It depends on how many days have you spent in the U.S. in the past 3 years
Canadians may spend up to 182 days in the U.S. in any 12-month period. However, from a tax perspective, Canadians that have spent an average of 122 days or more in the past three calendar years in the U.S. may be deemed “resident aliens”. In order to be treated as a “non-resident alien”, you need to complete a Substantial Presence Test. Your result will determine if you have to file an IRS Form 8840 (“Closer Connection Exception Statement for Aliens”) that tells the IRS that you have a “closer connection” to Canada for income tax purposes.
The Substantial Presence Test calculation is simple:
Were you in the U.S. for at least 31 days in 2021?
If NO, as far as the IRS is concerned, you do not have a closer connection and therefore you do not have to file an IRS Form 8840.
If YES, do the following calculation:
# days you were in the U.S. in 2021 = __________ days
# days you were in the U.S. in 2020 = __________ x 1/3 = __________ days
# days you were in the U.S. in 2019 = __________ x 1/6 = __________ days
TOTAL DAYS (add the three numbers) = __________ TOTAL DAYS
If your TOTAL DAYS is 183 days or more you should file the IRS Form 8840. The filing deadline for IRS Form 8840 - also known as the Closer Connection Exemption - is June 15 for the previous calendar year. Filing such a form will not flag you for any special attention by the IRS. If your total is 183 days or more and you do not file a Form 8840, two things could happen:
You could get caught up in a taxation claim by the U.S. government for taxes owed for the years in which you met the Substantial Presence Test, but did not file the IRS Form 8840 (“Closer Connection Exception Statement for Aliens”).
You could get questioned at the border by a knowledgeable inspector.
You should keep track of the days you are in the U.S. because the government knows based on when you entered and left the country.
If you would like to learn more about IRS Form 8840, please visit www.irs.gov/Form8840
If you would like to download or print a copy of the IRS Form 8840, please click below:
Please note: we cannot answer questions about this form. You should consult an accountant.