TN Visa and Tax Implications

[dazealex 0]

Hello all,

I have a job offer in the US and am contemplating accepting it. I will then be going on a TN visa to California.

Here's the situation -- my wife will be staying in Canada. We own a home in Canada, and a rental property.

1. When I move to the US on a TN visa, will I need to pay tax twice (in the US and Canada) because of our property in Canada?

2. I understand I will need to cancel my OHIP card in Ontario. How do I do this?

3. Do I also need to tell CRA about my move to the US? Is there a form to do this with? Does this need to occur before or after I move?

4. What happens to my RRSP, TFSA, and other accounts in Canada? I assume I can keep them?

5. Is the TD Cross-Border Banking product better or the RBC one? (I do have an RBC account, but it's not really useful. I do my banking with my ING Thrift Chequing account).

Please help. I'm in panic mode right now with so many things to consider.

Thanks,

daze

[NikLR 13,227]

You do not need to cancel your OHIP, just let them know you'll be out of the country. You're not immigrating to the USA, you're simply working here. I do not believe you need to pay property taxes in the USA for your home in Canada. It would be a good idea to let the CRA know you're going to be living in the USA but I don't think you necessarily have to if you are not actually immigrating. YOu can leave any and all accounts in Canada. I prefer the RBC account. I find the transfer to be free (you do pay a premium for the transfer) and you can use the US debit card in either country (either as a credit card in Canada or as both in the USA.) I do all my banking with USAA in the USA and can transfer the money between the two US accounts then between the RBC ones.

[dazealex 0]

You do not need to cancel your OHIP, just let them know you'll be out of the country. You're not immigrating to the USA, you're simply working here. I do not believe you need to pay property taxes in the USA for your home in Canada. It would be a good idea to let the CRA know you're going to be living in the USA but I don't think you necessarily have to if you are not actually immigrating. YOu can leave any and all accounts in Canada. I prefer the RBC account. I find the transfer to be free (you do pay a premium for the transfer) and you can use the US debit card in either country (either as a credit card in Canada or as both in the USA.) I do all my banking with USAA in the USA and can transfer the money between the two US accounts then between the RBC ones.

NLR, thanks for the reply. I think I will take your recommendation and open up the Cross Border RBC account. I hear it's easy to open over the phone especially since I am already a client. So that works out. For anyone curious, it costs USD $2.95/month and has unlimited transactions. Cash withdrawals are free via PNC ATMs. A credit card is also included with a debit card. 25 cheques are provided, and if delivered to a US address, they are free. Subsequent cheques are also free, as far as I understood from speaking with the agent.

I'm clear about my bank accounts in Canada. So thanks for clearing that up as well.

The only thing I am unclear about is whether I will need to file income tax in both the US and Canada. I read somewhere that because of tax treaties and double taxation, I can claim the foreign tax paid as a credit on my Canadian return (but that kind of means that I still have to pay do both returns). If you or anyone knows more about this, I'd be grateful. I will discuss this with a tax accountant too, and was wondering if you had any recommendations for who to speak with? I suppose, failing that, I could always call CRA and ask.

As for OHIP, I can call them and ask how to advise them of my work status in the US. Here's the URL for OHIP related information pertaining to working outside: http://www.health.gov.on.ca/en/public/publications/ohip/longer_absences.aspx

Gosh -- this is all so much work.

Again, NLR, thank you so much for responding. It made me feel not so alone.

daze

Edited November 9, 2013 by dazealex

[NikLR 13,227]

No worries. If you do go to the USA though, buy your own insurance. Shop around and make sure you get a something that will cover everything you need. OHIP will not cover you in the USA and it's VERY important to have insurance down here. The last thing you want to worry about is being in debt because you're in an accident or something happens or not being able to go see a doctor if you're sick.

I've never had a TN visa, I should mention that. But I do know they're a non-immigrant visa, unlike my CR1, so you're not becoming a permanent resident of the USA, you'd still be a Canadian resident. OHIP has some issues if you're out of the country for longer than 183 days per year, but I think talking to them should clear up any questions you have.

