Human snowbirds from Canada share at least one important trait with their avian counterparts: they both migrate south for the winter.
Well, some of them actually take a road trip. But, the beauty of being a snowbird is that after enjoying the warmer months in Canada,
they escape to either a rental, time-share or second home, typically in a warmer state like Florida or Arizona, to wait out the winter.
It’s easy to see why it’s an enticing idea, given that Canadian winters are brutally cold and snowy.
Canadians traveling stateside can generally enter the USA for up to six months without needing a visa.
However, just because you can stay in the country without a visa for those months, doesn’t mean the IRS won’t deem you a USA resident for tax purposes.
It might seem odd, but you can stay in the U.S. long enough to owe taxes without ever changing your immigration status to resident.
Regardless of your intent or immigration status, you are deemed a USA resident for the purposes of taxation if you meet the IRS’s Substantial Presence Test.
In order to know how many days you can stay in the U.S. before owing taxes,
you will have to determine how many days you have spent in the U.S. in the current calendar year, the previous calendar year and two calendar years ago.
Still, to avoid doing the complicated math altogether, follow this simple general rule: make sure to spend less than 121 days a year in the USA
If you’re among the unlucky Canadian snowbirds who met the Substantial Presence Test, you’re not alone.
Luckily, even if you meet the Substantial Presence Test, you have options.
According to the IRS, you could still be treated as a non-resident for tax purposes if you did not apply for permanent residence,
Having a closer connection to Canada isn’t about where you feel like home, but rather, where you can actually prove is your home.
If you find yourself in a situation where you may be deemed a U.S. resident for tax purposes, you can always turn to the Canada-U.S. Tax Treaty for help.
The treaty’s aim is to clarify how Canadians and Americans living in each other’s respective countries should be treated.
Thanks to the treaty, even if you’ve spent more than 182 days in the U.S., you may still be considered a Canadian Tax Resident and avoid double taxation.