There is a misunderstanding that the US will only consider you to be resident for tax purposes (assuming that you are not a US citizen) if you spend more than 6 months a year in the country. It’s not that simple.
The US looks at days of presence to establish residence. It is a three-year test where you add all of the days in the current year, plus 1/3 of the days in the immediately preceding year, and 1/6 of the days in the second preceding year. If this formula adds up to 183 days, you are considered to be a tax resident of the US and subject to taxation on your worldwide income.
Let’s look at some examples:
If you spend more than 183 days in the US in the current year, you are a tax resident.
If you spend 150 days in the current year, 120 days last year, and no days from the year before that, you are a tax resident (120+(1/3×120)=190).
If you spend 120 days in the current year, plus 120 days in each of the last two years, you are not a tax resident (120+(1/3×120)+(1/6×120)=180).
If you are considered to be resident for US tax purposes, there is some relief available under both the Internal Revenue Code and the US-Canada Tax Treaty, but you may have to file a US Non-Resident Tax Return to claim that relief. In the case of a Treaty Election, though, that return must be accompanied by a number of informational filings disclosing your worldwide assets.
So, instead of thinking of it as 6 months, if you spend a consistent amount of time in the US each year, to avoid having to file anything with the IRS, you may want to start thinking of it as 4 months (as long as 3 or more of those months don’t have 31 days in them).
If you think that you have run afoul of your day count, talk to us. We want to help.