[Flames9_RN 358]

http://forums.serbinski.com/viewforum.php?f=2 better forum to ask usa/tax issues

[gwenstar 66]

Your RRSP TFSA accounts just remain in Canada - you just want to make sure that you include the earned income from those assets on your US Tax Return (or any other earned income from assets).

All this can feel totally overwhelming! but you are in a good place to ask questions and get helpful information. Just take things one at time and you will be fine

Congrats on the job offer and I wish you the best!

Edited November 12, 2013 by gwenstar

[warlord 73]

Been ages since I was on a TN Status. But like any status such as a TN or any visa like a H1 you still need to file US taxes regardless. If you make anything here you need to file taxes. If you live here and don't work you still need to file taxes. You may not owe anything, which is fine, but you are still required to file.

You will not be double taxed though between the US and Canada. I forgot what I had to do, but think I just had to report the money I made in Canada for that part of the year I had lived up there and then filed my US taxes since I had moved down here in that year.

You can keep your Retirement savings plans. In fact it's best to do so as taking out the money and trying to bring it to the US will cost you way much more than it's worth. I still have mine, though nothing has been put into them since the mid 90's when I moved away. I still maintain them and I still have to declare they exist on my tax forms to this day...

[Flames9_RN 358]

Piles of info on the forum I posted----one reports their RRSPs on form 8891 to the IRS....As well 1 has to notify the institution that is holding ur RRSP's--they sent me a short form to fill out--can't recall what form # it was though.

[dazealex 0]

Thank you everyone for so much valuable advice. The part about getting a US Chequing account and US Credit was invaluable to say that least. For reference, I went with RBC since I already had a CDN Chequing account. Remember to call the US RBC number, or the CDN RBC call centre folks will not know the specifics and may even try to sell you a different package -- I was offered a US Credit card with an annual fee.

I have tax consultation with Deloitte in the new year. They asked me to fill out 8 page long document of everything under the sun including my financial assets. I filled out what I could. The only question I have is to find a cheap accountant or maybe I'll do it myself -- is to close my inactive corporation; Even filling out nil returns is a pain in the rear side. But if I could keep it open while I am working in the states, I may elect to do that. The paper work to file the nil return is very easy. In fact, the CRA Business Inquiries folks are very helpful.

If anyone has any details on surrendering my corporation in Ontario, please do let me know which forms I need and what happens to the money in the corporation's account (there is not much there, but I am curious). I may just ask Deloitte, but if anyone just happens to know, please share.

Also, currently, I am going through a very painful process of moving my car to the US. The movers require a 'Letter of Compliance' and since it is a foreign car, there is a 2.5% duty fee. Not to mention that the car only has KM/H on the speedometer. Though, I was able to change the settings to display the speed in MPH. I don't know if that'll suffice. But I'll keep you posted so that it'll help other people.

You guys are the best! My apologies for the late reply. But I did want to thank you all. And if anyone of you is in the San Fran area (and of Canadian or other foreign origin), and want to grab a coffee or something, do let me know. The more people I can network with in the US that are of foreign origin, the better for me. I know I am going to feel very home sick, and I know it sounds silly, but I will miss the little things like Tim Hortons, and the familiarity of the Canadian way. (I won't miss the oodles of snow though...)

I am feeling very nervous about the whole thing. I just can't shake this feeling.

Question: Since it's a TN visa, I need to bring my original degrees and transcripts to the airport. While my undergrad is a not a very large one in size, my grad degree is almost twice the size and will be hard to carry. Does anyone know if there is like a padded/plastic/leather portfolio kind of thing I can use to put these things in? I don't want to crumple up my degrees obviously.

So yeah, I have to sort out the car importation situation. Please wish me luck.

Since I own a home here, my wife has elected to join me in the US later. Because our child is in school, and selling the house in the winter is a pain. So she'll sell the house, hopefully by Spring/Summer, and then join me there.

