Student Loans

[BananaButton5 175]

My Beneficiary from Canada has student loans. He is in deferment until May 2019. Since I'm in the US I don't know how Canadian student loans work and he seems a bit confused as well. He won't even have an income until AOS and everything else comes through probably end of the year 2019. Does anyone have any insight on how his moving to the US will impact the repayment of his student loans? 

[NikLR 13,220]

He will have to continue making payments.  He can apply for interest relief since he wont be working. 

 

[BananaButton5 175]

Just now, NikLR said:

He will have to continue making payments.  He can apply for interest relief since he wont be working. 

 

My understanding is that he wouldn't be eligible for interest relief if he's considered a non-resident, yet he would still need to maintain a Canadian bank account to pay on his loans.  I know the CRA determines residency based on what ties he has remaining. There's still a lot of research I need to do. I'm not sure if he will be considered a non-resident yet or not. He will have the loans as well as a trust fund that keeps him technically "tied" to Canada, so I'm thinking he won't be considered a non-resident. I know that if we don't do his exit taxes correctly there could be a pretty steep tax liability and we're trying to avoid any mistakes. I'm beginning to think consulting a tax lawyer might be necessary. Coincidentally I am a US tax paralegal, but Canadian law is totally lost on me. 

[Ontarkie 13,979]

He won't be eligible for interest relief or any other perks residents get once he moves. They start considering him a non resident the day he immigrates to the US. 

[BananaButton5 175]

2 minutes ago, Ontarkie said:

He won't be eligible for interest relief or any other perks residents get once he moves. They start considering him a non resident the day he immigrates to the US. 

I keep getting mixed information on the internet about this. It seems like there are instances where the CRA still considers an emigrant a "factual" resident. 

[Ontarkie 13,979]

That is what they did to me. I called to continue my interest relief and they told me it is only for Canadian residents. They follow the same rules for other resident only benefit. Like child tax credit and GST. They day you cross the border to endorse the visa is the day they go by. 

[BananaButton5 175]

Just now, Ontarkie said:

That is what they did to me. I called to continue my interest relief and they told me it is only for Canadian residents. They follow the same rules for other resident only benefit. Like child tax credit and GST. They day you cross the border to endorse the visa is the day they go by. 

Is there still a way for him to pay his loan based on income or will he have to pay a sum that they determine otherwise? 

[Ontarkie 13,979]

He might be able to go by what his income is. I set mine up before i married so they couldn't count my fiance's income, but I can't remember what they determined the payments by. It's been 10 yrs that I've been here and I didn't have much left to mine. 

 

 

Edited July 27, 2018 by Ontarkie

[BananaButton5 175]

7 minutes ago, Ontarkie said:

He might be able to go by what his income is. I set mine up before i married so they couldn't count my fiance's income, but I can't remember what they determined the payments by. It's been 10 yrs that I've been here and I didn't have much left to mine. 

 

 

He has quite a lot left unfortunately. I don't think we will be able to set it up before we're married because his deferment won't even be over until after we're married. So then I guess they will be able to base it off my income...bummer. 

[NikLR 13,220]

48 minutes ago, BananaButton5 said:

My understanding is that he wouldn't be eligible for interest relief if he's considered a non-resident, yet he would still need to maintain a Canadian bank account to pay on his loans.  I know the CRA determines residency based on what ties he has remaining. There's still a lot of research I need to do. I'm not sure if he will be considered a non-resident yet or not. He will have the loans as well as a trust fund that keeps him technically "tied" to Canada, so I'm thinking he won't be considered a non-resident. I know that if we don't do his exit taxes correctly there could be a pretty steep tax liability and we're trying to avoid any mistakes. I'm beginning to think consulting a tax lawyer might be necessary. Coincidentally I am a US tax paralegal, but Canadian law is totally lost on me. 

 

41 minutes ago, Ontarkie said:

He won't be eligible for interest relief or any other perks residents get once he moves. They start considering him a non resident the day he immigrates to the US. 

Sorry I wasn't aware interest relief was a resident only perk, it's been a long time since I had a student loan!

 

As for the Canadian bank account thing, I still have two.  One is tied to my mother so I can't close it, but the other is tied to my US bank account so if I"m visiting or family needs money I can transfer it over, then email it to them.  RBC and TD do cross border accounts. 

 

[acidrain 325]

On 7/27/2018 at 2:31 PM, Ontarkie said:

That is what they did to me. I called to continue my interest relief and they told me it is only for Canadian residents. They follow the same rules for other resident only benefit. Like child tax credit and GST. They day you cross the border to endorse the visa is the day they go by. 

Yep. Just went through this with Canada Revenue Agency last week. I had to pay back all GST and Child Tax Credit payments to when I entered the US. I think they gave me the month I moved as a gravy payment but that was it.

 

With all the border sharing it's pretty easy to get caught if you aren't upfront. It might be worth calling and finding out for sure.

[Lemonslice 4,628]

On 27/07/2018 at 5:45 PM, BananaButton5 said:

He has quite a lot left unfortunately. I don't think we will be able to set it up before we're married because his deferment won't even be over until after we're married. So then I guess they will be able to base it off my income...bummer. 

He might be better setting up his repayment plan before getting married, even if it means starting paying a bit sooner.

[BananaButton5 175]

27 minutes ago, acidrain said:

Yep. Just went through this with Canada Revenue Agency last week. I had to pay back all GST and Child Tax Credit payments to when I entered the US. I think they gave me the month I moved as a gravy payment but that was it.

 

With all the border sharing it's pretty easy to get caught if you aren't upfront. It might be worth calling and finding out for sure.

What are GST and Child Tax Credits? 

[Lemonslice 4,628]

23 minutes ago, BananaButton5 said:

What are GST and Child Tax Credits? 

Your Canadian fiancé should be able to explain, and know, if he is getting those.

[BananaButton5 175]

On 7/28/2018 at 8:57 PM, acidrain said:

Yep. Just went through this with Canada Revenue Agency last week. I had to pay back all GST and Child Tax Credit payments to when I entered the US. I think they gave me the month I moved as a gravy payment but that was it.

 

With all the border sharing it's pretty easy to get caught if you aren't upfront. It might be worth calling and finding out for sure.

So he does receive GST. So you're saying he will have to pay back the entire prior year of GST payments?? I'm so confused and he doesn't seem to totally understand it either. If he just waits to move here until January would he be fine?