We have communicated the rules for US travel and the Substantial Presence Test in the past, but as we chat with clients we find there is still some confusion. So, with CRA and US Border Protection Services sharing information as of July 1, 2014, we thought it was a good time to revisit the rules.
We have sent this to all clients, not just the “snowbirds” whom we know travel to the US frequently, because this could be of interest to some of your friends and family. You can go to the website for the Department of Homeland Security here, which allows you to track your own days. However, please be advised that the dates they have for entry and re-entry on this website could be as much as a year out of date at this time. Track your days, and remember for regular visitors to the US the rule is more like 120 days in a year, not 180 days!
Substantial Presence Test
You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:
1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
- All the days you were present in the current year, and
- 1/3 of the days you were present in the first year before the current year, and
- 1/6 of the days you were present in the second year before the current year.
You were physically present in the United States on 120 days in each of the years 2010, 2011, and 2012. To determine if you meet the substantial presence test for 2012, count the full 120 days of presence in 2012, 40 days in 2011 (1/3 of 120), and 20 days in 2010 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2012.
Days of Presence in the United States
You are treated as present in the United States on any day you are physically present in the country, at any time during the day. However, there are exceptions to this rule. Do not count the following as days of presence in the United States for the substantial presence test.
- Days you commute to work in the United States from a residence in Canada or Mexico, if you regularly commute from Can-ada or Mexico.
- Days you are in the United States for less than 24 hours, when you are in transit between two places outside the United States.
- Days you are in the United States as a crew member of a foreign vessel.
- Days you are unable to leave the United States because of a medical condition that develops while you are in the United States.
- Days you are an exempt individual