May 25, 2013
Many of you are snowbirds from Canada who travel to the USA for the winter. But are you eligible to do so? Do you know the current rules?
The following is a guest post by Ken Bartlett. He is an RVer who spends his winters down south. The following applies whether you are an RVer or not.
Canadians Travelling South for the Winter
There are three things to consider
Time out of your Province and Medical Coverage
It is essential that all Canadians travelling in the USA have supplementary medical insurance since the Provincial medical schemes cover only a tiny fraction of medical costs in the USA. An unpaid USA medical bill might even cost you your home. The authorities will pursue you legally in Canada for payment of their bill.
Generally, the Provincial medical schemes allow you to be out of your Province for 6 months less a day in one calendar year. In BC and some other Provinces, recent legislation now allows up to 7 months. This will allow you to be outside Canada for 6 months less a day (see below) and also visit another province for up to one month without losing coverage. Also in BC, by registering with the medical authorities you can be away for up to 12 months once every 5 years. Please check with your own provincial medical authorities for the current legal rules. Being out of your Province in excess of the stipulated time generally means your coverage will be either denied or substantially reduced.
As far as I am aware, there is no restriction on time out of the Province for payment of OAS, CPP or coverage for your vehicle from ICBC. Be aware that if you stay in one US State for an extended period then that State may have a requirement to register your vehicle in that State.
Current time in the USA
The USA allows visitors to be in the USA for 6 months less a day within one calendar year without a visa after acceptance by the immigration authorities at the border. This is generally accepted as being 183 days less one day. A current passport is required. If the passport expiration date is close to the expected exit date then you may be denied entry. Best have an expiry date at least 3 months after the expected exit date. Crossing the border for one hour to buy beer or gas counts as one day towards the 183 days. Staying longer than 183 days is possible but that means you are illegal unless other paperwork has been submitted and approved. It also means you are now subject to USA tax laws which in general means you will have to submit a US income tax return declaring and being taxed on your world-wide income in addition to your Canadian Tax return. It can get messy and complicated. See notes below.
Cumulative time in the USA
Add the current tax-year (ending December 31) days in the USA to 1/3 of the last year number days in the USA to 1/6 of the previous year number of days in the USA. If the sum of these three numbers exceeds 183 days less a day then you are subject to the USA tax laws. Example: suppose you stay in the USA each winter for say 150 days (5 months), then (150)+(150*1/3)+(150*1/6) = 150+50+9=209 days. You are now in default of this 3-year rule and subject to US tax laws. [Note: mathematical compliance with this rule is about 123 days for each of three years or about 4 months each year.] Days within each year are cumulative e.g. three 50-day touring trips or 150 one-hour trips for beer equals 150 days.
UNLESS: You file US tax form 8840, Closer Connection to another Country, (see below) within 30 days [January] of the calendar tax year in which you exceeded the above 183 days.
USA tax form 8840 can be readily down loaded on the Internet and must be completed for each and all persons in default of the 183 day rule. Click on the link for the website www.irs.gov/pub/irs-pdf/f8840.pdf.