CBC News article on the subject
Canadian snowbirds: Rules you need to know (25 Jan 2015, updated 6 Mar 2017)
What you need to know about visas, taxation, insurance
before taking a long U.S. vacation.
There could soon be changes to the rules that affect
U.S.- bound Canadian snowbirds.
A Canada-U.S. agreement is in the works to share
information on who's entering each respective country, and when, for example.
The Entry Exit Initiative already covers non-citizens of the two countries, but
the plan to start covering citizens as well has been delayed.
Once that's in effect, the U.S. government will be able
to easily check whether snowbirds overstay their welcome.
The Canada Border Services Agency cautions that
legislative and regulatory changes need to happen before that can be implemented,
and says it will provide additional information about the timing "in due
course."
There have also been initiatives in Congress over the
last few years to extend the time some Canadians can spend in the U.S. While those proposals are still being debated by American
legislators, Canadian snowbirds continue to head to the U.S. in droves under
the current rules, which have been in place for some time.
Snowbirds (55 yrs or older) may soon be allowed 8 months in U.S., but could
risk provincial health benefits.
Here's a short checklist for snowbirds about the rules on visas, taxation, insurance, and so on.
How long can Canadians stay in the U.S.?
· Usually a maximum of 182 days, or about six
months during a 12-month period. Those days can be amassed during one trip or
they could be the sum of several trips.
People from countries other than Canada are allowed to
stay a maximum of 90 days.
How long can a Canadian stay in the U.S. without paying
U.S. taxes?
· The American Internal Revenue Service has a
complicated way of determining this, and a form that may let snowbirds off the
hook.
· Complete the form and you can spend the full 182
days in the U.S. without paying U.S. income tax.
If you want to follow the formula, called the "substantial presence test," here
is how to do the calculation.
· The test determines whether you have been in the
U.S. long enough to be considered a U.S. resident for tax purposes. The IRS
determines this by using an unusual formula that calculates the total number of
'days' you have spent in the U.S. over a three-year span, and that number must
add up to 183 or more.
They calculate the sum as follows:
·
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 that
counts as one-sixth of a day.
·
If the sum of those three numbers totals 183 or
more, the IRS may insist you file a U.S. tax return.
When the IRS explains the test on their website, they
give an example of someone staying 120 days each year for three years, which
would total 180 (by adding 120; 120 divided by 3; plus 120 divided by 6) and
mean they are not considered a resident.
Here's another example. If a snowbird spent 180 days in
the U.S. in both 2014 and 2013, they should limit their U.S. time to 92 days in
2015 to avoid being classified as a U.S. resident by the IRS.
There are exemptions available for students, teachers and
diplomats, and for someone who is unable to leave because they develop a
medical condition while in the U.S., but for serious snowbirds, the best
strategy for maintaining non-resident status is filing out that IRS form, the
"Closer Connection Exception
Statement for Aliens," better known to snowbirds as Form 8840.
Snowbirds establish their closer connection to Canada through
things like having a permanent home, personal belongings, affiliations, family,
business, driver's licence and having voted in Canada.
·
The form needs to be filed with the IRS every
year snowbirds spend time in the U.S.
How long can snowbirds be away from Canada and keep their
provincial health insurance?
· B.C., Alberta, Saskatchewan, Manitoba, Northwest
Territories, Ontario, New Brunswick and Nova Scotia require
at least five months of residence in
the province to continue health insurance coverage.
· Quebec and Prince Edward Island require six
months' residency, but Quebec does not count trips of less than 21 days as
non-residency. Newfoundland and Labrador requires only four months. Nunavut and
the Yukon have no residency requirements.
Some provinces will allow
longer absences under some circumstances or if a written request made by the
resident is approved.
To get provincial health
benefits back after losing them usually requires living in the province for
three months, at which point coverage begins again.
What are the rules for snowbirds buying supplemental
travel health insurance?
·
That depends on the policy they buy. CBC News
has had many horror stories about Canadians who needed medical treatment in the
U.S.
How can snowbirds maintain their home insurance coverage
in Canada while they are away?
·
That also depends on the individual policy, but
in general, most require extra measures by a resident away for a long trip.
If no one is living in the house after the snowbirds fly
away, some insurers require someone (a family member or acquaintance) to
regularly do a walk-through or check the property.
What happened to the proposal to extend the limit for
some Canadians to 240 days?
·
At least twice in recent years, legislation has
been introduced in the U.S. Congress, but not passed, to extend the
length-of-stay limit to 240 days for Canadian citizens over 50 years old and
their spouses.
However, that proposal is now caught up in the debate
over U.S. immigration laws. Now that the White House is bypassing Congress on
the issue, and using executive orders, Canadian snowbirds shouldn't hold their
breath.
Checklists for snowbirds
Checklists for snowbirds about what to do around their
home, with their personal finances, for example, abound on the web. Two of the
most detailed publications are available free on the Canadian Snowbirds
Association website.
The CSA Travellers' Checklist: http://www.snowbirds.org/CSADownloads/csa_travellers_checklist_en.pdf
CSA
Travel Information Guide:
Comments
Post a Comment