Form 8840

Taxes. Likely not a surprise but among all 61 provinces and states in Canada and the United States, the highest combined personal income tax rates in North America are in the 10 Canadian provinces. Canada has a progressive system that really kicks in as income goes up. Someone with income over $200,000 CAD in Ontario would pay the province’s combined top tax rate of 53.53%. The top rate in New York is lower at 45.82% and that rate doesn’t kick in until income goes over $1 million USD.

It is a bit of a shock when the government leaves you with less than half of your income after tax. It would be even worse if, as a Canadian snowbird, you had to pay taxes in both Canada and the United States.

We carefully track our time in the United States as overstaying our welcome can result in being deemed a U.S. resident for tax purposes. We would be required to pay taxes in the United States even though we are not U.S. citizens. There are other issues with overstaying and with new systems in place at the border all Canadian snowbirds should be careful to track their days and respect applicable tax and immigration laws.

The IRS uses an odd and confusing test to determine whether a Canadian snowbird should be considered a U.S. resident for tax purposes. If you spend 31 days in the U.S. in the current calendar year and 183 days during the three-year period covering the current calendar year and the two preceding calendar years on a weighted basis then you may be taxed. To arrive at the three-year total you have to add all of the days spent in the current calendar year plus one-third of the days spent in the preceding year plus one-sixth of the days spent in the U.S. in the year prior to that.

Much easier to use this U.S. Residency Calculator from the Snowbird Advisor website.

Our result:

Uh oh. We may be considered a U.S. resident for tax purposes.

To avoid being taxed in both countries, we need to file a Form 8840 Closer Connection Exception Statement for Aliens. You can download that form over here.

It is a short questionnaire which determines whether you have a closer connection to your home country.

Questions cover the following:

  • Where your permanent home is
  • Where you keep your belongings
  • Where your family lives
  • Where you’re registered to vote
  • Where your drivers license was issued
  • Were your banking and financial accounts are located
  • Where you’re covered by a government health plan

You can continue to enjoy up to 6 months in the United States year after year as a Canadian snowbird provided you file the 8840 form prior to June 15 in the year following the year in which you qualified as a U.S. resident for tax purposes. If you fail to file on time, you may be considered a U.S resident for tax purposes and subject to other penalties.

We completed our forms this past week-end and we will send them on their way today. One form for me. One for Lorraine. Two separate envelopes, one for each form. Copies on file in the coach.

Uncertainty Deferred

More than I thought. 28 sites with full-timers. We thought the number here would be about 10. Surprising.

Thankfully we now get to see people as we walk around the park. We continue to practice social distancing however we no longer experience social isolation. That makes a big difference.

Our time at the dealership, five weeks in total, was fine and we are so thankful for their generous hospitality. We were truly socially isolated during that time with limited social contact and that did begin to take a toll on my well-being.

We moved to our seasonal site on Friday without any issues. Our outdoor furniture survived the winter without any noticeable damage. For the time being we have a site with services in a beautiful outdoor setting in a quiet and peaceful place.

The cellular Internet here is high-speed. I get about 100 Mbps from the tower. Thank heavens for our international unthrottled high-speed unlimited cellular data plan. I use anywhere between 300 and 400 GB of data on a monthly basis and a reliable high-speed Internet is a necessity for our coach.

Uncertainty still lingers. Not just with us but for most of the full-timers here. The same question comes up in casual conversation: what will happen to us come fall? Will we be allowed to travel south?

I do not know.

The uncertainty of where we would live in Canada has been resolved. For now. Where will we be living come October?

I do not know.

This constant uncertainty from COVID-19 makes the RV lifestyle much less tenable for Canadian Snowbirds. The whole country, with the exception of a few places in British Columbia, is frozen for most of the year. Even in May. We are back into sub-zero temperatures overnight with daytime highs struggling to get past 8 Celsius or 46 Fahrenheit. Man is it cold in this country.

There is no way that we would choose to live in our coach during the winter months in Ontario. We even found it unpleasant during April.

I will be writing to the Canadian Snowbirds Association to see what, if anything, they might be doing to ensure our political leaders take into account the displacement of hundreds of thousands of Canadian Snowbirds that alternate their six months between Canada and the United States.

Trying to make alternate living arrangements at the last minute would be difficult and stressful. And I am not sure at what point in time we would have to make a call as to whether we stay in Canada this winter. June? July? August?

For now, I will try to not worry about what happens in another 5 months.

The time to worry about what happens next will come along soon enough.

Uncertainty deferred.

Work At Home

During our retirement, I have been able to spend a lot more time in my volunteer work helping churches and not-for-profit groups in audio, music and web development. Usually 30 to 40 hours a week. Keeps me very busy.

The government restrictions have made this work far more challenging. Despite the restrictions I have found ways to work around most of the limitations with technology. In some cases, taking very unconventional approaches to the task at hand.

In this video, our church does a walkthrough of our temporary online production facilities. With strict social distancing protocols, we had to use a combination of on-site and off-site roles as well as creative use of pre-production and post-production to deliver our live stream.

I am interviewed at the 4 minute mark in the video. And, yes, it is possible to serve the community during a pandemic when you are required to be socially distant from other people. Even from a motorcoach.

