US Citizens or US Green Card Holders Living in Canada – Tax Filing Requirements

If you are a US citizen or US Green Card Holder (resident alien) you are required by the Internal Revenue Service to file a US tax return (1040 income tax return). This 1040 return will include all of your worldwide income earned in the particular year(s).

As a US citizen or US Green Card Holder living in Canada (assuming you are a resident for Canadian tax purposes) you are required to also file a T1 personal income tax return (Canadian income tax return).

The US 1040 income tax return is usually due April 15th, however US Citizens or US Green Card Holders living outside of the United States are granted an automatic extension to June 15th. Note however that any amounts owing would still have to be paid to avoid interest charges to the IRS.

The Canadian T1 tax return will be due April 30th. Note that Canadian taxpayers that carry on an unincorporated business (sole proprietorship) have an automatic extension to June 15th. As mentioned above, although the T1 return will be due June 15th, any unpaid amounts will accrue interest after April 30th.

If you’ve been living in Canada as a US citizen or green card holder and have not filed a US 1040 income tax return you are in violation of the Internal Revenue Code and may be contacted by the IRS and possibly be liable for non-filing penalties and potentially civil penalties.

Other important items to consider:

  1. Canadians are taxed based on their residency opposed to Americans who are taxed based on citizenship or green card status.
  2. In many cases filing both a Canadian and US tax return will not result in double taxation, therefore it is wise to file your US tax return (or file previous delinquent US tax returns) before the IRS contacts you.

Recap:

  • As a US citizen or Green Card Holder living in Canada you are required to file both a US 1040 income tax return (US) and a T1 personal income tax return (Canada).
  • Individuals living outside of the US are granted an automatic extension to file to June 15th.
  • In most cases you will not incur more tax by filing a US 1040 tax return in addition to your Canadian income tax return.
  • Call me today (250-661-9417) to discuss your late filed US returns. I can help you avoid penalties, interest and civil penalties.

I assist US clients in the following areas:

  • Preparation of dual US 1040 and Canadian T1 cross border income tax returns
  • Non-resident tax returns e.g. 1040NR
  • IRS Disputes and late tax returns
  • Non-resident corporation tax returns
  • Tax advice relating to entering and leaving Canada/US
  • Tax advice on owning real property cross border

I’m available to discuss your tax matters by phone at 250-381-2400 or by email at phil@hutcheson.ca

I look forward to speaking with you.