Canadian Snowbirds Owning Property and Vacationing in the US.
So many Canadians spend extended periods of time in the States that we are even given a nickname; Snowbirds. Snowbirds, who own property in the States should be aware of tax ramifications. Snowbirds should also be aware of various triggering events depending on the length of time spent in the States.
Having made this election, you will be required to file a U.S. return annually. This election remains in force for subsequent years and can only be revoked with the consent of the IRS. When you file, your rental income will be subject to the graduated tax rates applicable to a U.S. resident on the taxable income realized from a rental activity.
For both the U.S. and Canada, you should maintain records of your personal and rental use of the property and related expenses.
If you spend time in the U.S., you may have to file a U.S. tax return. Your obligation as a Canadian resident to file a U.S. tax return varies according your status as defined by the U.S. As a general rule, if a foreign national has never spent more than 121 days in the U.S. in any tax years, he/she will never be considered a U.S. resident under the "substantial presence" test.
than 31 days in a calendar year
31 and 183 days in a calendar year
All the days you
spent in the U.S. during the year;
If the total is 183 days or more, you meet the substantial presence test and you are subject to U.S. tax. For example, if you spent 130 days in the U.S. in each of 2003, 2002 and 2001, your calculation would come to 130 + 43 + 22 = 195 and you meet the substantial presence test.
If your primary residential ties are with Canada you can still avoid paying U.S. tax by filing the IRS Form 8840, Closer Connection Exception Statement for Aliens. This form must be filed for each year that you meet the substantial presence test. Failure to file when required to do so may result in fines of up to $1,000 for each source of income received, even if no tax would have been payable on your U.S. tax return!
than 183 days in a calendar year
Iif you are a dual resident, the Canada United States tax treaty may allow you to claim non-resident status in the U.S., enabling you to file a non-resident return instead. To claim this relief, you must complete Form 8833 and attach it to a timely filed non-resident U.S. tax return. As a non-resident, you are taxed only on certain U.S. source income rather than your world income. However, you should seek advice before choosing this option, as filing a non-resident return does not always result in a lower tax liability. In addition, it may affect your qualifications for a green card or residency permit.
If you require medical assistance of any kind while overseas, or in the United States including medication, physician visits, or a hospital stay it will cost you.
Many hospitals in the United States and other countries won't even admit patients lacking medical coverage of some kind.