Posted date : Nov 13, 2017.
Dear Bird Talk,
I recently received a newsletter from Moody’s Gartner stating that the proposed “snowbird visa” legislation to increase the amount of time which snowbirds can spend in the U.S. is a potential “tax bomb,” as the “day count” for the purposes of the snowbird visa is different than the day count for tax purposes. As a result, would-be holders of the snowbird visa would be subject to U.S. income tax and estate tax if they remain in the U.S. for more than 180 days a year. Is this interpretation accurate and, if so, why would anyone want the snowbird visa if it will trigger U.S. tax liability? I have attached a copy of the Moody’s Gartner newsletter for your information.
Ed.: The amount of misinformation and false rumours flying around out there is astonishing. There are three critical issues being resolved:
One – Getting the JOLT bill passed in the U.S. House of Representatives. It has already been passed by the U.S. Senate and CSA is quite confident that it will pass this year;
Two – Taxation in the U.S .This has been discussed at all levels of government in the U.S. and they have informally agreed to adjust the Form 8840 to reflect an eight-month visit. This apparently will satisfy the IRS (Internal Revenue Service) and the JOLT Act will satisfy the INS (Immigration and Naturalization Service). In other words, you will still be regarded as a Canadian resident for U.S. tax purposes;
Three – A Canadian province stripping you of your Canadian health care because you are out of the province for too long. CSA is working every day to resolve this, and many provinces now allow up to seven months of absence. We have been advising most provinces of the Snowbird Visa’s pending changes and that we expect an eight-month absence, without penalty, from them. My guess is that when the provinces weigh the prospect of losing tax dollars to people spending the full winter in the United States, they will choose to allow them to keep their Canadian Health Care benefits. Remember that this is an extra two months during which they don’t pay our medical costs. Now that’s an incentive. I have often said that, instead of the provinces fighting us on all of these issues, they should give everyone over age 65 a plane ticket to a southern destination for the winter. The cost savings to our medical system would be amazing. And, by the way, you provinces should obey the law (The Canada Health Act) and pay what you should be paying outside of the province!!!!!