Canadian Snowbird Association FAQs

Transcription

1 Canadian Snwbird Assciatin FAQs The infrmatin prvided in this Canadian Snwbird Assciatin FAQs fact sheet is accurate as f the time f printing. The cntent f this fact sheet is t be used fr general infrmatin purpses nly. The Canadian Snwbird Assciatin (CSA) assumes n respnsibility fr the advice and infrmatin presented. IMMIGRATION HOW LONG CAN I STAY IN THE UNITED STATES? Fr turism purpses, Canadian citizens are permitted t spend up t a maximum f six mnths less a day (182 days) in the United States in a 12-mnth perid. The 12-mnth perid generally begins n yur admissin date t the United States and cncludes ne year later. Fr example, if yu entered the U.S. n Nvember 1 st f 2017, then Octber 31 st f 2018 wuld be yur ne year perid. The decisin t allw entry int the United States is made at the discretin f the U.S. immigratin fficer. Fr mre detailed infrmatin, see page 17 f the CSA Travel Infrmatin Guide. DO I NEED TO INCLUDE SHORT-TERM TRIPS BACK TO CANADA OR ABROAD IN MY SIX MONTH ALLOTMENT? If yu are already present in the United States and yu leave fr Canada r take a cruise utside f the United States, fr less than 30 days, and yu return t the United States, yur departure may be included in yur 182 day ttal. The U.S. Custms and Brder Prtectin fficer MAY rule, at their discretin, that yur absence was nt f sufficient duratin t stp the clck. The CSA s recmmendatin is t err n the side f cautin and t treat shrt trips back hme r abrad that are less than 30 days in duratin, as if yu never departed the United States. DOES MY CANADIAN PASSPORT NEED TO BE VALID FOR SIX MONTHS BEYOND MY DEPARTURE DATE? Fr mst travellers t the United States, passprts must be valid fr six mnths beynd their departure date. This des nt apply t Canadian citizens passprts nly need t be valid fr the duratin f their trip. Hwever, if yu will be travelling abrad, yu shuld verify passprt requirements f yur travel destinatin, as these will vary. Sme cuntries may require yu t have a passprt which is valid fr 3 r 6 mnths beynd yur departure date. WHAT DOCUMENTATION SHOULD I TRAVEL WITH TO THE UNITED STATES? Under U.S. immigratin law, there is a presumptin that every visitr visa applicant is arriving in the United States with the intent t be a permanent immigrant. It is therefre imprtant fr the traveller t vercme this presumptin bth verbally and with paper dcumentatin. The CSA recmmends that all travellers t the U.S. carry a brder binder a set f dcuments which prve yur clser ties t Canada and yur intentin t visit the U.S. n a temprary basis. Fr example, utility bills, prperty tax ntice, cpy f latest 8840 (if applicable), credit card and bank statements. Fr a mre detailed list, see page 24 f the CSA Travel Infrmatin Guide. 1

2 AM I BEING RECORDED WITH VIDEO AND AUDIO EQUIPMENT AT THE BORDER? Bth the United States and Canada have the capability t recrd yur actins and cnversatins at their respective brder crssings. This is t ensure that immigratin fficials have a recrd f yur interactin with custms fficials. In Canada, it will be clearly psted at the brder check pint that this is ccurring. CAN CUSTOMS AGENTS SEARCH MY ELECTRONIC DEVICES? Custms fficials at bth the United States and Canadian brder inspectin pints have the right t examine yur baggage and ther pssessins including devices such as laptps and smartphnes. In bth Canada and the United States, these activities may be cnducted withut a warrant. Custms fficials have been granted brad pwers f search and seizure at brder crssings due t natinal security interests. If asked, yu are required t prvide yur passwrds t the custms fficial. Failure t d s may result in the seizure f yur electrnic device and denial f entry int the United States. TAXATION WHAT IS IRS FORM 8840? DO I NEED TO FILE IT? Under the Internal Revenue Cde, Canadian and ther freign visitrs t the United States will either be treated as resident aliens r nn-resident aliens fr tax purpses. Resident aliens f the U.S. are treated similarly t U.S. citizens in that they are taxed n their wrldwide incme. If a Canadian traveller typically spends fur mnths r mre in the United States each calendar year, they may be deemed a resident alien fr tax purpses. In rder t be treated as a nn-resident alien, and avid U.S. taxatin, Canadian snwbirds need t file IRS Frm 8840 Clser Cnnectin Exceptin Statement fr Aliens annually (ne frm per persn) by June 15th.The CSA recmmends that travellers make a cpy f their 8840 Frm and include it in their brder binder as further evidence f their clser residential ties with Canada. Fr mre detailed infrmatin, see page 52 f the CSA Travel Infrmatin Guide. If yu d nt timely file Frm 8840, yu will nt be eligible t claim the clser cnnectin exceptin and may be treated as a U.S. resident. Yu will nt be penalized if yu can shw by clear and cnvincing evidence that yu tk reasnable actins t becme aware f the filing requirements and significant steps t cmply with thse requirements. ARE DAYS BACK IN CANADA OR ABROAD INCLUDED ON IRS FORM 8840? N. While shrt trips back t Canada r abrad may be included in yur six mnth alltment fr immigratin purpses, frm a tax perspective nly days f physical presence in the United States are cunted. WHAT IS IRS FORM W8-BEN? DO I NEED TO FILE IT? If yu have a bank accunt with a financial institutin in the U.S. that earns interest n depsits, then yu shuld cmplete IRS Frm W8-BEN (Certificate f Freign Status) with yur U.S. financial institutin t avid pssibly having 30% f any interest earned n yur depsits withheld and sent t the IRS. Additinally, the W8-BEN frm ensures that yu are registered as a 2

