All Canadian residents who winter in the United States are technically subject to U.S. tax income if they exceed a certain number of days in a calendar year.
To this effect, there is a Presence Test that is based on the number of days you have been in the United States for the last three years.
The calculation of the “Conditions for a Closer Connection to a Foreign Country” is made according to the following rules;
Each day in the U.S. in the current calendar year counts as one day;
Each day in the U.S. in the prior year counts as one-third of a day;
Each day in the U.S. in the year before counts as one-sixth of a day.
If you spent more than 183 days in the past three years, the U.S. Tax Office will consider you a U.S. resident in the Tax Act. This will require you to report any foreign income to the U.S. even if you file a Canadian Tax Return.
To avoid unnecessary tax impositions you must complete Form 8840 “Closer Connection Exception Statement for Aliens” annually and submit to the Internal Revenue Service (IRS) prior to the deadline date of June 15th, 2019.
Our tax experts are available for any questions regarding this obligation. Please do not hesitate to contact Christine Lachapelle.