This is the time of year when Canadians snowbirds who have been seeking refuge in the U.S. from the Canadian winters start counting the days.
“When did we leave Canada exactly? Was it November 15, honey? How many days have we been gone?”
The magic number is 182. If you are a Canadian and you spend more than your allotted amount of days in the U.S. per year, you may be subject to U.S. income tax on your worldwide income. Beware, Canada will still consider you a resident which may lead to double taxation on your annual income.
For most Canadian snowbirds, half a year is just fine. They go back and forth to the sunbelt states each year using up their days and they do not have tax issues given that they file the Closer Connection Exception Form 8840. For others, 182 days is not nearly enough. They may have a dream to retire in the warmer climate or they want to spend more time with their adult children / grandchildren who are living in the U.S. Some Canadians want to move their business to Florida or Arizona and want to have the right to work in the U.S. Read the rest of this entry »