3 nn-resident f the United States with the financial institutin r credit unin. Unlike the 8840 frm that is sent directly t the IRS each year, the W8-BEN frm is kept n file by the financial institutin fr IRS audit purpses and is valid fr up t three years. WHAT HAPPENS WHEN I SELL U.S.-BASED REAL PROPERTY? If yur vacatin hme is lcated in the United States, generally a withhlding amunt f 15% f the grss sale price is payable under the Freign Investment in Real Prperty Tax Act, 1980 (FIRPTA). Hwever, there are exceptins t this 15% withhlding rule. Fr example, if the selling price f yur U.S.-based prperty is less than $300,000 USD and the purchaser r their family member has definite plans t reside at the prperty fr at least ne half f the time that the prperty is in use during each f the next tw years fllwing the sale, withhlding under FIRPTA des nt apply. In additin, the seller must reprt the sale f real prperty interests by filing a U.S. federal tax frm 1040NR (if there is a gain realized n the sale f the prperty, yu will need t pay U.S. tax). In rder t submit a U.S. tax return, yu must have an Individual Taxpayer Identificatin Number (ITIN). This number is btained by filing IRS Frm W-7. Yu will als need dcumentatin verifying yur identity t accmpany IRS Frm W-7, such as a certified true cpy f yur Canadian passprt which can be btained directly frm Passprt Canada. CAN I RENT OUT MY U.S. VACATION PROPERTY? Generally, if a Canadian resident receives rental incme frm real prperty based in the United States, he r she is subject t a nn-resident withhlding tax f 30% f the grss rental incme. In this case, the tenant r management agent has t withhld the 30% nn-resident tax frm the grss rent and send it t the Internal Revenue Service using Frm 1042 Annual Withhlding Tax Return fr U.S. Surce Incme f Freign Persn s and IRS Frm 1042-S Freign Persn s U.S. Surce Incme Subject t Withhlding. Unlike withhlding taxes n interest and dividends, this tax is nt reduced by the Canada/U.S. tax treaty. One way t pssibly avid the 30% grss withhlding tax is t file a U.S. tax return and elect t pay tax n net rental incme. Under the U.S. Internal Revenue Cde, yu can elect t treat rental incme as incme that is effectively cnnected with the cnduct f a U.S. trade r business. If yu make this electin, yu are taxed n the net incme. Yu can claim expenses related t wning and perating the rental prperty during the rental perid, including a mandatry depreciatin charge. In this case, yu may be eligible t receive a refund fr any taxes withheld, t the extent f the withhlding amunt exceeds the tax payable. If yu decide t make the electin, t avid the tenant r management agent frm making the 30% withhlding, yu must prvide the tenant r agent with IRS Frm W-8ECI Certificate f Freign Persn s Claim That Incme Is Effectively Cnnected With the Cnduct f a Trade r Business in the United States. Fr mre infrmatin n this electin, refer t IRS publicatin 519 Tax Guide fr Aliens under the sectin entitled Incme frm Real Prperty. Other issues t cnsider include determining whether assciatin r park by-laws and regulatins permit renting f units, hme insurance cverage, state incme taxes which exist in states such as Arizna and Califrnia, state sales taxes, turist develpment taxes and Canadian incme tax. 3

