USA Canada Border Crossings Will Be Scanned

In my tax practice I deal with many Canadians who are consistently travelling back and forth between Canada and the USA, staying in USA for extended period of time. This creates a big problem, due to the fact for a longer time of stay in USA, you could become a USA tax residence even you are a Canadian citizen. In this case you have to file income tax return both to the USA and Canada. 

Clients never seem to figure out, how long they have stayed in USA, since the border authority does not stamp their Canadian Passport. There are specific schedule in the USA tax form to provide your travel information to the IRS, to determine, if you are a primary USA tax residence.

Looks like, things will start to change starting July 1, 2014. Under a new agreement, Canada and U.S. border authorities will now scan your passport when you enter and exit their country to determine how long a person has actually been out of their own country of residence in a given year.

Once U.S. and Canada have access to a travel day count for its citizens, both countries can track a person’s physical presence and use it to apply various immigration and tax laws. more »