Often we get asked the question as to how long a Canadian can stay in Arizona. For those that have vacation homes here and are coming down for a week here and two weeks there, don’t have to be too concerned as they won’t come close to the 6 months or 182 days that are typically allowed by US Homeland Security or by your applicable provincial health care policy. But for those that are fortunate enough to be able to stay for lengthier periods of time, there seems to be some confusion between the amount of time Canadians are “allowed” in the U.S. and the U.S. tax laws that apply to snowbirds.
The calculation described in this article (covering 3 years) is an explanation of the U.S. “substantial presence” test. The IRS provides more detailed information here: http://www.irs.gov/businesses/small/international/article/0,,id=96352,00.html
Canadian snowbirds who meet the requirements for a substantial presence are considered U.S. residents for tax purposes. However, they very often will qualify for a Closer Connection Exemption, which states that they have a closer connection to another country and therefore are not required to pay U.S. income taxes. To claim a Closer Connection Exemption, you must file form 8840 with the IRS. The IRS provides detailed information on the Closer Connection Exemption here: http://www.irs.gov/businesses/small/international/article/0,,id=96377,00.html
If you are a Canadian snowbird staying in excess of an average of 122 days per year and do not want to pay U.S. income taxes or fines, please visit the IRS website (links above) and make sure you understand how the rules apply in your situation.
You can find more information about U.S. entry and exit requirements in the Foreign Affairs and International Trade Canada’s Travel Report for the U.S. found here: http://www.voyage.gc.ca/countries_pays/report_rapport-eng.asp?id=308000
