According to a new cross border security program, Canadian retirees would be required to mind their time period for which they stay out of Canada, failing which they may have to pay out a big penalty.
The step is taken to tighten security at the border of Canada and USA.
It would be mandatory for the visitors to keep a record of their stay in US or outside Canada because their health care insurance, tax and other regulations would be largely affected.
The number of days and much other information would be recorded and tracked with the help of bar codes present on the passport. This would work as an important tool to control the entry and exit of visitors flowing between Canada and US.
Consequences one may face
Internal Revenue Service in US makes a person pay taxes if he or she has stayed for 31 days in the current year or 183 days in the last three years. An individual who is physically present for the mentioned period will have to comply with the tax laws of US.
Therefore, those staying for more than four months in a year in US is advised to meet tax obligations there.
• JOLT Act allows retirees of Canada to stay for up to 240 days in a year in US. But, if one stays for this long one may be asked to pay taxes similar to the same paid by US citizens.
• One may have to pay estate tax for owning up property in any other part of the world, as applied for any other US citizen.
• If one stays out of the country for more than 212 days, then one may get compromised upon the eligibility criteria of health insurance too.
• You will be paying a penalty for not filing returns even if it out of unawareness. And this is going to make a big amount go burden on your head to clear off.
• One will have to pay taxes on Capital gains because one would not be considered to be a Canadian citizen after having stayed in US for such a long time.
Advantage for US
US provides Canadian retiree visa
Which also works as a revenue raiser for the country? This is also a way to lure the wealthy Canadians.
Experts believe that this kind of an option is nothing but a tax bomb for Canadians who merely hang around in US because they are allowed to do so. However, they don’t realize the magnitude of the facility. Once and individual crosses the limit of stay, he may be considered to be equivalent to an American when it comes to paying taxes.
Staying in US after getting retired is quite common with the retirees, especially the wealthy ones. However, one must learn the immigration rules, the laws in in Canada and in US for facing any kind of extra tax burden and penalty for not filing returns on time.