Snowbird FAQs is a forum where we provide answers to some of the most common and interesting questions we receive from Snowbird Advisor members that we feel will be of interest to other members.
I’ve read in the news that a new law may allow Canadians to spend up to 8 months in the U.S. instead of 6. What is the status of this legislation?
As of early January 2020, the Canadian Snowbirds Act, which would effectively amend U.S. tax law to allow Canadians who meet certain criteria to spend 8 months in the U.S. per calendar year (instead of the current 6 month limit) has only been proposed as a bill and has not been passed into law.
We are following the status of this bill closely and will advise Snowbird Advisor members of any important developments.
In the meantime, you can learn more about the proposed Canadian Snowbirds Act here.
My husband and I have been advised that we should file a Form 8840 with the IRS to avoid paying taxes in the U.S. When do we need to file this form?
The filing deadline for IRS Form 8840 - also known as the Closer Connection Exemption - is June 15 for the previous calendar year. The form must be filed annually.
Canadian snowbirds who qualify for the exemption and file Form 8840 by the June 15th deadline can stay in the U.S. for up to 182 days without being considered a U.S. resident for tax purposes.
I’ve heard there are different rules for how long Canadians can stay in the U.S. for immigration purposes and for tax purposes. Can you explain the difference please?
You are correct, there are two different sets of rules – one for tax purposes and one for immigration purposes.
A common misconception among Canadian snowbirds is that there is only one set of rules to comply with. This misconception can lead to the misapplication of the rules, resulting in a variety of negative consequences.
Tax rules deal with how long you can stay in the U.S. before you are considered a U.S. resident for tax purposes. Violating these rules by spending too much time in the U.S. or failing to file the required forms with the IRS can lead to serious adverse tax and financial consequences. You can learn more about U.S. tax rules for Canadian snowbirds here.
Immigration rules, on the other hand, dictate how much time you can spend in the U.S. in general. Spending too much time in the United States can lead to a number of adverse consequences when trying to enter the U.S., including increased scrutiny when crossing the border, being denied entry to the U.S. on a one-time basis or even being banned from entering the U.S. You can learn more about U.S. immigration rules for Canadian snowbirds here.
It’s essential for Canadians who spend time in the U.S. to comply with both sets of rules to avoid running into issues south of the border.