Question: Do you think it's a wise idea to check out how I will fit at the US company before I sell my house, and uproot my child from school, etc? I'd image, that I'd know how I fit there, and what the work culture is like in 2 months or so (if not sooner).

Question: As a TN visa holder, am I eligible to apply for a green card? If yes, after how long, etc? I'm just curious. Right now, I haven't even moved, but I guess I am a "planner" kind of person. I like to know ahead of time what the options are, etc. Though being of an analytic mind, I do get stuck in analysis paralysis syndrome sometimes (OK, quite often).

Edited December 19, 2013 by dazealex

[warlord 73]

Question: Since it's a TN visa,

Question: As a TN visa holder, am I eligible to apply for a green card? If yes, after how long, etc? I'm just curious. Right now, I haven't even moved, but I guess I am a "planner" kind of person. I like to know ahead of time what the options are, etc. Though being of an analytic mind, I do get stuck in analysis paralysis syndrome sometimes (OK, quite often).

No it's a TN Status and not a visa. Some border guards will give you a hard time with that if you mis state TN Visa as there is actually no such thing. Always remember to use TN Status. I had that issue myself at the Toronto airport returning back here once, the border guard was nice, but did suggest I learn the proper term for what I am on as other guards may not be as nice. Many lawyers also don't realize this and mis-say the proper terminology.

No as a TN Status you are non-eligible for permanent residency (aka Green Card). You are on a temporary permit only. The only way to become a permanent resident on a TN status is by having your company switch you over to a H1B Visa or try and apply for a GC which is kind of difficult as there are a lot of rules with that. The only other option is marrying a US citizen and going through the process that way to get your Green Card...

[Cliff&Liz 10]

I had a TN from 2012 until 2013. You have to pay taxes in the US and Canada. You get all the US tax money back after you file your US return. Don't change anything about your status in Canada. Do not cancel OHIP, but you do have to buy US insurance unless you want to fly home if you get sick or hurt. Work should provide you with details for enrolment.

[Krikit 1,164]

Also, currently, I am going through a very painful process of moving my car to the US. The movers require a 'Letter of Compliance' and since it is a foreign car, there is a 2.5% duty fee. Not to mention that the car only has KM/H on the speedometer. Though, I was able to change the settings to display the speed in MPH. I don't know if that'll suffice. But I'll keep you posted so that it'll help other people.

No duty on your car, and the odometer isn't a problem either. Plenty of threads on this topic. If you do an advanced search with my member name you'll see a ton. Will try to find a couple of links for you to get started.

[Krikit 1,164]

• Nonresidents may import a vehicle duty-free for personal use up to (1) one year if the vehicle is imported in conjunction with the owner’s arrival. Vehicles imported under this provision that do not conform to U.S. safety and emission standards must be exported within one year and may not be sold in the U.S. There is no exemption or extension of the export requirements.

http://www.cbp.gov/xp/cgov/trade/basic_trade/importing_car.xml#Documentation

Translation of the first part of that statement as it is not written clearly: It means that you have up to one year to import your vehicle duty free.

[dazealex 0]

• Nonresidents may import a vehicle duty-free for personal use up to (1) one year if the vehicle is imported in conjunction with the owner’s arrival. Vehicles imported under this provision that do not conform to U.S. safety and emission standards must be exported within one year and may not be sold in the U.S. There is no exemption or extension of the export requirements.

http://www.cbp.gov/xp/cgov/trade/basic_trade/importing_car.xml#Documentation

Translation of the first part of that statement as it is not written clearly: It means that you have up to one year to import your vehicle duty free.

Thanks Krikit. I have the 2.5% duty covered by way of the moving company. It took a little while to get them to confirm that. What a mess these relo people. One would think they know enough about Canada to US moves. But apparently not.

As a Canadian, and I have been warned, the communication style of our US brethren is quite aggressive and they always try to complicate things.

