You have asked as to the implications to a U.S. citizen who lives and works in Canada and the resulting tax liabilities to both countries. A person’s being taxable in Canada is not determined based on citizenship, but rather by residence. As such, once an individual becomes a resident of Canada, he will be subject to Canadian taxation on his world income earned from that point on.
Unlike Canada, the U.S. reserves the right to tax its citizens on certain income even when they are no longer resident in the U.S. These rules should be reviewed in detail with U.S. counsel.
Depending on how an individual is subject to both Canadian and U.S. taxes, he may apply the taxes paid in one country to reduce taxes paid in the other country as a foreign tax credit.
Disclaimer
The nature of this facility is to provide a general response to a general question. Under no circumstances should anyone act on this information without obtaining analysis and counsel from a qualified advisor with respect to the specific situation.
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Phillip Nadler, CA
Richter Usher & Vineberg
http://www.richter.ca
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