# Canadian Citizen (Ontario), Working in the USA - Tax question



## ECMoney (Dec 13, 2011)

Quick question about taxes, hopefully someone here has been in a similar position.
My sister is Canadian citizen, but went to school in New York for 2 years. She was living in New York and had a school visa but did not work during that time.
After she graduated, she had to complete a 9-month internship so she was given a H1-B work visa and ended up landing a full time position in January 2013.
She moved to Indiana and has been there for the past 13 months, but for the 2013 tax year does she file taxes within the USA or Canada?

Quick Summary:
1) In 2013 she did not live in Canada at all, has lived in Indiana for the entire 2013
2) In 2013 she did not work at all in Canada, has worked full-time in Indiana
3) Currently has an H1-B work visa

Should a 2013 Canadian tax return be completed? 
Hopefully someone can help point us in the right direction.
Thanks in advance,
EC


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## Zeeshanbmerchant (Jan 4, 2014)

hello

it is not that cut and dry. there are several residential ties that must be determined

1) Does she still have a house, apartment in Canada where mail is delivered
2) Does she still have Canadian IDs
3) Does she still have a Canadian bank accounts,

I suggest you read this and determine on your judgement if she is still a Canadian Citizen. 

http://www.cra-arc.gc.ca/E/pub/tg/t4131/t4131-12e.pdf

if you still have questions, fill out NR73 and ask the government. If your sister is required to file taxes in Canada, than she can use the foreign tax credit, to not be double taxed. However in that case i would think about going to an accountant, as foreign tax credits can be complicated, and often self use software doesn't handle it properly


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## Eclectic12 (Oct 20, 2010)

Zeeshanbmerchant said:


> ... I suggest you read this and determine on your judgement if she is still a Canadian Citizen.
> 
> http://www.cra-arc.gc.ca/E/pub/tg/t4131/t4131-12e.pdf ...


My understanding is that she will be a Canadian citizen, unless she renounces her citizenship.


In terms of filing a Canadian tax return, one of the questions is whether she is a non-resident for tax purposes, which means that:


> As a non-resident of Canada, you pay tax on income you receive from sources in Canada. The type of tax you pay and the requirement to file an income tax return depend on the type of income you receive.


http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html


Determining Residency Status:
http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html


Years ago when I was working in the US on a T1 visa and had house in Canada, I had to file a Canadian and US tax return (after obtaining a social security number).


The OP might want to check out the threads in this section "Tax consequences of taking a job in USA?" and "CA Citizen / US Resident Alien - Working in CA for US client, which tax forms to use?" for some insights.


Cheers

*PS*
Other potentially helpful links:
http://travel.gc.ca/travelling/living-abroad/taxation
http://www.cbc.ca/news/business/taxes/6-must-know-tax-facts-for-canadians-earning-abroad-1.1167892
http://www.serbinski.com/faq/common-questions.shtml


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## ECMoney (Dec 13, 2011)

Zeeshanbmerchant said:


> hello
> 
> it is not that cut and dry. there are several residential ties that must be determined
> 
> ...


To answer a few of your questions.
1) She does not own a house in Canada, lived with my parents while she was in Canada. Her mail is delivered to my parents house.
2) Does she still have Canadian ID's, yes....she has everything valid (Drivers License, Health Card, SIN, etc)
3) Yes she still have Canadian bank accounts and uses them regularly. She also setup a bank account in the USA though and has her direct deposit to her USA bank account. Then she transfers money between the two for debt repayments (school loan), etc.


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## ECMoney (Dec 13, 2011)

I was reading up on a few links that some provided above and it sounds like my sister is a Non-Resident and has secondary residential ties as she has a Canadian Drivers License, Passport, Insurance, Bank Account, etc.

Non-residents
You are a non-resident for tax purposes if you:
•	normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
•	do not have significant residential ties in Canada; and
•	you live outside Canada throughout the tax year; or
•	you stay in Canada for less than 183 days in the tax year.

Your tax obligations
As a non-resident of Canada, you pay tax on income you receive from sources in Canada. The type of tax you pay and the requirement to file an income tax return depend on the type of income you receive.
Generally, Canadian income received by a non-resident is subject to Part XIII tax or Part I tax.


Significant residential ties to Canada include:
•	a home in Canada;
•	a spouse or common-law partner in Canada; and
•	dependants in Canada;
Secondary residential ties that may be relevant include:
•	personal property in Canada, such as a car or furniture;
•	social ties in Canada, such as memberships in Canadian recreational or religious organizations;
•	economic ties in Canada, such as Canadian bank accounts or credit cards;
•	a Canadian driver's licence;
•	a Canadian passport; and
•	health insurance with a Canadian province or territory.


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