What are the Rules for Canadian Snowbirds?

Posted by Serena Kolida on Tuesday, February 10th, 2015 at 11:37am.

Airplane - Image Credit: https://www.flickr.com/photos/epsos/7928294800

Many retirees and others that call Canada home become snowbirds. However, they have specific rules they must follow when it comes to the tax liability.

It's fully legal for a Canadian resident to spend six months less one day in the United States. However, it could have an impact on your taxes.

An article fond on the CBC News' British Columbia website stated that Canadians are only allowed to spend 120 days in the United State out of every year. However, this statement was quickly clarified by the Canadian Snowbird Association.

Under the current policy, Canadian citizens eligible for travel can spend up to six months less one day in the United States per year. However, those spending more than four months in the United States may be deemed as resident aliens when it comes to taxes. If a snowbird wants to be considered a non-resident alien, they will need to file the IRS Form 8840 to claim a "closer connection" to Canada.

Entry/Exit Initiative

The same article on CBC News also talked about the Entry/Exit Initiative. This is a bi-national border program that will allow individuals traveling between the United States and Canada to have their data stored and shared. It was scheduled to be expanded in June of 2014, but has yet to be implements. Presently, the Entry/Exit Initiative isn't fully operational.

What's This all Mean?

Those looking to own property in both Canada and the United States are allowed to do so. However, it's important to understand how long you can stay in the United States every year without it becoming a tax liability.

Many Canadians head south for the winter to enjoy the weather in destinations, such as Georgia, Florida and even California. If this is your plan, make sure you understand what the rules and regulations are, along with how it may affect your taxes.

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