U.S. Income Taxes for Canadian Snowbirds

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U.S. Income Taxes for Canadian Snowbirds
https//www.maroofhs.com/us-individual-and-busines
s-tax/
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• The United States uses a Substantial Presence
  Test (SPT) to determine if an individual needs to
  report its income to the IRS. When you spend so
  much time, even without undertaking any economic
  activity.
• Substantial presence test (SPT) uses a specified
  formula to determine the number of days in
  current and two preceding years.
• Add the below and if the result is equal to or
  more than 183 days, you need to file a U.S.
  income tax return.
• Total number of days in the current year 1X
• 2. Total number of days in the first preceding
  year 1/3X
• 3. Total number of days in the second preceding
  year 1/6X
• If you spend a minimum of 31 days in the current
  year and the result of the above formula is equal
  to or more than 183, you have met the SPT.
• For Canadians spending winter in the United
  States, it's very easy to meet this substantial
  presence test and become subject to U.S. income
  tax.

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Relief for Canadian Snowbirds from U.S. Taxes
If you spend less than 183 days in the current
year, you can file form 8840 with IRS and claim
an exception provided you have Canada as your tax
home. Form 8840 is known as the Closer connectin
exception for Aliens and must be filed at the
same time as the U.S. income tax return for
individuals is due. What if you are a resident
of both the U.S. and Canada at the same time?
Should you file a U.S. Income tax return, you can
read more about this cross border income tax
issues for Canadians in this post.
Covid-19 Relief Exception from Substantial
Presence Test
Due to COVID-19 related travel restrictions, the
IRS issued the Revenue procedure 2020-20. This
provides the relief by allowing to exclude a
single 60 day period between February 01, 2020,
and April 01, 2020, from the calculation. For
COVID-19 exception from the Substantial presence
test, more details can be found here. Maroof HS
CPA Professional Corporation provides a
comprehensive cross border income tax services in
Canada. Write to us at Canada_at_MaroofHS.com or
call us at 1(647)724-4308.
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