Canadians who spend extended periods of time in the United States should familiarize themselves with the Entry Exit Initiative, a new information-sharing agreement between Canada and the US, which allows officials to track how many days Canadians spend in the US.
BC Southern Interior MP, Alex Atamanenko, is warning Canadians that if they are not careful they could risk losing their Canadian residency and healthcare and be considered a US resident, subject to paying taxes on their worldwide income. Further, they could be deemed to be illegally in the US and face being banned from the country for three to 10 years.
While there have been no changes to either US tax or residency regulations, the updated Entry Exit Initiative does allow officials to record exit and re-entry dates. Previously, only entry dates could be tracked by the US.
Canadians who spend more 120 days in the US per year must file a special form with the IRS to establish their residency connection to Canada. If this form is filed each year by June 15th, a person may remain in the US for up to 182 days.
Canadians who stay in the US for more than 120 days in consecutive years and do not file this form, may be detained at the border or banned from entering the US for three to 10 years. Anyone who overstays either threshold will be deemed an American resident, bound by US world income and estate tax laws, and will also face Canadian tax consequences.