We are very pleased to share that Matt Altro and David Altro were asked to prepare a special for The Globe and Mail, which was published on June 14, 2018. Their article titled “Snowbirds be warned: Spending too much time in the U.S. can trigger double tax” provides insight into the importance of filing Form 8840. The article reviews how spending too much time in the US can trigger US tax and discusses the Substantial Presence Test, the June 15 filing deadline for Form 8840 and the option of exiting Canada for tax purposes.
To read the article you can see it in part below, or click here to view it on The Globe and Mail’s website.
Snowbirds be warned: Spending too much time in the U.S. can trigger double tax
Matt Altro and David Altro
The Globe and Mail
June 14, 2018
We all know that if you spend too much time in the sun, you can get burned. Snowbirds spending time in the U.S. Sunbelt face an additional threat that no amount of sunscreen can protect them from – the IRS.
That’s because Canadian snowbirds who spend winters in the United States may find that they are subject to tax by the Internal Revenue Service on their worldwide income. It is important to understand the U.S. tax rules – and the actions snowbirds need to take to avoid being taxed south of the border.
THE SUBSTANTIAL PRESENCE TEST
The common understanding is that a snowbird can spend up to 182 days in the United States each calendar year without any tax consequences. Unfortunately, that isn’t true. The U.S. income tax code says an individual is subject to U.S. tax on their worldwide income if they meet what is known as the Substantial Presence Test (SPT).