Last updated: May 15 2014

Going to School or Working Temporarily in the U.S.?

If you plan to attend school or work temporarily in the U.S., you may technically be deemed a U.S. resident for tax purposes.

However, in certain circumstances you may actually still be considered a Canadian resident and a U.S. non-resident. This can be beneficial in some cases.

A foreign student in the U.S. on a student visa can work in the U.S. but usually only for the school they are attending because a student visa does not give someone the right to work in the U.S. If the employment income earned is less than $10,000, it will be exempt from federal tax in the U.S. but taxable in Canada. This exemption is for all non-residents of the U.S., not just students.

In order to work in the U.S. you need a temporary work visa and the type of visa required will depend on your professional requirements and the job you are doing. Most work visas are sponsored by the U.S. employer and have an expiry date.

You can physically spend more time in the U.S. than in Canada but still be deemed a resident of Canada instead of the U.S. for tax purposes. There are various residential ties that are used to determine a person’s residency status; however, every situation is different. If you are considered to be a U.S. resident, there may be Canadian tax ramifications that you were not counting on. Applying for a U.S. green card automatically changes your residency status.

All situations can have tax implications so it is best to plan ahead before you get into trouble.

Excerpted from Canadians & The IRS. © Knowledge Bureau, Inc. All rights reserved.