So I am moving to the USA for work on a J-1 visa. I know that I will be classified as a non-resident alien and so my TFSA investments are safe. However I have an additional USD cash account at TD which I regularly pay capital gains tax on. When I move to the US, will I need to file these transactions on my US tax return (I am buying US companies through my Canadian broker), or is it completely separate and I should only claim them on my Canadian tax return?
Canadian working in USA on J-1 visa and taxes on investments
- Thread starter peaches4
- Start date
@peaches4
If you pass the substantial presence test, you will be a tax resident of the US (non-resident alien is an immigration status). So your TFSA investments are not safe.
Once you are a tax resident of the US, you will report all investment income and capital gains to the US. And taxes paid in Canada (because there is a withholding tax on investment income for non-residents) will be a foreign tax credit on your US tax return.
If you pass the substantial presence test, you will be a tax resident of the US (non-resident alien is an immigration status). So your TFSA investments are not safe.
Once you are a tax resident of the US, you will report all investment income and capital gains to the US. And taxes paid in Canada (because there is a withholding tax on investment income for non-residents) will be a foreign tax credit on your US tax return.
@jjp297 J-1 is an internship type visa and my contract is for two years. I have an award from the Canadian government which is paying the bulk of my salary. Only a small part is paid by the US company. So my TFSA is definitely 100% safe in this case.
And nonresident alien status is used for taxes. I did an internship in the US previously during my undergrad and had to file 1040-NR form for my taxes.
you are correct that I will need to pass the substantial presence test, but that would be if I was staying past two years. But otherwise your information is incorrect.
And nonresident alien status is used for taxes. I did an internship in the US previously during my undergrad and had to file 1040-NR form for my taxes.
you are correct that I will need to pass the substantial presence test, but that would be if I was staying past two years. But otherwise your information is incorrect.
mattgreen84
New member
@peaches4 Just a heads up to check your cumulative dates (your employer may have access to Glacier, or something like that to check) as your prior internship in the US may push you over the substantial presence threshold which could deem you a US resident for tax purposes in your 2nd tax year 
I'm on J-1 status currently.
I'm on J-1 status currently.
@mattgreen84 Thanks for the info. As I understand it, the substantial presence test looks at information over the previous 3 years. My internship was 4 years ago and only for 4 months, so shouldn't play a role in this case.
@peaches4
I know what a J-1 is.
That is not how it works.
Yes, but it is different when stating tax resident.
As per the IRS:https://www.irs.gov/individuals/taxation-of-alien-individuals-by-immigration-status-j-1
I know what a J-1 is.
That is not how it works.
Yes, but it is different when stating tax resident.
As per the IRS:https://www.irs.gov/individuals/taxation-of-alien-individuals-by-immigration-status-j-1