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| *Ostroff, Fair and Company>>>Canada Taxes |
If a Candian works in the U.S. and pays U.S. taxes on the income, does he still need to pay Canadian taxes? |
If a Candian works in the U.S. and pays U.S. taxes on the income, does he still need to pay Canadian taxes? OK, this question does have a relatively simple answer, but not that simple. It boils to to whether or not you are deemed to be a Canadian resident for the year in question. I assume that since you filed US taxes that you were deemed to be a US resident. Residency is primarily based on a "183 day rule" test - basically if you lived in the given country for 183 days or longer, then you were a resident of that country. It gets a little more complicated than that, such as if you lived outside of the country, but you left you family back in Canada, or still owned a house in Canada, or your belongings were stored there, or you kept your Canadian driver's license, or bank accounts, or even if you were not intending on making the US your new permanent home - you could still be deemed as a Canadian resident even if you lived outside of the country for more than 183 days. There is no hard and fast rule, but you are best to get a ruling from the Canadian tax folks as to whether or not you would be deemed to be a Canadian resident. The only reason that you would have to file Canadian taxes as well would be if you lived in Canada for more than 183 days, OR Canada Customs and Revenue Agency has deemed you to be a resident (for some of the aforementioned reasons), then yes, you would have to file and pay Canadian taxes as well. The good news is that the US and Canadian tax folks have a tax treaty to avoid double taxation. Each country allows a "foreign tax credit" to approximately account for the tax paid in the other country. It doesn't quite work perfectly, and you end up paying slightly more than the higher of the two taxes in the end. In short, you may want to talk to a Canadian accountant about your situation and get it straightened up as quickly as possible. Also remember that both countries require you to claim your WORLDWIDE income on the tax return, not just the money earned in that country. As an aside, oddly enough, US citizens have to file US taxes even if they never step foot in the US again in their lives. The US is one of two countries in the world that bases income tax on citizenship as well as residency. Source(s): I am Canadian and lived in the US for four years. Been there, done that. no .....It would not be right .. It comes down to where you live. If you are no longer a resident of Canada, then no, you don't pay Canadian taxes. |
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