Not sure if I said that in my previous post, but the lady at the car movers said, "Oh, you need to have the speedometer changed to show MPH." I said, OK, but a GPS can do the same thing for a fraction of the cost but let me call BMW in the off chance that they'll charge <=1,000 bucks to do it. But no, they want to charge $2000+HST. Ridiculous. In fact, the service department guy told me ought right that since your car is pretty old ('06 model), it's not worth getting it done at least in Canada. Wait till you get to the US and get it done there. So I do appreciate the honesty.

So there is a setting in the car that converts the units to MPH or KPH realtime. I took a picture of it, and said, here you go. No need to do anything.

She said, "Oh that's great news. This should be fine." Later that same day, she emails me back and says, "No, this is not sufficient. Until you get the complacence letter from BMW, digital speedometer may or may not be acceptable." And I thinking, what's wrong with you? Why did you confirm that it'll be alright, and then flip flop? What exactly is the Letter of Compliance doing to tell you that will change your mind and accept the digital speedo/odo? In fact, I spoke to BMW, and they told me over the phone what the letter will say (including it below for the benefit for folks in my situation):

"This letter confirms that, according to our records, the above-referenced vehicle met all the US federal emission (including California) and safety standards that were in effect at the time of manufacture with the exception of the speedometer/odometer which was not graduated in US miles.

Please be advised that any maintenance programs offered by BMW Canada Inf. through it dealership network are not transferable or valid in the US. To the extend applicable, only the published US warranties will be honoured in the US.

There are no outstanding recalls on the vehicle at this time."

I'm hoping the above verbiage would be acceptable by the movers. But the only thing I really want to know, and that I can probably only find out by calling CBP, is where does it say that the speedometer MUST be in MPH? I understand safety concerns, but converting from KPH to MPH is not rocket science. Even I can easily multiply by 0.6 to arrive at MPH, not to mention that the car shows the real time speed in KPH or MPH anyway. (Let alone getting a GPS that will do the same.) I feel like I'm being taken for ride by these idiotic movers.

I need to vent some more -- I mentioned to the lady that lots of cars only have digital speedometers. So if mine has analog in KPH, and MPH in digital -- then what's the big deal? To that argument, I was told that every make and model was different, etc. But then, what models are covered??? Sheesh. It would've been a lot easier to move the car myself, except that the drive to California would be excessive and dangerous during this time of yer.

Bottom line, any ideas if I can find verbiage or something official that I can relay to the movers that their insistence on MPH in along has no basis in customs law?

Thanks guys for all the support so far.

daze

Edited December 22, 2013 by dazealex

[dazealex 0]

I had a TN from 2012 until 2013. You have to pay taxes in the US and Canada. You get all the US tax money back after you file your US return. Don't change anything about your status in Canada. Do not cancel OHIP, but you do have to buy US insurance unless you want to fly home if you get sick or hurt. Work should provide you with details for enrolment.

But there is this law, that if you're out of the country for more than 153 days (if memory serves me right), you must cancel your OHIP card. However, in practice, I'm not moving to the US permanently, and I know of at least one person who never cancelled her OHIP card. The relevant portion of the information states:

"To be eligible for continuous OHIP coverage during one of these absences, you must first meet certain physical presence requirements. You must be physically present in Ontario for at least 153 days in each of the 2 consecutive years immediately before the absence."

Source: http://www.health.gov.on.ca/en/public/publications/ohip/longer_absences.aspx

Thanks, for now, I'm not going to change my status as you mentioned -- and the above excerpt states quite clearly that as long as I have been physically present in Ontarion, I will have OHIP coverage. Yay!!!

I will have health insurance in the US. How good? Well, we'll find out. There is the whole in-network doctors, and HMOs that you have to worry about. Guess we'll see how that goes. I'll try to update my experience here in the hopes that it serve as a basis for others on TN Status to know what to expect.

daze

Edited December 22, 2013 by dazealex