Friday, October 25, 2013
Proposed legislation in the U.S. might have severe tax implications for Canadian snowbirds going south of the border for the cold winter months. The law now states an individual who spends more than 182 days annually in the states, or more than 120 days average over a three-year period can be considered a resident for tax purposes.
A new piece of legislation called the Jobs Originated through Launching Travel Act permits Canadian retirees to spend up to 240 in the United States, but now snowbirds spending that amount of time here may have to pay income and estate tax.
However, if an IRS form 8840 form called the Closer Connection Exemption Statement for Aliens is filed snowbirds can avoid tax fines. Not filing the 8840 form could cost snowbirds upwards of $10,000.
See Gail Johnson, What Canada's Snowbirds Need to Know About U.S. Taxes, Yahoo Finance, Oct. 18, 2013.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.