Tax Issue, Canadian worked in US for 1 year+

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Subject: Tax Issue, Canadian worked in US for 1 year+
  A Canadian citizen started working in us in December 2007, but the first paycheck was issued after January 1st 2008, so no us return was required for 2007.

Worked in us continuously till March 2009 then the work was terminated and returned to Canada.

Question:

a). for us return 2008, which form should be used, 1040 or 1040NR;
b). all the dependents are still live in Canada, can I claim any dependent allowance on the us return;

c). for the canadian return, what status should I claim to be;

[29-04-2009,16:22]
[***.116.6.190]
John
(in reply to: Tax Issue, Canadian worked in US for 1 year+)
You are considered a resident alien if you met one of two tests for the calendar year.

The first test is the "green card test." If at any time during the calendar year you were a lawful permanent resident of the United States according to the immigration laws, and this status has not been rescinded or administratively or judicially determined to have been abandoned, you are considered to have met the green card test.

The second test is the "substantial presence test". To meet the substantial presence test, you must have been physically present in the United States on at least 31 days during the current year, and 183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count all of the days you were present in the current year, and one?third of the days you were present in the first year before the current year, and one?sixth of the days you were present in the second year before the current year.


[29-04-2009,20:39]
[***.130.12.0]
Richard
(in reply to: Tax Issue, Canadian worked in US for 1 year+)
Thanks Richard for the reply.

Yes, I have to be the RA by the substantial presence test. But how can I claim exemptions for my spouse and children, they have nether SSN nor ITIN yet, should I apply ITIN for they new and states that W-7 forms have been submitted in my return?

On the Canadian side, I think I will be classified as "factoural resident" and just file a return as I normally do in the early years, is this right?

[29-04-2009,23:07]
[***.116.6.190]
John
(in reply to: Tax Issue, Canadian worked in US for 1 year+)
This is not straightforward. But this IRS info. may help, John (or be more confusing). I´d go to the link below, and take a close look before deciding if they qualify as dependents.

http://www.irs.gov/publications/p17/ch03.html

Qualifying Child:

There are five tests that must be met for a child to be your qualifying child. The five tests are:

1.Relationship,
2.Age,
3.Residency,
4.Support, and
5.Special test for qualifying child of more than one
person.

Residency Test:

To meet this test, your child must have lived with you for more than half of the year. There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents.

Temporary absences: Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as:

* Illness,
* Education,
* Business,
* Vacation, or
* Military service.

Child in Canada or Mexico. A child who lives in Canada or Mexico may be your qualifying relative, and you may be able to claim the child as a dependent. If the child does not live with you, the child does not meet the residency test to be your qualifying child. If the persons the child does live with are not U.S. citizens and have no U.S. gross income, those persons are not ?taxpayers,? so the child is not the qualifying child of any other taxpayer. If the child is not your qualifying child or the qualifying child of any other taxpayer, the child is your qualifying relative if the gross income test and the support test are met.

You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child is a U.S. citizen, U.S. resident alien, or U.S. national for some part of the year. There is an exception for certain adopted children who lived with you all year. See Citizen or Resident Test , earlier.

Example.

You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. You are single and live in the United States. Your mother is not a U.S. citizen and has no U.S. income, so she is not a ?taxpayer.? Your children are not your qualifying children because they do not meet the residency test. Also, they are not the qualifying children of any other taxpayer, so they are your qualifying relatives and you can claim them as dependents if all the tests are met. You may also be able to claim your mother as a dependent if all the tests are met, including the gross income test and the support test.

[30-04-2009,15:35]
[**.192.28.31]
Richard
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