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Tax Implications in Canada for couples moving from US with US citizenship

CdnNurse

Newbie
Jul 21, 2020
3
0
Hi folks.

I'm new to this forum, I've been searching the forums, and reading articles I can find, but would love to hear experiences of others.

For background, I'm Canadian and have been living in the USA for the last 8.5 years. I am currently in the USA on a green card and could obtain dual citizenship at any point by now.

My husband is American and we have two kids, both are dual (have documentation).

Not to get too political but events here in the USA have heightened our discussions that it's time for us to move back to Canada.

I'm trying to ask the question - risks and benefits of returning to Canada me having dual and my husband would go through getting his canadian pr. contrasting this with me returning as a Canadian and giving up my green card (no US citizenship).

I tried asking my accountant who is very effective at his job (cross border taxes is his specialty) but he's not particularly great at the educational discussion. I understand that there are TFSA implications as well as RESP implications. And online reading is suggesting that the reverse in the USA is also complex.

I've seen others on this forum that are US-CDN couples who move from the USA to Canada so I'm wondering how did this land for you? Have you had to make these decisions?

it seems weird to ask these questions in a Canadian forum as my goal with hearing your experiences is to help me decide if I'm going to move forward with my US Naturalization or not, but as our goal is to return to Canada in the next few years, so it seemed like I'd get more relevant information from other US-CDN Couples who have moved north.

thanks!
 

canuck78

VIP Member
Jun 18, 2017
28,002
6,059
Hi folks.

I'm new to this forum, I've been searching the forums, and reading articles I can find, but would love to hear experiences of others.

For background, I'm Canadian and have been living in the USA for the last 8.5 years. I am currently in the USA on a green card and could obtain dual citizenship at any point by now.

My husband is American and we have two kids, both are dual (have documentation).

Not to get too political but events here in the USA have heightened our discussions that it's time for us to move back to Canada.

I'm trying to ask the question - risks and benefits of returning to Canada me having dual and my husband would go through getting his canadian pr. contrasting this with me returning as a Canadian and giving up my green card (no US citizenship).

I tried asking my accountant who is very effective at his job (cross border taxes is his specialty) but he's not particularly great at the educational discussion. I understand that there are TFSA implications as well as RESP implications. And online reading is suggesting that the reverse in the USA is also complex.

I've seen others on this forum that are US-CDN couples who move from the USA to Canada so I'm wondering how did this land for you? Have you had to make these decisions?

it seems weird to ask these questions in a Canadian forum as my goal with hearing your experiences is to help me decide if I'm going to move forward with my US Naturalization or not, but as our goal is to return to Canada in the next few years, so it seemed like I'd get more relevant information from other US-CDN Couples who have moved north.

thanks!
The biggesr drawback is your husband's US tax liabilities. You are fine if you give up your green card. All depends on job opportunities for the both of you in Canada. Salaries are usually lower in Canada. If you are a high income earner the tax rate can be quite a shock. All depends on your expectations and why you want to leave the US.
 

CdnNurse

Newbie
Jul 21, 2020
3
0
The biggesr drawback is your husband's US tax liabilities. You are fine if you give up your green card. All depends on job opportunities for the both of you in Canada. Salaries are usually lower in Canada. If you are a high income earner the tax rate can be quite a shock. All depends on your expectations and why you want to leave the US.
That is what I’m trying to clarify — at this point I am weighing the pros and cons with going for dual since we have enough other paperwork we are at least 2 years away before we can move. Thankfully, I’ve worked as a Nurse in BC, so am relatively dialed into to salaries, cost of living etc, jobs.

We will be dealing with US taxes, regardless, because for family reasons, giving up US citizenship is an unlikely thing for my husband.

But since posting, I’ve learned a couple of things that are keys as I research — summarized down to Twitter note sizes .

- I need to have an educational discussion with our FA to sort out education funding for our young kids. Because there are tax implications for both 529s and RESPs however we cut things.

- also if I don’t get dual then all my investment accounts need to move with me.

Anyhow, the reading continues.
 

Islander216

Champion Member
Nov 27, 2019
1,256
753
I don't know about all the intricacies of tax implications of being a dual citizen, but the most obvious drawback of you acquiring U.S citizenship is that you would now have citizenship based taxation, meaning you'd be taxable on your worldwide income even if you aren't residing in the U.S. You also would have to file a tax return and the various filing requirements for the IRS are pretty tedious.

The other implication is that the U.S and Canada have a double taxation treaty, so what you paid in Canada can be offset against your U.S tax liabilities when you file taxes in the U.S. It's a foreign tax credit.
 

canuck78

VIP Member
Jun 18, 2017
28,002
6,059
That is what I’m trying to clarify — at this point I am weighing the pros and cons with going for dual since we have enough other paperwork we are at least 2 years away before we can move. Thankfully, I’ve worked as a Nurse in BC, so am relatively dialed into to salaries, cost of living etc, jobs.

We will be dealing with US taxes, regardless, because for family reasons, giving up US citizenship is an unlikely thing for my husband.

But since posting, I’ve learned a couple of things that are keys as I research — summarized down to Twitter note sizes .

- I need to have an educational discussion with our FA to sort out education funding for our young kids. Because there are tax implications for both 529s and RESPs however we cut things.

- also if I don’t get dual then all my investment accounts need to move with me.

Anyhow, the reading continues.
You should probably meet with a good accountant who specializes in US and Canadian tax planning and set up a plan.
 

CdnNurse

Newbie
Jul 21, 2020
3
0
First of all meet with you accountant and make a plan with them.
Agreed. The first thing I did was email him (I already have one). But I got a snarky reply back. He’s good at the tax piece but educating me is not a strength of his.

I think I’ll email my financial advisor and ask. Who may also have another tax accountant who is more helpful.