Work in USA; travel back to Canada at weekends; residence time calculation

[Natan]

Insurance and registration issues can get very confusing in a cross border situation. For example, Michigan requires any vehicle physically present in the state for more than 30 days out of the year to carry a Michigan no-fault insurance policy even if it is not registered in Michigan. These days need not be consecutive. This law applies even to non residents. Moreover, there is considerable confusion about what exactly constitutes a valid Michigan no fault policy.

Other states require you to obtain their state's driver's license after a certain period of physical presence there (some as little as thirty days). Meanwhile, most Canadian provinces seem to expressly forbid holding more than one valid license at a time.

If one holds multiple driver's licenses, it would be prudent never to present a US licence when a claim against Canadian insurance may be involved. (ICBC in BC will use any excuse to avoid paying a claim, including having a second licence.)

 

[screech339]

I had a police do a check while I was on side of road. My wife was having motion sickness. She had red wine and pass by drivers called police thinking my wife was throwing up blood (in the winter). Anyway while police was checking up on us, making sure we were okay, he noticed I had a US driver licence in my wallet after I gave him my ON Licence. He asked for it and I explained to him that I recently "moved" back to Canada, thus I still have my US licence. He told me to leave it home when I get home.

 

[Natan]

I had a police do a check while I was on side of road. My wife was having motion sickness. She had red wine and pass by drivers called police thinking my wife was throwing up blood (in the winter). Anyway while police was checking up on us, making sure we were okay, he noticed I had a US driver licence in my wallet after I gave him my ON Licence. He asked for it and I explained to him that I recently "moved" back to Canada, thus I still have my US licence. He told me to leave it home when I get home.

As a regular cross border traveller, I keep all licences and travel documents in a separate, not casually visible, part of my wallet. I have memorized where important docs are hidden in the wallet, so I can pull them out without revealing what else is in hidden compartments. I view an open wallet as public facing and make sure what is seen conveys the impression most advantageous to me, regardless of which country I am in.

When stopped by the police, I have my driver's licence, registration and insurance out and ready before they leave their car. This avoids "mishaps" by panicked police officers -- especially south of the border. Because "MY LIFE MATTERS"!

 

[ImmiToCanada]

Hi links18, harirajmohan, screech339, and Natan,

I plan to drive between Connecticut and Quebec on every weekend (4.5 hours driving) to accumulate time for Canadian citizenship while working in Connecticut on H1B, starting from later this year or early next year.

I have the following plan to maximize my chance of citizenship and I would really appreciate the input from all of you.

a) maintain "residence" in Canada as suggested by Natan, including not using USA address, maintaining a real Canadian life with credit card bills, mortgage, Canadian-registered and insured cars. I also claim Canadian residence status at both USA and Canadian borders.

b) file Canadian tax form, claim residence status in Canada; also file US federal tax form, NOT file US state tax form, and NOT claim USA residence status on tax forms.

A few confusing questions are:

a) car insurance coverage outside Canada by a Candian insurance company. As screech339 says, the problem is that the outside Canada coverage may only be up to 6 months.

b) most of my income will be from a USA employer, will this bring issue while filing Canadian tax form and claiming Candadian residence status?

Thanks again everyone and hope you all have a great weekend.

 

[links18]

Hi links18, harirajmohan, screech339, and Natan,

I plan to drive between Connecticut and Quebec on every weekend (4.5 hours driving) to accumulate time for Canadian citizenship while working in Connecticut on H1B, starting from later this year or early next year.

I have the following plan to maximize my chance of citizenship and I would really appreciate the input from all of you.

a) maintain "residence" in Canada as suggested by Natan, including not using USA address, maintaining a real Canadian life with credit card bills, mortgage, Canadian-registered and insured cars. I also claim Canadian residence status at both USA and Canadian borders.

b) file Canadian tax form, claim residence status in Canada; also file US federal tax form, NOT file US state tax form, and NOT claim USA residence status on tax forms.

A few confusing questions are:

a) car insurance coverage outside Canada by a Candian insurance company. As screech339 says, the problem is that the outside Canada coverage may only be up to 6 months.

b) most of my income will be from a USA employer, will this bring issue while filing Canadian tax form and claiming Candadian residence status?

Thanks again everyone and hope you all have a great weekend.

Some Canadian insurers will consider you to have lost coverage when you would have become legally obligated to register your car in another jurisdiction, even if you don't actually register it. This becomes complicated because some states require even non-residents to register their cars in some situations, usually after a certain period of physical presence. Will leaving to return to Canada every weekend reset this period? It would depend on state law. Vehicle registration and insurance are state and provincial matters and each one can have different laws, putting some people in impossible legal situations, i.e. Being legally required to register a car in the states, thus losing Canadian insurance--even while legally still a resident of a Canadian province, meaning you might have to reimport your car back to Canada and pay applicable tax each time--or at the very least deal with border officers who will think you have to do this. Better do your research on Connecticut and Quebec.

