Snowbirds! Know Your Obligations
It is important to understand your retirement numbers when it comes to planning for the future – especially if you classify yourself as a Snowbird.
To put it simply, being a Snowbird means that you travel from anywhere in Canada down to the Southern areas of Florida (typically) or other warmer spots in the United States. The goal is to try and avoid the bitter winters Canada is known for, spending those months some place much more pleasant.
What really matters is that travelling between borders from Canada to America may carry a few additional concerns. If you’re not careful, you’ll likely encounter some specific tax requirements as a Snowbird who travels back and forth between the U.S. and Canada. This holds especially true if you spend significant amounts of time away from the country (typically greater than 6 months or so a year).
As a Snowbird, you should note the following facts prior to travel. That way, you can ensure you’ll have a great time while you’re away –without paying an arm and a leg to spend time out of Canada.
Maintaining Your Citizenship
First and foremost, you need to understand how lengthy travel outside of the country works. In most cases, you’ll be enjoying a B-2 travel visa to head into the U.S. or other country and enjoy your time away from the Canadian cold. Of course, these visas are only good for so long. In fact, the exact amount of time you get to spend out of country is 182 days – or just about 6 months.
If you stay in your winter escape any longer than that, you risk a few consequences. Firstly, you may be denied future travel outside of Canada due to the length of time you stay away. With new tracking laws coming into play, Canada is coming down much harder when it comes to the length of your visits out of the country.
Staying Accurate with Income Reporting
Make sure to report ALL your income that your receive, both inside and outside Canada.
Be sure to claim all tax credits that belong to you, including federal, provincial and territorial credits. The last thing you want is to inaccurately report tax-related information with your travels between countries. As a Snowbird, any problems with your taxes and income reporting could keep you grounded for good!
Keep Below the 6 Month Threshold
As you have probably read, the biggest concern within Canadian tax obligations boils down to citizens and their status as residents in the country. In most cases, this equates directly to maintaining residency in the country for at least 6 months out of the year.
According to Canadian travel visa B-2, you can spend up to 182 consecutive calendar days out of our great country before you’re considered a resident of another country. 182 days equals approximately 6 months of time out of the country.
If you spend any more time than the 182 days, you risk all sorts of Canadian tax changes and penalties as a result. In fact, you’ll likely be declared a U.S. citizen instead of a Canadian one, losing out on your provincial benefits, paying U.S. taxes and being hit with a departure tax from Canada.
The 6 Month Magic Number
As you can see, most of the trouble for Snowbirds starts just past the 6 month mark. The best way to avoid this trouble is to make sure you do not exceed this amount of time out of Canada.
The good news is that 6 months is quite a bit of time to enjoy. You’ll be able to avoid practically all the cold weather with 182 days a year you can spend in warmer climates. As long as you’re careful about your dates, you can continue to enjoy the Snowbird lifestyle without any problems related to your taxes, citizenship and related provincial benefits.
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