Before you stock up on suntan lotion and head south, you might want to check the United States tax rules first.
“Escaping winter for too long could cause you some U.S. tax problems,” cautions Chartered Accountant Mark Feigenbaum in Thornhill.
“The U.S. taxes its citizens and residents on their worldwide income. Becoming a resident for tax purposes means you spend more than 183 days in the U.S. This is based on a formula calculated over three consecutive calendar years – all of the days you spent this year are counted, plus one-third of the days you spent last year, plus one-sixth of the days the year before.
“This means spending more than 121 days in three consecutive calendar years would calculate to the 183 days needed,” notes Feigenbaum, who is also a U.S. Attorney and Certified Public Accountant. “So count your days carefully if you come back to Canada late in the spring and, in the same year, return to the U.S. in the autumn.”
If you happen to go over the 183-day formula in any year, you can file a request to the U.S. government, asking that your potential status as a U.S. tax resident (due to your closer connection to Canada) be reconsidered.
Brought to you by the Institute of Chartered Accountants of Ontario
The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>
