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.


The action of confining or state of being confined. Since we returned to Canada on March 26 I have not gone out in our car. I have not been outside the immediate area of our coach save for some short walks. In other words, I have avoided all non-essential travel. Until yesterday.

Yesterday I took a drive to plot a route for cycling and to pick up a replacement for our water hose at Canadian Tire. Essential? Given my current state of mental health, absolutely. Almost two months of house arrest can take a toll.

Things are beginning to open up in Ontario.

From the Government of Ontario’s newsroom:

Private parks and campgrounds may open to enable preparation for the season and to allow access for trailers and recreational vehicles whose owners have a full season contract.

I’m not sure what that statement really means and, based on some of the social media sites I follow, no one else seems to know either. Does allowing access mean that recreational campers with a seasonal contract can enjoy camping for the week-end while those without a seasonal contract are not allowed? Seems to be the case. Does that mean that recreational campers with seasonal contracts can engage in non-essential travel to go to a private campground for a few days? Not at all clear.

There was quite an influx of people that came into their seasonal sites at our park over this long week-end. This despite the Ontario government still urging restrictions on non-essential travel.

Non-essential travel is defined by the government as any travel that is considered tourism or recreational in nature.

So confusing.

Here is what our media told us about non-essential travel over the long week-end:

The Ontario government is urging all residents of that province to stay home whenever possible.

Beyond that, there is no evidence on the province’s website that suggests travel within the province – including to seasonal properties – is in any way limited.

However, Premier Doug Ford has urged cottagers to “hold off” on visiting their properties this weekend after it became clear that many popular cottage communities were uncomfortable with the idea of hosting out-of-town guests.

At this point, it is becoming less and less likely that the overall population will continue to abide with strict confinement protocols. I follow Viva Frie, a Montreal lawyer turned vlogger, and here is one of his tweets from a few days back:

It went from “flatten the curve” to “find a cure”. From “social distancing” to “house arrest”. From “2 weeks” to “3 months”. From “we’re in it together” to “snitch on your neighbors”. From “individual liberty” to “comply or pay fine”. We lost the target. And government knows it.

We have been doing our part to flatten the curve and we will continue to do so however I find much of what comes out from the government to be confusing and contradictory particularly as it relates to the RV community.

Our government keeps telling us that it makes all of these decisions based on science and guidance from medical experts. Likely from this source.

I am curious as to the science behind restricting seasonal campers from going to their sites two weeks ago but allowing them to go now. I am curious as to the science behind allowing a seasonal camper in a self-contained RV to go to a private campground for the long week-end and yet prohibiting a non-seasonal camper with a self-contained RV from doing the exact same thing. I am curious as to the science behind urging people to stay home and yet allowing private campgrounds to provide access for trailers and recreational vehicles whose owners have a full season contract.

There is no science at play here I suspect. Just an arbitrary set of rules and regulations.

The province will continue to reopen gradually and presumably it will continue the process as long as the risk to the population remains manageable.

It was wonderful to see many of our RV friends return to their seasonal sites. Hopefully this will soon be the case for the rest of the RV community.

Coronavirus and Travel in the United States

Get ready for the summer of the RV. This article suggests that an RV could become the primary mode of travel for vacationers and others looking to get away should COVID-19 travel restrictions be lifted.

As the coronavirus continues to wreak havoc on the industry, the demand for travel is slowly—slowly—creeping back up again. But many remain wary of getting on a plane, a train or a cruise ship and being packed tightly in with strangers, never knowing if everybody is going to be wearing a mask, never knowing if somebody is unknowingly carrying the virus, never knowing if a flight is going to be empty enough for social distancing—or perhaps not.

Welcome to what could be the year of the Recreational Vehicle, more commonly known as the beloved RV.

And, according to LCI Industries CEO, Kason Lippert:

RVs and boats provide attractive alternatives to vacation more safely as families are eager to get out of the house. At the same time, RVing and boating offer a great solution to social distancing for families that want to travel the country and experience the great outdoors. Air travel, cruise ships and hotels are likely going to be less popular, at least in the near term. As a result, the outdoor recreational products business is expected to accelerate.

