Deemed Resident of the USA - The Closer Connection Form

Canadians have been trying to escape the cold of winter for years.  Each year thousands of Canadians fly, drive and visit the warm climate of states such as Arizona, California and Florida.

Some of these individuals spend such a long time in the US that the United States deems these people to be residents because they have a substantial presence in the US.

If you are deemed to be a resident of the US you will become taxable in the US on your world wide income.

The calculation deeming you to be resident in the US is based on a simple mathematical formula. The formula works like this, add the number of days you stay in the US in the current year plus 1/3 of the days you spent in the US two years ago plus 1/6 of the days you spent in the US two years ago. If this number is more than 183 days you are deemed to be resident in the US unless you have a closer connection to another country.

A closer connection to another country, such as Canada is determined by looking at where your social and economic interests are. Think about where your permanent home is, where does your family goes to school,  where is your health care card is from, and where do you work. 

Is it fair to be taxed as if you are a resident of the US if you spend a substantial time in the US? Sure, you drive on their roads, use their police force, use their water and utility system. Somebody has to pay for these services.

Evaluate whether you have a closer connection to the US than your country by completing the following IRS form.

Click Here to See IRS Form 8840 Closer Connection Form