Canadian Snowbirds Need to Know This:

Do you know about Form 8840?

Canadian Snowbirds who spend months in the USA annually may be surprised to learn that, although border authorities permit a six-month (183-day) stay, the limit set by the American IRS before USA income tax is incurred is only 120 days per year (approximately). The actual calculation is based on the average number of days in the country during a 3-year period.

There is a simple way around it that will avoid the need to file a US tax return: Canadians should annually file a Form 8840 or Closer Connection Form.

This has become even more important since a joint Canada/USA declaration titled Beyond the Border was introduced (in 2014). It includes an initiative in which all entry and exit information is shared electronically and immediately between Canadian and USA border authorities. The date for enacting this new legislation has been delayed but, when in place, it will give American authorities precise and irrefutable data about the number of days Canadians spend in The States in any 12-month period.

Randy and I have been snowbirds in America's southern states biennially for 15 years. By staying home every second winter, we save a few dollars and inevitably appreciate the next trip even more. Although we love time spent closer to family, we realize over and over again that we're really not that keen on Canadian winters anymore. We're ready to travel south more frequently. Form 8840 is one of a few things we'll need to take into account.

I'm thankful to one of my loyal Canadian readers for pointing out the importance of the form.

Here are links to web sites that explain it all officially and better than I ever could. They also provide links for downloading the current year's Form 8840.

Canadian Snowbird Association

Canadian Automobile Association (CAA)

Canadian Club of the West Valley

Additional details:

  • If you cannot prove you have a permanent year-round residence (owned or rented) in Canada, you could encounter additional scrutiny.

  • If you bank in The States as a convenience like we do, be sure your account doesn't earn a penny of interest to avoid being required to file a US tax return. (We learned that the hard way fifteen years ago.)

  • If you own property in the US, you should file Form 8840 regardless of your length of stay in the country.

  • Both spouses traveling together need to submit the form.

I'm curious as to how many other Canadian Snowbirds were unaware of the Form 8840 requirement? If you're one, I hope this information will save you from potential hassels from the IRS and border authorities.

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