Are Canadians Who Live in the U.S. Part-Time Required to Pay Taxes?

 Posted on March 05, 2026 in Taxation Law

There are many people who spend time during the year living in both Canada and the United States. "Snowbirds" will often avoid the cold Canadian winters by spending a few months living in warmer climates to the south. However, what some Canadian citizens may not realize is that part-time residence in the United States may create tax obligations.

The tax laws in the United States are complicated, and the requirements that may apply to citizens of other countries are not always easy to understand. Canadians who have learned that they may owe taxes or who want to take steps to minimize their tax obligations or mitigate potential penalties can consult with an attorney who has a strong understanding of the applicable laws.

U.S. Tax Obligations for Non-Citizens

Certain tax obligations apply to aliens in the United States. People classified as resident aliens are required to pay taxes on all income they earn. People classified as nonresident aliens will generally only be taxed on income earned from sources within the United States or from businesses operated in the United States.

Resident aliens include Green Card holders and people who have met the "substantial presence" test. Under this test, a person is considered a resident alien for a tax year if they were present in the United States for 31 days or more within that tax year and for 183 days during the most recent 3 years, counting all of the days they were present in the country during the most recent year, one-third of the days they were in the country during the second most recent year, and one-sixth of the days they were in the country during the third most recent year.

Resident aliens are taxed the same as U.S. citizens, and they are required to file annual tax returns. They must also file a Foreign Bank and Financial Account Report (FBAR) if they own foreign accounts with a total balance of at least $10,000 during a tax year. Nonresident aliens are required to file annual tax returns using Form 1040-NR.

The "Closer Connection" Exception

Even if a Canadian who resides in the United States part-time meets the substantial presence test, they may qualify for an exception that will allow them to be taxed as a nonresident alien. The "closer connection" exception may apply if they can show that they have a closer connection to Canada or another country than they do to the United States.

The closer connection exception can be claimed by filing Form 8840. This form can be filed if a person was present in the United States for fewer than 183 days during the applicable tax year and if they maintained a tax home in another country. For Canadian citizens, living in Canada most of the year and paying taxes as a Canadian resident will establish a tax home in that country.

To demonstrate that a person has a closer connection to Canada than the United States, they can list information on Form 8840 that shows which country they have more significant economic and social ties to. In addition to showing that a person designates Canada as their country of residence and has filed certain documents with the IRS indicating their status as a foreign citizen, a person can provide details such as the location of their permanent home, their family, various belongings (cars, furniture, clothing, etc.), their legal and financial documents, banks where they hold personal accounts, and business activities. Other relevant information may include where they hold a driver’s license, where they are registered to vote, their contributions to charities, and their affiliations with religious organizations, political parties, professional organizations, or social groups.

Contact Our San Jose, CA Tax Attorney

To avoid potential tax issues, Canadian citizens will want to determine whether they qualify as resident aliens in the United States and whether they will need to claim exceptions to U.S. tax laws. At John D. Teter Law Offices, our San Jose tax lawyer can provide guidance on the requirements that apply to Canadian citizens, and we can also help clients determine how to address taxes that may be owed or how to mitigate potential penalties. Contact us at 408-866-1810 to set up a consultation.