Home Free

We have our site for the season! We just received this confirmation:

Although we will be closed to recreational camping, we are still able to welcome campers whose full time home is their RV. Barrie KOA Campground will provide a site with electricity and sewer hook-up to self-contained RV Units, with the addition of water after May 1st.

The park will be very, very quiet for the duration of the COVID-19 social distancing protocols. The family area of the park will be closed to recreational stays. The adult park will likely hold a dozen or two RVs. There are not that many Canadians full-timing.

I look forward to having full services for our coach and I look forward to having our patio furniture back. I’m relieved that the uncertainty around where we would live for our time in Canada has been resolved.

Come October we will need to make our way south. Will our civil rights still be limited? Will the border be open to Canadians to enter the United States?

One day at a time.

We have our site for the season.

A good day.

Should I Stay Or Should I Go Now?

Should I stay or should I go now?
Should I stay or should I go now?
If I go, there will be trouble
And if I stay it will be double
So come on and let me know

the Clash

Since the COVID-19 transformed into global pandemic, I sing this song every morning usually after I read the news. That is when I start to panic. And I think we need to leave Florida and return to Canada RIGHT NOW!

Should I stay or should I go now?

We are isolated here. Very few people at our resort. Aside from a couple of bike rides in the immediate area, I haven’t been out of the property for over a week. No symptoms. We feel safe. It is sunny and it is warm. Not a bad spot to stay in place.

And the views from the front of our coach make it hard to think about leaving Myakka River Motorcoach Resort for the cold and wintery conditions in Ontario. Especially knowing that we will need to spend two weeks completely isolated whenever we do cross the border.

The clock is ticking mind you. Our health care coverage expires May 1st. Our 180 days to be in the United States is up on April 28th. We will need to be leaving here within three weeks.

Should I stay or should I go now?

Our Minister of Health is asking for our help when we return. She has a pleasant way of wording things.

Health Minister Patty Hajdu says she’s looking at the option of criminal penalties for Canadian travellers who don’t follow the government’s advice to self-isolate when they return home.

“Let me be perfectly clear. We will use every measure in our tool box at the federal level to ensure compliance … we have measures that could include monetary penalties up to and including criminal penalties,” she said during her daily briefing on Parliament Hill.

“When we say that you must stay at home for 14 days, that means you stay at home for 14 days. You do not stop for groceries, that you do not go visit your neighbours or your friends, that you rest in your house for 14 days. No exceptions.”

The Quarantine Act, which was updated in 2005 after the deadly SARS outbreak, gives the federal health minister the power to designate quarantine zones and fine or jail travellers who disobey quarantine requests.

When I highlighted a concern about government surveillance in this recent post, well, look at what is already taking place in Canada and the United States.

But Forest said [Canada] evoking the Emergencies Act could also allow for more extensive data sharing, including tracing data using smartphone location data. The Washington Post reported last week that the U.S. government is in talks with Facebook, Google and other tech companies about using location data gleaned from mobile phones, including whether people are keeping a safe distance, raising serious questions around privacy. Israel’s government has already approved emergency measures to track people suspected, or confirmed to be infected with monitoring their cellphones, and a mobile-phone based “electronic fence” to keep people quarantined in their homes is one of the measures behind Taiwan’s lauded success in controlling the novel coronavirus.

“There is a lot of pressure on the ground at this moment for tracing purposes if we were able to access the data that not only the carrier but some of the private sector owns,” said Forest, who said he is hearing that some provinces and public health authorities are already trying to negotiate separate deals. “It will be so much better if it was done at a national level.”

“If I were able to have access to your cellphone I will be able to know who you have seen,” he said. “So, if you’re on the isolation list I could know if you had continued meeting people. Or if you’re a confirmed case I could trace by your GPS history where you have been and who you have seen.”

Awesome. Suspend civil liberties. Spy on citizens. All for a worthy cause no doubt. As my financial advisor told me this morning:

In wars, truth is the first casualty. This is war.

No wonder people are fussed. The news is an endless torrent of medical negativity, while common sense tells us the greatest damage to the largest number will be economic. Not sickness. Not death. But job loss on a Biblical scale. In the overall population, the number of infected is tiny. However this has caused a global meltdown. Civil liberties are being stripped away. Citizens have turned into social distance warriors and shamers. National and provincial borders have hardened. I hear people in my little town asking for road blockades. What a shame.

Government intervention to an unprecedented level in my lifetime. I do hope it is worth the carnage.

Should I go or should I stay now?

There is an upside to the social distancing what with most everything shut down. I am learning new skills. What might those new skills be you ask?

Just look at me.

Check out that hairstyle! For the first time in my adult life, I cut my own hair. With some help from Lorraine. It wasn’t that hard to do. I ordered clippers and scissors from Amazon — delivered next day to our site — reviewed a few how-to videos on YouTube and there you have it. A reasonably well-groomed COVID-19 avoider.

Here is the video I followed in case your barbershop is closed or you have been placed into isolation and your hair is getting a bit out of control.

The pandemic in the United States and Canada could well reach epic proportions in the next three weeks. There could be bans on travel. Roadblocks at state and provincial borders. Forced quarantines for travellers returning to Canada in military bases. Martial law. Curfews. Imprisonment for those foolish enough to take their dog for a walk while under orders to remain inside.

What was unthinkable even a few days ago seems probable and even inevitable.

Should I stay or should I go now?

Can’t get that darn song out of my head.