 

[Natan]

Hi links18, harirajmohan, screech339, and Natan,

I plan to drive between Connecticut and Quebec on every weekend (4.5 hours driving) to accumulate time for Canadian citizenship while working in Connecticut on H1B, starting from later this year or early next year.

I have the following plan to maximize my chance of citizenship and I would really appreciate the input from all of you.

a) maintain "residence" in Canada as suggested by Natan, including not using USA address, maintaining a real Canadian life with credit card bills, mortgage, Canadian-registered and insured cars. I also claim Canadian residence status at both USA and Canadian borders.

b) file Canadian tax form, claim residence status in Canada; also file US federal tax form, NOT file US state tax form, and NOT claim USA residence status on tax forms.

A few confusing questions are:

a) car insurance coverage outside Canada by a Candian insurance company. As screech339 says, the problem is that the outside Canada coverage may only be up to 6 months.

b) most of my income will be from a USA employer, will this bring issue while filing Canadian tax form and claiming Candadian residence status?

Thanks again everyone and hope you all have a great weekend.

If your paycheque withholds Connecticut state taxes, you should file a Connecticut state return as a non-resident.

You can receive income from a USA employer and file Canadian taxes as a Canadian resident -- this will not be considered abnormal by CRA.

I strongly recommend you keep a log of all trips to each country that includes: (i) date departed; (ii) date returned; (iii) number of days in Canada; (iv) number of days in the USA. (My border reports not only had missing entries; but they also reported trips I did not take. Having an accurate log and evidence to support each day in Canada may prove very useful.) If possible, try to have at least one receipt for every day present in Canada -- some proof that you were actually here the days you attest to in your citizenship application.

I would research the car insurance and registration requirements very carefully (being aware that insurance and registration personnel on both sides of the border will provide you with lots of MISinformation. As a general rule of thumb, the higher the level of someone's certainty, the more skeptical you should be of the information they provide. Please be advised that border guards are the LEAST likely to have any expertise in this matter and are the most likely to have an air of certainty while providing their misinformation!)

 

[alphazip]

Hi links18, harirajmohan, screech339, and Natan,

b) most of my income will be from a USA employer, will this bring issue while filing Canadian tax form and claiming Candadian residence status?

No that won't be a problem. I live in a border city where thousands of people are employed by U.S. employers. Revenue Canada won't care about that.

My question is: how will you avoid paying Connecticut income tax, even if you claim to be a non-resident? Are you giving your employer your local address for your W-2 or your Quebec address?

http://www.ct.gov/drs/cwp/view.asp?a=1462&q=266284

 

[Natan]

No that won't be a problem. I live in a border city where thousands of people are employed by U.S. employers. Revenue Canada won't care about that.

My question is: how will you avoid paying Connecticut income tax, even if you claim to be a non-resident? Are you giving your employer your local address for your W-2 or your Quebec address?

http://www.ct.gov/drs/cwp/view.asp?a=1462&q=266284

As the "source" of your income is Connecticut, it is likely that state taxes shall be withheld, especially if you provide a foreign (Canadian) address. Further, it is possible that Connecticut assesses nonresident income tax (like New York City). If state taxes are not withheld, there is no reason to file a state return.

 

[links18]

.

I would research the car insurance and registration requirements very carefully (being aware that insurance and registration personnel on both sides of the border will provide you with lots of MISinformation. As a general rule of thumb, the higher the level of someone's certainty, the more skeptical you should be of the information they provide. Please be advised that border guards are the LEAST likely to have any expertise in this matter and are the most likely to have an air of certainty while providing their misinformation!)

Amen to that.

 

[screech339]

Hi links18, harirajmohan, screech339, and Natan,

I plan to drive between Connecticut and Quebec on every weekend (4.5 hours driving) to accumulate time for Canadian citizenship while working in Connecticut on H1B, starting from later this year or early next year.

I have the following plan to maximize my chance of citizenship and I would really appreciate the input from all of you.

a) maintain "residence" in Canada as suggested by Natan, including not using USA address, maintaining a real Canadian life with credit card bills, mortgage, Canadian-registered and insured cars. I also claim Canadian residence status at both USA and Canadian borders.

b) file Canadian tax form, claim residence status in Canada; also file US federal tax form, NOT file US state tax form, and NOT claim USA residence status on tax forms.

A few confusing questions are:

a) car insurance coverage outside Canada by a Candian insurance company. As screech339 says, the problem is that the outside Canada coverage may only be up to 6 months.

b) most of my income will be from a USA employer, will this bring issue while filing Canadian tax form and claiming Candadian residence status?

Thanks again everyone and hope you all have a great weekend.

