US tax for TN status Holders

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122 viewsFebruary 3, 2025

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Anonymous Posted January 31, 2025

Hi.

Both myself and my wife just recently moved to US (TN status) in June 2024. We still worked in Canada until we resigned prior to our move. This will be our 1st filing in the US and we are really confused on how to file taxes on both countries. We are not sure if we are considered US residents as we have stayed here for more than 30 days for the tax year of 2024 and if we have to file our taxes here in US as a resident only for tax purposes. I am not sure if we have to include our US tax declaration when filing our Canadian taxes with CRA. We do appreciate your input. Thanks

1 Answer

score 0 · Answer 1 · 2025-02-03T20:21:51+00:00

Hi Ron,

The first step is to determine if you and your wife meet the US Substantial Presence Test (SPT). If you meet the US SPT, you will be treated as resident aliens for tax purposes and must file a dual-status return with the IRS. If you do not meet the US SPT requirement, you will be treated as a non-resident alien of the US and must file a US 1040 non-resident tax return with the IRS.

The next step is to determine your residency status in Canada. If you severed your primary ties to Canada, and do not intend to return to Canada, then you can be treated as a non-resident of Canada. Non-residents of Canada do not pay income tax on US income.

However, if you intend to return to Canada in the near future or you have maintained significant residential ties to Canada, then you will be treated as a Canadian tax resident. Tax residents of Canada must pay tax to the CRA on their global income. To avoid double taxation, claim a foreign tax credit for the US federal and state taxes paid, including medicare and social security taxes. The foreign tax credit reduces your Canadian taxes payable.

US tax for TN status Holders

1 Answer

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