Posted date : Dec 15, 2017.
If my wife and I visit Arizona for five months every calendar year (say Nov. 1-March 31) and file an 8840 every year, will we be subject to U.S. taxes based on worldly income? Our U.S. tax accountant in Canada says that it is very possible and recommends to not spend more than 120 days every year in the U.S.
Ed.: No, of course not! If you earn income in the U.S., you DO have to file a U.S. tax return, though. Many people confuse the 120 days indicated on the Form 8840 with the six months you are allowed to stay in the U.S. The 8840 should be filed if you spend more than 120 days in the U.S. and I would personally file it if you are over 90 days. The completed 8840 tells the government that you are not a U.S. resident, but a Canadian resident, that`s all really. There is no risk in filing, although some people will tell you otherwise. You are allowed to spend six months (182 days) in the U.S. in any 12-month period. Notice that this is not in a calendar year, but in any rolling 12-month period. Your five-month holiday is perfect and very proper.