Before you revised your post, you mentioned about saying in CT for 4 days and 3 days in Canada. You do realized that after your accumulate 181 days in US in a single year, you are deemed a US CT resident. You will not be able to avoid paying CT taxes. This is, in my opinion, examples of some people trying to scam the system to get Citizenship is the shortest amount possible while working/living outside Canada. And you wondered why the conservatives brought in "intend to reside" clause for the citizenship process.

 

[links18]

Before you revised your post, you mentioned about saying in CT for 4 days and 3 days in Canada. You do realized that after your accumulate 181 days in US in a single year, you are deemed a US CT resident. You will not be able to avoid paying CT taxes. This is, in my opinion, examples of some people trying to scam the system to get Citizenship is the shortest amount possible while working/living outside Canada. And you wondered why the conservatives brought in "intend to reside" clause for the citizenship process.

If its legal, it can't be a scam.

 

[Natan]

Before you revised your post, you mentioned about saying in CT for 4 days and 3 days in Canada. You do realized that after your accumulate 181 days in US in a single year, you are deemed a US CT resident.You will not be able to avoid paying CT taxes.

Please refer to what I said above regarding "information" conveyed with high levels of certainty.

The U.S., like Canada, has residency statuses for many diverse purposes. There is residence status for DMV (e.g., driver's license, car registration, auto insurance); residence status for tax purposes (many jurisdictions also have non-residence status for tax purposes; some cities and counties assess their own income taxes for residents and non-residents); residence status for immigration purposes; residence status for health insurance purposes; and many other purpose-specific residence statuses.

Each state (city and county, where applicable) determines residence and non-residence (where applicable) status for tax purposes. The only way to determine your exact status for your jurisdiction(s) is to: (i) consult with a competent tax accountant certified in the state you will be working; (ii) obtain written opinions from the taxing authorities you may be subject to; or (iii) carefully review the tax code and associated regulations, enforcement advisories, and court rulings/precedents for the jurisdiction in question.

As a general guideline, if you live in the USA more than you live in Canada and/or for at least 181 days a year, you may be classified as a U.S. resident for tax purposes. This is a Federal (not State) "guideline", not an absolute rule. There are many factors that contribute to a determination of "resident for tax purposes". (For some purposes, a person who accumulates at least 30 days of presence in the U.S. in a tax year is considered a tax resident for those specific purposes.) At any rate, employee (W2) earned income in, or sourced in, the U.S. is generally subject to U.S. tax withholding and would generally make the employee a "U.S. Person for Tax Purposes".

Maintaining your Canada residence as your primary residence and place of domicile (which speaks mostly to immigration status and eligibility to apply for citizenship) is separate from being classified by the I.R.S. (U.S. equivalent of the C.R.A.) as a U.S. Person for Tax Purposes or by a state/county/city as a [non-]resident for tax purposes. (For example, I am a "tax resident" in two countries, two U.S. states, and two Canadian provinces; I am a "taxable non-resident" in three other countries. My tax status as "resident" or "non-resident" has no impact on my "immigration" status in any country.)

This is, in my opinion, examples of some people trying to scam the system to get Citizenship is the shortest amount possible while working/living outside Canada. And you wondered why the conservatives brought in "intend to reside" clause for the citizenship process.

My, aren't we holier than thou this morning. Nothing that has been discussed in this topic even remotely resembles a scam or fraud. These are all very legitimate questions pursuing a very legal course of action. I have found the cross border experience of living primarily in one country while working primarily in another richly rewarding on many levels.

 

[ImmiToCanada]

Hi screech339,

Yes, I agree that paying CT state tax is inevitable.

Due to the fact that USA has more job opportunities with generally better salaries, I think a lot of people are in a similar situation of working in the USA while seeking Canadian citizenship. The new law Bill C6 makes this activity even more feasible.

Before you revised your post, you mentioned about saying in CT for 4 days and 3 days in Canada. You do realized that after your accumulate 181 days in US in a single year, you are deemed a US CT resident. You will not be able to avoid paying CT taxes. This is, in my opinion, examples of some people trying to scam the system to get Citizenship is the shortest amount possible while working/living outside Canada. And you wondered why the conservatives brought in "intend to reside" clause for the citizenship process.

 

[Natan]

Hi screech339,

Yes, I agree that paying CT state tax is inevitable.

Due to the fact that USA has more job opportunities with generally better salaries, I think a lot of people are in a similar situation of working in the USA while seeking Canadian citizenship. The new law Bill C6 makes this activity even more feasible.

Those of us who export our labour to the USA and spend our income in Canada, benefit Canada's balance of trade.

 

[screech339]

If its legal, it can't be a scam.

Just because it will become legal, doesn't make it right.

Federal Expropriation Law allows itself to take land from you for public interests. Are you okay with federal government taking your land or your relative's land to build a high speed train or pipeline? It is all legal.

While abortion is legal, I suppose sex-selective abortion is also legal?

So quit hiding behind your "It's all legal" mantra. It's easy to say "It's all legal" until it happens to you.