4 CANADIAN BENEFITS AND RESIDENCY REQUIREMENTS HOW LONG CAN I BE AWAY FROM MY PROVINCE/TERRITORY AND STILL MAINTAIN MY HEALTH BENEFITS? Frm a health cverage perspective, each prvince and territry has set ut residency requirements which residents must meet in rder t remain eligible fr cntinuus health cverage. Due t the advcacy wrk f the CSA, mst jurisdictins allw residents t be absent fr up t seven mnths r 212 days (in either a calendar year OR a 12-mnth perid). Currently, PEI and Québec are the nly prvinces which have a six mnth residency rule. Further, many prvinces als have plicies which allw travellers t extend their benefits beynd the six r seven mnths. Please refer t the CSA s Canadian Traveller s Reprt Card fr mre detailed infrmatin. HOW LONG CAN I BE OUTSIDE OF CANADA WITHOUT IMPACTING MY OLD AGE SECURITY (OAS)? There are n residency requirements relating t the cntinued payment f OAS as lng as the individual has lived in Canada fr 20 years past the age f 18. If this is nt the case, members shuld cntact Service Canada ( ). On the ther hand, the Guaranteed Incme Supplement (GIS) will be suspended if a recipient is utside f Canada fr mre than six mnths. MISCELLANEOUS QUESTIONS HOW MUCH MONEY CAN I TAKE ACROSS THE CANADA/U.S. BORDER? It is imprtant t remember that, under the anti-terrrism and mney-laundering laws f mst cuntries, including Canada and the United States, yu cannt take $10, CAD r mre (in the case f Canada) r $10,000 USD r mre (in the case f the United States) casually int r ut f a cuntry withut reprting this t bth custms services. Failure t reprt, even if yu are taking r bringing back the mney fr a legitimate reasn, culd result in it being seized. If yu are leaving r entering Canada with $10,000 CAD r mre yu must cmplete CBSA Frm E677 Crss-Brder Currency r Mnetary Instruments Reprt Individual. If yu are carrying $10,000 CAD acrss the brder fr smene else, yu must cmplete CBSA Frm E667 Crss-Brder Currency r Mnetary Instruments Reprt General. Additinally, yu must als cmplete FinCEN 105 Reprt f Internatinal Transprtatin f Currency and Mnetary Instruments and submit it t U.S. Custms and Brder Prtectin. CAN I VOLUNTEER OR WORK IN THE UNITED STATES? The Immigratin and Natinality Act (INA) establishes the types f visas available fr travel t the United States and what cnditins must be met. When Canadian snwbirds are permitted entry t the United States, they travel under a visitr visa status knwn as B-2. Under this visa classificatin, individuals may engage in the fllwing activities: turism vacatin (hliday) visit with friends r relatives 4

5 medical treatment participatin in scial events hsted by fraternal, scial, r service rganizatins participatin by amateurs in musical, sprts, r similar events r cntests, if nt being paid fr participating enrlment in a shrt recreatinal curse f study, nt fr credit tward a degree (fr example, a tw-day cking class while n vacatin) Admitted travellers are permitted t perfrm vlunteer cmmunity service prvided it truly is vlunteer such as wrking in a hspital, cmmunity recreatin centre r place f wrship. There can be n pay r cmpensatin received ther than perhaps free refreshments/meal and/r cmplimentary parking while perfrming the service. Entering the U.S. as a turist-class visitr withut a prper U.S. wrk permit des nt permit any frm f paid wrk, regardless if payment is in the frm f cash, cheque, r in cnsideratin f sme benefit which has a mnetary value. ARE MY TRAVEL MEDICAL INSURANCE PREMIUMS DEDUCTIBLE? Yes. The premiums yu pay fr supplementary travel medical insurance are tax deductible in Canada as a medical expense under line 330 f yur tax return. CAN I LEAVE MY CANADIAN VEHICLE IN THE U.S. ON A FULL-TIME BASIS? N. U.S. Federal plicy allws freign registered vehicles t be present in the United States fr up t 12 mnths; beynd this the vehicle must be fficially imprted r exit the cuntry. Further, leaving a vehicle in a freign jurisdictin may vid the aut insurance plicy. Please see page 42 f the CSA Travel Infrmatin Guide fr mre details related t the imprtatin prcess. CAN THE CSA ASSIST ME WITH ANY CROSS-BORDER LEGAL QUESTIONS I MAY HAVE? As part f yur membership in the Canadian Snwbird Assciatin, yu may cntact free f charge the CSA General Cunsel regarding crss-brder legal matters. T btain the cntact infrmatin fr the CSA General Cunsel, please cntact the CSA head ffice at

6 CONTACTS Canadian Snwbird Assciatin Tel U.S. Custms and Brder Prtectin (U.S. CBP) Tel. (202) Internal Revenue Service (IRS) Tel. (267) U.S. Citizenship and Immigratin Services (USCIS) Tel Canada Brder Services Agency English Tel French Tel Canada Revenue Agency English Tel French Tel