Cross border tax: Canada PR holder + US H1b holder while staying in Canada

[Myang]

My family moved from US to Canada in June 2023 and activated our PR status here in Canada. We have been living here since then. Our family income (my salary & rental income) came from the US and we did not have income in Canada during the year 2023. I will continue working for my employer in the US and will visit for a week every month starting this year. Taxation is a little bit too complicated. I have talked to different accountants who had different opinions. For tax year 2023:

1. US: do I file a resident tax return or dual status? Or even nonresident for June - Dec? I have a home and retirement plan in the US.
2. Canada: this seems to be straightforward as I became PR the moment I landed in June, so I should file tax return as a resident from June - Dec 2023, right?
3. US-Canada treaty: I understand there is a treaty between these two countries. Should I file my US tax return first before doing anything with my Canada tax return?
4. Moving forward: If I only stay in the US for a couple of days each month throughout the year, how should I file US tax moving forward? I am in the process of applying for a green card.

Thanks!

 

[Ponga]

My family moved from US to Canada in June 2023 and activated our PR status here in Canada. We have been living here since then. Our family income (my salary & rental income) came from the US and we did not have income in Canada during the year 2023. I will continue working for my employer in the US and will visit for a week every month starting this year. Taxation is a little bit too complicated. I have talked to different accountants who had different opinions. For tax year 2023:

1. US: do I file a resident tax return or dual status? Or even nonresident for June - Dec? I have a home and retirement plan in the US.
2. Canada: this seems to be straightforward as I became PR the moment I landed in June, so I should file tax return as a resident from June - Dec 2023, right?
3. US-Canada treaty: I understand there is a treaty between these two countries. Should I file my US tax return first before doing anything with my Canada tax return?
4. Moving forward: If I only stay in the US for a couple of days each month throughout the year, how should I file US tax moving forward? I am in the process of applying for a green card.

Thanks!

4. Do you understand the requirements to maintain PR status in Canada and Green Card status in the U.S. simultaneously? It's doable, but not easy since the U.S. requirements are much more stringent than Canada, in terms of residency requirements.

 

[Myang]

4. Do you understand the requirements to maintain PR status in Canada and Green Card status in the U.S. simultaneously? It's doable, but not easy since the U.S. requirements are much more stringent than Canada, in terms of residency requirements.

Hi thanks for replying! Yes I am aware of that to some extent. My biggest concern for now is the tax return for last year and the next couple of years.

 

[Copingwithlife]

My family moved from US to Canada in June 2023 and activated our PR status here in Canada. We have been living here since then. Our family income (my salary & rental income) came from the US and we did not have income in Canada during the year 2023. I will continue working for my employer in the US and will visit for a week every month starting this year. Taxation is a little bit too complicated. I have talked to different accountants who had different opinions. For tax year 2023:

1. US: do I file a resident tax return or dual status? Or even nonresident for June - Dec? I have a home and retirement plan in the US.
2. Canada: this seems to be straightforward as I became PR the moment I landed in June, so I should file tax return as a resident from June - Dec 2023, right?
3. US-Canada treaty: I understand there is a treaty between these two countries. Should I file my US tax return first before doing anything with my Canada tax return?
4. Moving forward: If I only stay in the US for a couple of days each month throughout the year, how should I file US tax moving forward? I am in the process of applying for a green card.

Thanks!

You need to hire a cross border accountant versed in both USA & Canadian taxes.
You want your PR then at the same time apply for a GC.
So you’re just using Canada for the time being .
Don’t be cheap hire an accountant versus looking for the free advice online.
You won’t find a CPA with the experience to answer your questions hanging around here for free. They’ll be found in an office where they’d be charging $200-$300/hr to answer your questions.
And why do they charge such a high fee ? It’s complicated.
Do you work for free on your H1B ? No, I didn’t think so

 

[Myang]

You need to hire a cross border accountant versed in both USA & Canadian taxes.
You want your PR then at the same time apply for a GC.
Don’t be cheap hire an accountant versus looking for the free advice online

I am looking for an accountant. Though I try not to be cheap, they charge $2000 + for one person just on the US side (I need to file separately with my wife)

 

[Myang]

I have talked with multiple cross border accountant and each had a different opinion. Some say file US first and some say Canada first. Even regarding my US tax status they do not agree with each other (dual vs resident). I wonder whether anyone from here had a similar situation.

 

[ashwin35]

Not an expert at all. Just sharing my thoughts as a layman: If you're on H1B in the US, my understanding is that you only need to file taxes on your US income (correct?). But as a PR in Canada, you are taxed on global income. So in order to be able to file taxes in Canada (and get any credit for taxes paid globally) you will need your US tax filing done before you can file your Canada tax return. So, do your US returns first. Whether you do that as resident or dual status, I don't know. As a layman, I would see if I spent atleast 183 days in the US and meet the substantial presence test. If so, dual status might be the way to go. If you have less than 183 days of presence in the US, maybe you should file as a non-resident? Not sure what (if any) implications that may have in the future when you apply or advance through the US GC and citizenship processes.

 

[Myang]

Not an expert at all. Just sharing my thoughts as a layman: If you're on H1B in the US, my understanding is that you only need to file taxes on your US income (correct?). But as a PR in Canada, you are taxed on global income. So in order to be able to file taxes in Canada (and get any credit for taxes paid globally) you will need your US tax filing done before you can file your Canada tax return. So, do your US returns first. Whether you do that as resident or dual status, I don't know. As a layman, I would see if I spent atleast 183 days in the US and meet the substantial presence test. If so, dual status might be the way to go. If you have less than 183 days of presence in the US, maybe you should file as a non-resident? Not sure what (if any) implications that may have in the future when you apply or advance through the US GC and citizenship processes.

Thanks! I have found a cross-border accountant charging a reasonable service fee. I am filing as a resident on both sides.

 

[wego2canada]

Hey @Myang - Could you please share details on the cross-border accountant - how much do they charge ?

 

[Myang]

Hey @Myang - Could you please share details on the cross-border accountant - how much do they charge ?

The cost is case by case. For my case, total is about $1800 for two people. You can search Mang Wu cross border tax services.

 

[ThePRguy]

Hi @Myang-Could you please share what strategy your CPA end up using? File taxes in the US first and then in Canada with US taxes as foreign tax credit or the other way around? How did you account for number of days working from Canada vs working in the US?

Thanking in advance for your reply.