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?
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.
Usual Disclaimer: This information is for general information purposes only, and deals with complicated and time-sensitive info that may not apply to your situation. Tax rules are always changing, and this information may not be current. Tax is complicated, this information is not tax advice, and don’t rely on this info to make tax decisions – Hire someone to help you.