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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29535
Experience:  Taxes, Immigration, Labor Relations
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Hi there, i am a Canadian citizen working in the US as a religious

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Hi there, i am a Canadian citizen working in the US as a religious teacher under an R-1 visa. I paid both US and Canadian taxes last year. I have now received a W-8BEN form and a W-9 form from my US bank. Which do I fill out, and if neither is appropriate to my situation, which is the correct form to fill out? Thank you!

Lev :

Hi and welcome to our site!
The form W8BEN is used by nonresident aliens and the W9 form is for US citizens and resident aliens.
If you are a resident of the US - you would be considered a resident alien and should use the W9 form.

Lev :

Please be aware that your residency status for tax purposes is different from that is used fro immigration purposes.
If you are a resident alien - you report all your worldwide income on form 1040 as other US persons. If the same income is also subject of Canadian taxes - you may claim a credit for foreign tax paid on your US tax return.
If the same income is taxable abroad and in the US - you may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 -http://www.irs.gov/pub/irs-pdf/f1116.pdf please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdf
The credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. That means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.

Customer:

Thank you! I did fill out a form 1040 or 1040a for my taxes. So, just to confirm, does that mean that even though for immigration purposes I am a non-resident alien, for taxation purposes I am a resident alien and therefore I fill out the W9 form?

Lev :

That is correct - if you are living in the US - you are a resident alien for tax purposes - and that is why you are filing form 1040 (or 1040A) while nonresident aliens are using form 1040NR.
So far - you need to use form W9.
All your worldwide income is taxable in the US and you may claim a foreign tax credit as mentioned above - thus effectively will eliminate double taxation of the same income.

Lev :

Since residents and nonresident aliens are taxed differently, it is important for you to determine your status. You are considered a resident alien if you met one of the following two tests for the calendar year:
The first test is the "green card test."
The second test is the "substantial presence test."
To meet the substantial presence test, you must have been 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. To satisfy the 183 days requirement, count: ◦All of the days you were present in the current year, and
◦One-third of the days you were present in the first year before the current year, and
◦One-sixth of the days you were present in the second year before the current year.
So far - as you likely meet the "substantial presence test" - you are a resident alien for tax purposes.

Customer:

Thank you, XXXXX XXXXX very helpful. I did not realize that my Canadian income was also taxable by the US government so I did not file form 1116. Can I still file it even though my taxes were filed in March? Do I send that along with the W9 to my bank or do I send 1116 to the IRS separately?

Lev :

By signing form W9 - the person certifies his/her tax identification (social security number or tax ID) and that he/she is not subject of backup withholding. That form is not sent to the IRS.
What you need to send to the IRS is your tax return - form 1040 in your situation and all supplemental forms including 1116.
On your tax return - you report your income received during the tax year. For instance when you filed your 2012 tax return - you reported 2012 income. In January - you will prepare your 2013 tax return - and will report your 2013 income.

Customer:

So do I need to send form 1116 now, to complete my 2012 return that I already filed, or do I only need to send that when I file my 2013 tax return?

Lev :

If you need to correct your 2012 tax return that was already filed - you need to use amended tax return form 1040X - www.irs.gov/pub/irs-pdf/f1040x.pdf


and will attach form 1116 to that amended tax return

Customer:

Thank you. One last question: there is a box on form W9 that asks for any exemptions. According to the back of the form, I don't seem to qualify for any exemptions. Can I leave it blank? Also, this "withholding" of 30% is only on the interest I have accrued on my savings account (I have no investments), correct? They're not taking 30% of my income, are they?

Customer:

I mean, if I am not entitled to an exemption from the withholding, are they going to take additional taxes from me from my taxable earnings? Thank you.

Lev :

Because you are a resident alien - there is NO withholding from your interest income on bank accounts. No need to claim any exemptions.

Customer:

Great! Thank you so much for all of your advice. I really appreciate it!

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