# US citizen working in US living in Canada



## heropuppy

Ok, this is complicated.
Landed in Canada jan 2011, but will be working in US til April 2012.
Husband working in Canada, also PR. Guatemalan citizen.
I know he's gotta do Canadian taxes. But do I?
I haven't earned a dime in Canada yet, all of my income is US.
I'll file US income taxes as always.
But do I file Canadian as well?
Should we file jointly?
Please advise.


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## pwdunn

heropuppy said:


> Ok, this is complicated.
> Landed in Canada jan 2011, but will be working in US til April 2012.
> Husband working in Canada, also PR. Guatemalan citizen.
> I know he's gotta do Canadian taxes. But do I?
> I haven't earned a dime in Canada yet, all of my income is US.
> I'll file US income taxes as always.
> But do I file Canadian as well?
> Should we file jointly?
> Please advise.


Hi: there is no joint filing in Canada. You are treated as individuals here.


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## heropuppy

So do I file even though I made no money in Canada?


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## Bevdeforges

If you are resident in Canada, you should be filing Canadian taxes. But, as a US citizen (and if your husband holds a green card for the US) you'll also have to file US taxes. It's probably advantageous to file jointly if you both have to file in the US.

Talk to your payroll department. If the company is located close enough to the border for you to commute from Canada, you're probably not the first, nor the only cross-border employee they've ever had.
Cheers,
Bev


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## Guest

Bevdeforges said:


> If you are resident in Canada, you should be filing Canadian taxes.


Wrong, in this case. She has no Canadian income, only US income.

Canada does not tax "world income" as does the US, which afaik is the only country that does that.

You don't file tax returns in Canada if you live in Canada but have no Canadian income. Go to any Canada Post outlet in the country, get the tax forms and booklet from them (they always have them in stock at Canada Post, go to the General Information>Before You Start>Do you have to file a return? section at the front and read what it says. (Unlike the IRS, CRA employs trained editors whose job it is to make tax forms and instructions readable by people other than tax lawyers and accountants, and the writing actually is comprehensible to most people.) There may be circumstances in which you might want to file, for certain tax benefits available even if you have no Canadian income, and those are all listed and clearly described in that same section of the instructions.

The first bullet on that section of the directions say you have to file a return if "you have to pay tax for 2010." If you have no Canadian income, you have nothing to pay, and there is no reason to file unless you want to derive certain benefits or refunds listed near the bottom of the section.

If in any doubt, just call Canada Revenue Agency. Unlike IRS employees, CRA employees (once you get through the annoying auotmated answering system to a live human) actually try to help you and will cheerfully answer questions or refer you to documents or put you on hold while they try to find out, or pass you up the line to someone who knows.

Or just ask anyone who lives in Canada and who has filed taxes here, they would likely have told you what I just told you.:ranger:


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## Bevdeforges

That's bizarre - most countries these days tax based on residence. Though I suppose living next to the big "tax bully on the block" would change things. (Oddly enough, the ACA and other expat organizations only wish that they could convince the US to tax based on residence "like everyone else.")

Here in Europe, you normally pay your taxes where you are resident - on the theory, I suppose, that that's where you get your medical and other social insurances. But it raises the question of whether the heropuppy would be eligible for Canadian health coverage, assuming that she is paying US taxes only.
Cheers,
Bev


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## Guest

Bevdeforges said:


> That's bizarre - most countries these days tax based on residence. Though I suppose living next to the big "tax bully on the block" would change things. (Oddly enough, the ACA and other expat organizations only wish that they could convince the US to tax based on residence "like everyone else.")
> 
> Here in Europe, you normally pay your taxes where you are resident - on the theory, I suppose, that that's where you get your medical and other social insurances. But it raises the question of whether the heropuppy would be eligible for Canadian health coverage, assuming that she is paying US taxes only.
> Cheers,
> Bev


Yes in Canada you pay taxes based on residence -- IF YOU HAVE CANADIAN INCOME or if you need access to Canadian benefits. If you have no Canadian income to report, you don't have to file -- as far as I know a Canadian resident who has only US income has no reason to report that income in Canada, only to the IRS.

But as I say, if in any doubt, talk to CRA don't take my word for any of this, or Bev's. Neither of us is a CRA employee.

BTW Canadian health care premiums, if any, are paid for in your provincial tax (at least in Ontario) which is part of your CRA return, but the premium is income-tested, and if your taxable income is under $20K you pay nothing for health care. If in doubt on eligibility for health care, contact the health insurance administrator in your province (not any federal agency) and ask if you're eligible.

With all respect to Bev's excellent moderation, if you want advice on Canadian taxes or Canadian health care and for whatever reason don't want to ask for advice from an actual employee of the Canadian department that administers these things, and insist on relying on advice from other people, pick someone who lives in Canada and ask them, not someone who doesn't live in Canada. (BTW I used to work for Health Canada -- for 18 years -- have benefitted from public health care in Ontario since 1969, and I do have some knowledge of the Canadian health care system, how it's funded, and what requirements are for it. But I've been retired a while, hence my suggestion to call someone at OHIP or whatever Ontario now calls the health administrator and ask them.)


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## Peg

I thought that all Canadian residents must file a tax return and pay income tax on their worldwide income.

The difference with the US is that all US citizens must file tax returns regardless of residency.


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## heropuppy

I have enough days for ohip, btw.
So should I file regardless?
Just don't want to screw it up. 
Thanks for all your insight. I will call the Canadian IRS to double check.
I'll let you know what they say.


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## Peg

heropuppy said:


> I will call the Canadian IRS to double check.


