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U.S. Income Taxes for Canadian Snowbirds

Maroof HS CPA Professional Corporation provides a comprehensive cross border income tax services in Canada. Write to us at Canada@MaroofHS.com or call us at 1(647)724-4308. Visit https://www.maroofhs.com/us-individual-and-business-tax/

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U.S. Income Taxes for Canadian Snowbirds

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  1. U.S. Income Taxes for Canadian Snowbirds https://www.maroofhs.com/us-individual-and-business-tax/

  2. 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.

  3. 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. MaroofHS CPA Professional Corporation provides a comprehensive cross border income tax services in Canada. Write to us at Canada@MaroofHS.com or call us at 1(647)724-4308.

  4. You can reach us at: 3-100 Hanlan Road, Woodbridge, ON L4L 4V8 Phone: (647)724-4308 Email: Canada@MaroofHS.com https://www.maroofhs.com/contact/ https://twitter.com/MaroofHS https://www.facebook.com/MaroofHSCPA

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