Discussion:W-2 FROM CANADA & US
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| Note that residence for NY tax purposes is unrelated to the definition of residence for U.S. income tax purposes.}} | Note that residence for NY tax purposes is unrelated to the definition of residence for U.S. income tax purposes.}} | ||
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| + | {{ForumReplyPost|UserID=LKfromCANADA|Date=15 February 2008|Text=Guya, she can't use the teacher article in the treaty unless she is on an F1 or J1 visa. Mr Barry indicated it was an H1B. I don't think the 7701 election would save money as the Canadian income inclusion would be taxed at the high rate while the foreign tax credit would be at average.}} | ||
Revision as of 23:21, 15 February 2008
Discussion Forum Index --> Advanced Tax Questions --> W-2 FROM CANADA & US
Discussion Forum Index --> Tax Questions --> W-2 FROM CANADA & US
MRBARRYTAX (talk|edits) said: | 12 February 2008 |
| New client moved to US on aug 1, 2007 and worked as a teacher thru dec. She received w-2 from her employer. Additionally, she received w-2 from Canadian employer while residing there for the first seven months of the year. She is here on a VISA H1B. Please advise as to correct filing method for Federal and NYS. thank you. | |
MRBARRYTAX (talk|edits) said: | 12 February 2008 |
| ANY FOREIGN INCOME EXPERTS OUT THERE
THANKS | |
LKfromCANADA (talk|edits) said: | 13 February 2008 |
| MR. BARRY,
Usually, we file these types of taxpayers as part-year (dual status in the U.S.) residents of each country. She would report world income to Canada until AUgust 1, 2007 and world income to U.S. for the rest of the year. In New York, she would also file as a part year resident. If she does not have 183 days in the U.S. during the year, or meet the closer connection test, she may file as a nonresident in the U.S. for 2007. | |
LKfromCANADA (talk|edits) said: | 13 February 2008 |
| MR. BARRY,
Usually, we file these types of taxpayers as part-year (dual status in the U.S.) residents of each country. She would report world income to Canada until AUgust 1, 2007 and world income to U.S. for the rest of the year. In New York, she would also file as a part year resident. If she does not have 183 days in the U.S. during the year, or meet the closer connection test, she may file as a nonresident in the U.S. for 2007. | |
Mrbarrytax (talk|edits) said: | 14 February 2008 |
| thank you for your expertise. to review .this. If Canadian income was 20,000 for 7 months and US
income was 15,000 for last five months, then I would file Canadian return (part-year) on 35,000 of income and file nonresident US form on 35,000 for part-year remaining 5 months | |
LKfromCANADA (talk|edits) said: | 14 February 2008 |
| NO, you would file the income she earned while in Canada until AUgust 1 of $20,000 on the Canadian return, then file U.S. return for earnings after August 1 ($15,000). | |
MRBARRYTAX (talk|edits) said: | 15 February 2008 |
| ASSUMING SHE IS RESDIENT ALIEN, I WAS TOLD THAT ON HER FED RETURN I MUST ITEMIZE; THAT I CANNOT TAKE STANDARD DEDUCTION. iS THAT CORRECT? | |
LKfromCANADA (talk|edits) said: | 15 February 2008 |
| You must itemize on a "dual status" return. | |
| 15 February 2008 | |
| Is there a teacher article in the treaty?
Does she have an RRSP? Have you reviewed if she could file as a NYC nonpresident? Have you reviewed if a 7701(b)(4) election would save money? | |
| 15 February 2008 | |
| Mrbarry, since she is on a temporary visa and was in NY less than half the year, it would be appropriate to file her as a nonresident for 2007. Her NY earnings are subject to NY tax, and all of her income for the entire year (including Canadian income) is taken into account in determining the rate at which her NY source income will be taxed.
NY defines a resident as a person who is either domiciled in NY, or domiciled elsewhere but who maintains a permanent place of abode and spends more than 183 days of the taxable year in NY. A place of abode, whether owned or rented, is not "permanent" if it is maintained only "during a temporary stay for the accomplishment of a particular purpose." So, if she remains in NY through all of 2008, she will continue to be a nonresident if her presence is temporary and for the purpose of accomplishing a particular purpose, such as fulfilling a contract. If her teaching job is not temporary, but open-ended, even though she is on a temporary visa she may be considered a NY resident. There are a number of cases in NY where individuals on H-1B visas were held to be residents for tax purposes. A resident is taxed on all, worldwide, income, which would include interest or dividends from Canadian accounts or payers. A nonresident is taxed only on income from NY sources. Income from intangible assets generally is considered to have its source at the residence of the owner, so interest income from a NY bank, for example, would not be NY source income to a nonresident. Also, you didn't say whether she was working in New York City, but the city income tax is not applicable to nonresidents. NYC's definition of a resident is exactly the same as the state's. Note that residence for NY tax purposes is unrelated to the definition of residence for U.S. income tax purposes. | |
LKfromCANADA (talk|edits) said: | 15 February 2008 |
| Guya, she can't use the teacher article in the treaty unless she is on an F1 or J1 visa. Mr Barry indicated it was an H1B. I don't think the 7701 election would save money as the Canadian income inclusion would be taxed at the high rate while the foreign tax credit would be at average. | |
