizens working in the US, but not owning any property
> in Canada, have to pay taxes in Canada on US income? (in addition to paying taxes in
> the US).
>
> Thanks in advance.
>
> - Y
 
Old Jan 28th 2001, 12:04 pm
  #4  
Stephen C. Gallagher
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Hello,
>
> Does anyone know if Canadian citizens working in the US, but not owning
any
> property in Canada, have to pay taxes in Canada on US income? (in addition to paying
> taxes in the US).

As long as you are no longer considered to be a resident of Canada, then you are not
subject to Canadian taxes on your US income. Check the CCRA website for what you must do
to be considered a non-resident.

Stephen Gallagher
 

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