This Investment Executive article offers a reminder that a new set of U.S.-Canadian border rules will soon be enforced, which could lead to tax and immigration issues for Canadian snowbirds. It suggests that Canadian financial advisors caution their snowbird clients that overstaying the limit in the U.S. could result in U.S. tax residency status and potential problems when crossing the border. In the article, Cardinal Point’s Terry Ritchie warns, “If you’re not keeping track, or you’re fudging the number of days, you’re compromising all the good things you want to go down there for.”
When visitors enter and exit at all border crossings starting on June 30, U.S. and Canadian border services will collect biographical data. This will provide both sides of the border with definitive information regarding residency, instead of relying on visitors to self-report. The number of days an individual spends in the U.S. is an important part of the U.S. “substantial presence” test (SPT). Those who meet the SPT may be considered U.S. residents and may be subject to U.S. income and gift taxes. To learn more about the formula behind SPT, read the full article here.