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U.S. and Canadian border services to collect biographical data

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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.

Clients who winter in the U.S. may soon be able to stay longer

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This article from Investment Executive features Cardinal Point’s Terry Ritchie and focuses on proposed legislation in the U.S. that would increase how long Canadian “snowbirds” can spend in the U.S. Under the Jobs Originated Through Launching Travel Act, snowbirds could stay in the U.S. up to 240 days per year (the current limit is 180 days). This proposed “retiree visa” is under consideration, so the limit is still 180 days.

Snowbirds should be aware of other restrictions and regulations that may impact them, including tax obligations. Under the”substantial presence test,” they may need to file an income-tax return with the IRS. Snowbirds should also be aware that U.S. income, including renting or selling U.S. property, may change their taxable status. In addition, they will soon be held more accountable for their visits, as Canada and the U.S. will implement a plan in June 2014 giving both governments easier access to information on when travelers enter/exit both countries. Get all the details in the full article found here.