Snowbirds and Travelers to the US
A lot of retirees travel south each winter to escape the cold. They are probably well aware how their medical coverage through OHIP works (up to 212 days which is effectively 7 months) and hopefully purchase adequate “travel insurance“, so they don’t find themselves in a financial mess should a medical emergency occur. An important change initiated by the Internal Revenue Service (IRS) occurred on June 30th, 2014 which might have Canadians rethinking how long they actually stay in the US.
Substantial Presence Test: The Magic Number is 183
Since June 30, 2014, you are now tracked on how many days you have been in the United States. There are two tests as follows.
Test 1: 31 days during the current year, and
Test 2: 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
All the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year.
If you exceed the two tests above, you would be deemed a US resident for tax purposes. Here’s an example assuming someone spends 120 days each year in the United States and avoid any nasty surprises.
In the example above, while you only stayed 120 days annually, you come within 3 days of exceeding the 183 day limit. So start tracking the days you plan to vacation in the US!
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