How Long Can Canadians Stay In Palm Springs?
Most Canadians who have vacation or second homes here don’t have to be overly concerned about U.S. laws since they won’t come close to the six months or 182 days that are typically allowed by U.S. Homeland Security or by their provincial health care policy.
However, there does seem to be some confusion pertaining to U.S. tax laws about those Canadians who are fortunate enough to be able to stay here for lengthier periods of time. The calculation described recently by on the IRS website (covering three years) is an explanation of the U.S. “substantial presence” test. Canadian snowbirds that meet the requirements for a substantial presence are considered U.S. residents for tax purposes. However, they very often will qualify for a “closer connection exemption” which states that they have a closer connection to Canada then the U.S. and therefore are not required to pay U.S. income taxes.
Income Tax Information
According to information posted on the IRS website, even Canadians who meet the substantial presence test can still be treated as nonresident aliens if they: 1) Are present in the United States for less than 183 days during the year; 2) Maintain a tax home in a foreign country during the year, and; 3) Have a closer connection during the year to one foreign country in which they have a tax home than to the United States (unless they have a closer connection to two foreign countries). For determining whether you have a closer connection to a foreign country, your tax home must also be in existence for the entire current year, and must be located in the same foreign country to which you are claiming to have a closer connection.
Of course you’ll want to check with your Charted Accountant for personal guidelines regarding the best way to enjoy the snowbird resort lifestyle here in the Palm Springs area. More and more Canadians are taking advantage of our mild winters each and every day!
Disclaimer: Sheri Dettman & Associates offers this information as a service only and it should not be relied on without checking with your Chartered Accountant and/or tax professional.