Ouch... that is a nasty thing to call the Canada Revenue Agency. :canada:

I am curious to hear what their response is because out of curiousity I searched online about a resident with only non-Canadian income but could not find the information.


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## Ladyhawk

Peg said:


> Ouch... that is a nasty thing to call the Canada Revenue Agency. :canada:
> 
> I am curious to hear what their response is because out of curiousity I searched online about a resident with only non-Canadian income but could not find the information.


According to Wikipedia: "Canadian residents and corporations pay income taxes based on their world-wide income. Canadians are protected against double taxation receiving income from certain countries which gave agreements with Canada through the foreign tax credit, which allows taxpayers to deduct from their Canadian income tax otherwise payable from the income tax paid in other countries. A citizen who is currently not a resident of Canada may petition the CRA to change her or his status so that income from outside Canada is not taxed."


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## pwdunn

*Actual we refer to him as "the taxman"*



Peg said:


> Ouch... that is a nasty thing to call the Canada Revenue Agency. :canada:


See about 1 minute 35 seconds in:


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## Bevdeforges

heropuppy said:


> I have enough days for ohip, btw.
> So should I file regardless?
> Just don't want to screw it up.
> Thanks for all your insight. I will call the Canadian IRS to double check.
> I'll let you know what they say.


If you're resident in Canada for the full year, you should be able to take the foreign earned income exclusion on your US taxes - and probably shouldn't be paying US social security at all. 

Do let us know what the Canadian tax folks say about your situation.
Cheers,
Bev


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## Guest

heropuppy said:


> Ok, this is complicated.
> Landed in Canada jan 2011, but will be working in US til April 2012.
> Husband working in Canada, also PR. Guatemalan citizen.
> I know he's gotta do Canadian taxes. But do I?
> I haven't earned a dime in Canada yet, all of my income is US.
> I'll file US income taxes as always.
> But do I file Canadian as well?
> Should we file jointly?
> Please advise.


Hi,

I am a Canadian PR (30+ yrs)/citizen-in-waiting and have filed Cdn. taxes for both myself & my purely Cdn. spouse for many, many years. My experience has been that "world income" must be reported in Canada as long as you are a Canadian resident. 

Here is a link to the CRA (Canadian Revenue Agency) that spells out that requirement, especially for newcomers. Important are the sections on Residency and Tax Obligations. 

Newcomers to Canada (immigrants)

Regarding Tax Obligations, it states:

_As a resident of Canada, you:

•must report "world income" (income from all sources both inside and outside Canada) on your Canadian income tax return;_

Bevdeforges is extremely knowledgeable about many aspects of global taxation and provides some of the best information (or ways to get information). Read her posts thoroughly. Her insights helped me tremendously. Also, the CRA will be very helpful. I've even talked to them regarding the current U.S. taxation of Cdn. citizens/PR's and they seem both knowledgeable and sympathetic. On the other hand, I know people who have had difficulties with the CRA and find them not helpful and heavy-handed, so there you go!

Good luck!!


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## Vangrrl

If you are a resident in Canada, you file a Cdn tax return and report your US income and receive a credit for the taxes paid to the US. Unfortunately there is a good chance that you will end up owing since taxes are higher here. 

I lived in the US for a year, and got a hefty refund from the IRS, and then ended up paying it all and then some more to the CRA.  Oh well, at least we get something for our taxes here.


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## ccrrents

Schubert said:


> Wrong, in this case. She has no Canadian income, only US income.
> 
> Canada does not tax "world income" as does the US, which afaik is the only country that does that.
> 
> You don't file tax returns in Canada if you live in Canada but have no Canadian income. Go to any Canada Post outlet in the country, get the tax forms and booklet from them (they always have them in stock at Canada Post, go to the General Information>Before You Start>Do you have to file a return? section at the front and read what it says. (Unlike the IRS, CRA employs trained editors whose job it is to make tax forms and instructions readable by people other than tax lawyers and accountants, and the writing actually is comprehensible to most people.) There may be circumstances in which you might want to file, for certain tax benefits available even if you have no Canadian income, and those are all listed and clearly described in that same section of the instructions.
> 
> The first bullet on that section of the directions say you have to file a return if "you have to pay tax for 2010." If you have no Canadian income, you have nothing to pay, and there is no reason to file unless you want to derive certain benefits or refunds listed near the bottom of the section.
> 
> If in any doubt, just call Canada Revenue Agency. Unlike IRS employees, CRA employees (once you get through the annoying auotmated answering system to a live human) actually try to help you and will cheerfully answer questions or refer you to documents or put you on hold while they try to find out, or pass you up the line to someone who knows.
> 
> Or just ask anyone who lives in Canada and who has filed taxes here, they would likely have told you what I just told you.:ranger:


Sorry, but this is VERY incorrect.

From personal experience, living in Canada but working in US tax returns are required on both sides of border.

You are resident in Canada, must pay taxes on all world-wide income. Working in US, must pay taxes as non-resident. There likely refund in US to pay Canada tax.

Cheers


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## Guest

ccrrents said:


> Sorry, but this is VERY incorrect.
> 
> From personal experience, living in Canada but working in US tax returns are required on both sides of border.
> 
> You are resident in Canada, must pay taxes on all world-wide income. Working in US, must pay taxes as non-resident. There likely refund in US to pay Canada tax.
> 
> Cheers


Sorry, my mistake, you're right. I was confusing the fact that Canada doesn't tax Canadians living outside of Canada who have no Canadian income ... unlike the US which does tax US citizens living outside the US and who have no US income.

I've never been in a situation where I've lived in one country and had 'worldwide' income in another country, so my personal experience on this is very limited.

Apologies all around for my mistake.


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