TN-1 Visa, Canadian Resident, Working in US–What Do I File?

Question

I’ve received an offer from a US company, and am applying for a TN-1 visa. My plan is to work in the US, and then depending on how that goes, I might move and bring my family. I’ve done a bunch of googling, but still don’t understand what “Deemed non-resident” means.

If I am working and living in the US for over 183 days, and making zero income in Canada, do I have to file tax in Canada? I still have my house here, my wife lives in Canada, kids, etc. What do I do?

Answer

In situations like this, it makes sense to step back and take a look at what Canada calls “primary and secondary ties.” So things like:

· Where is your primary residence;

· Where are your social ties (ie spuse/kids/family etc);

· What drivers license do you use;

· Where are most of your assets/bank accounts etc;

If the answer to the majority of these questions is “Canada”, then you are likely a Canadian resident for tax purposes, even though you are operating out of the US for the majority of the year. As such, you will need to file a Canadian T1 tax return and report your worldwide income.

Separately, because you are in the US for over 183 days, you will need to a US tax return as well. (Additionally, because you are earning US-source income, you would want to file a US return anyway.) You’ll be looking at filing a US Form 1040NR, paying the US tax, and then subsequently claiming the US tax paid as a foreign tax credit on your Canadian return.