Since the US and Canada enhanced the sharing of information on individuals entering and exiting the country in 2014, tracking length of stays has become much more important. It’s critical for all Canadian snowbirds to maintain an accurate record of how many days they are in the US, to ensure they aren’t affected by the following:
US income tax on worldwide income
The US taxes both their citizens and residents on their worldwide income. Canadian snowbirds will be deemed residents if they are “substantially present” in the US. If your current day count in the US in a calendar year is greater than 30, and you’ve spent a substantial amount of time in the US in the two calendar years previous, please click here for an overview of how you may be affected.
US estate tax on fair market value of worldwide assets
The US also taxes their citizens and residents on the fair market value (FMV) of their worldwide assets at death, meaning uninformed snowbirds can find their inheritance subject to US estate tax if they are domicile in the US at the time of their death. It is important to note that the “residency” rule for estate tax is different than the test for income tax.
Canadian departure tax
Canada taxes its residents on their worldwide income. Once a Canadian person is no longer resident in Canada, he or she is deemed to have disposed all assets (subject to certain exceptions), recognize the gain on those assets, and pay tax on that gain.
Banned from travel to US
Canadians who overstep the maximum days for immigration purposes can be excluded from visiting the US in the future. The period of inaccessibility can range from three years, to 10 years, to permanently.
Loss of provincial health care
Once an individual is no longer resident of a particular Canadian province, he or she may lose entitlement to provincial health care.