The U.S. government has a better idea than ever of how long you’ve been in the country, now that border officials routinely photograph your license plate and exchange information with Canadian authorities. “If you were able to bend the rules in the past, it ain’t going to fly any more,” says Terry Ritchie, a cross-border financial expert with Cardinal Point Wealth Management Inc. and co-author of The Canadian Snowbird in America (an updated edition is expected this Spring). Here are a few ways to stay in Uncle Sam’s good books.
1. Keep count: 182 days
That’s how many days you’re allowed to stay in the U.S. during a calendar year on a visitor’s visa. In fact, the Canadian Snowbird Association suggests you avoid being in the U.S. longer than 182 days in any rolling 12-month period, to avoid contravening a common interpretation of the rule. Otherwise, you could be barred from re-entering the U.S.
2. Carry a “border binder”
Keep dates and locations of all your border crossings in a file, along with copies of property tax statements, utility bills and your most recent tax return should you need to provide evidence that your permanent home is in Canada. Don’t present it unless asked.
3. File your Form 8840
You’ll need it if you live in the U.S. more than four months in a year. Otherwise you may run afoul of a complicated IRS calculation called the “substantial presence test,” which may require you to pay U.S. income tax.
4. Declare your income
Snowbirds who own U.S. property must file a U.S. tax return if they have rental income or sell a property. They should also include any gains on their Canadian return, where they’ll get a credit for any U.S. taxes paid).
5. Mind the provincial gap
It’s not just how long you’ve been out of country. Canadians must reside in their home province for at least five months of each year (six in Saskatchewan and P.E.I.; four in Newfoundland) to retain health coverage, say CSA officials.