Immigration rules and taxation rules: two distinct sets of rules

Fall 2015 CSANews Issue 96  |   Posted date : Sep 29, 2015.Back to list

Bird talk - Le Jaseur
Dear Bird Talk,

I've read with interest the various letters to Bird Talk in issue 94 of CSANews. The clear, definitive answers to the various questions are very helpful...almost. I say almost, because I wonder if you're doing members a disservice with such emphatic answers without stating upon which rules you are basing your answers. The rules to which I refer are the immigration rules enforced by Customs & Border Protection (CBP) and the taxation rules of the IRS. I believe that it is CBP who applies the 30-day rule for snowbirds who return to Canada for Christmas, while Form 8840 of the IRS is very clearly based on an actual count of the number of days in the U.S. with no mention of short-term stays on either side of the border. Clearly, there are two distinct sets of rules which, while similar, are not the same. Snowbirds must be compliant with all rules and err on the side of caution when confronted by contradictions.

Stuart Gauld
Carman, MB

Response:
Ed.: “Err on the side of caution” is excellent advice. There are two separate U.S. government agencies and they have different rules. The INS is the U.S. Immigration and Naturalization Service – they care about how long you stay in the U.S. and whether you are eligible for entry at all. They generally allow you to stay for up to six months in any 12-month period as a visitor. If you leave the U.S., as on a short vacation, they will not credit you with those days unless you stay away for at least 30 days.

The IRS is the U.S. Internal Revenue Service (commonly known as the Tax Man) and they want you to pay taxes to the U.S. government. If you stay for longer than six months, they assume that you are resident in the U.S. and they’ll come after you to pay taxes…on your worldwide income! They deal in calendar years, just like the Canadian tax people. The IRS will start to review anyone who stays for three months or longer and then you may have to prove to them that you are not really a resident of the U.S. CSA recommends that you complete a Form 8840 every year and file it with the IRS. This will state that you have a “Closer Connection” to Canada and it could alleviate tax problems in the future.

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