Craig Kirby, President of the RVIA, had this to say:

After an indeterminate period of isolation, we believe families will be more enthusiastic than ever to get outside and see new places, even within their own states. RV travel allows people to sleep in their own bed, cook gourmet meals, and control where they go. Once federal and state restrictions are lifted, they’ll be able to experience the endless range of outdoor wonders throughout the country and the freedom of independent travel that RVs offer. This includes the option to forego a campground since RVs have everything a family needs to camp remotely.

Based on all of this, we should see RV parks overflowing with new campers this summer. The shoulder-to-shoulder practice of jamming RVs together in some RV campgrounds might get even worse than this one:

An isolated, wilderness location would be a far more suitable destination than many commercial RV campgrounds.

What does the CDC have to say about travel right now?

CDC recommends you stay home as much as possible, especially if your trip is not essential, and practice social distancing especially if you are at higher risk of severe illness. Don’t travel if you are sick or travel with someone who is sick.

The CDC is thoughtful enough to make a comment about the risk of traveling in an RV during a global pandemic:

If you must travel, consider the following risks you might face, depending on what type of travel you are planning:
Air travel: Because of how air circulates and is filtered on airplanes, most viruses and other germs do not spread easily on flights. However, there may be a risk of getting COVID-19 on crowded flights if there are other travelers on board with COVID-19.
Bus or train travel: Sitting or standing within 6 feet of others for a prolonged period of time can put you at risk of getting or spreading COVID-19.
Car travel: The stops you need to make along the way could put you and others in the car with you in close contact with others who could be infected.
RV travel: Traveling by RV means you may have to stop less often for food or bathrooms, but RV travelers typically have to stop at RV parks overnight and other public places to get gas and supplies. These stops may put you and those with you in the RV in close contact with others who could be infected.

We will wait it out and avoid any travel in our motorcoach until, hopefully, the fall.

No Quick Recovery

A quick recovery? Back to normal in another few weeks? I remember having this debate with a few of my friends in Florida back in the early days of the pandemic. The thought was that the economic damage would be short-lived and a full recovery would happen within a quarter or two. I was not that optimistic. And I see nothing that suggests our lives will be returning to normal anytime soon.

From TheStreet:

Federal Reserve Chairman Jerome Powell said the pace and scope of the current U.S. economic downturn are ‘without precedent” and cautioned that recovery could take longer than expected to gather momentum.

“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II. We are seeing a severe decline in economic activity and in employment, and already the job gains of the past decade have been erased,” Powell said. “Since the pandemic arrived in force just two months ago, more than 20 million people have lost their jobs.”

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” Powell added.

Brett Davis, CEO of National Indoor RV Centers, posted a video a few weeks back where he provided his perspective on the state of the RV industry. The video is long but worth the watch if you have an interest. Here is what he had to say about the market:

With our economy completely shutdown for the month of April and then reopening of America to come in three phases over time I suspect the second quarter earnings and beyond to be awful. Every investor and fund manager will begin to wonder and worry about where the bottom will be for earnings. No one will want to try and catch a falling knife. I do not believe we have seen the bottom in this stock market.

Winnebago announced a resumption of operations which you can read in full here. However, there is a disclaimer:

Since the beginning of the COVID-19 crisis, Winnebago Industries has implemented significant cost containment and financial management measures and will continue to do so as conditions require.

While we closely monitor community conditions related to the pandemic and track consumer appetite for our products and outdoor activity, our organization will continue to make necessary and critical decisions around expense management, capital deployment, and strategic product development that will ensure our long-term financial stability and position our incredible team to compete successfully in the future. We remain convinced that the powerful appeal of the outdoors will endure through these uncertain times and end consumers will increasingly be attracted to the RVing and boating lifestyle.

The great financial collapse was a severe financial crisis that caused a deep and painful recession. Technically the recession ran from December 2007 until June 2009. It took many years for the economy to recover to pre-crisis levels of employment and output. The great financial collapse was a result of financial imbalances that had started primarily in the housing sector. A very different class of economic recession than what we now face.

Financial policy makers are preparing for the possibility of a far deeper, more protracted downturn. A quick recovery is unlikely. I get concerned when the chairman of the Federal Reserve characterizes the pace and scope of the current downturn as being without precedent. That does not sound very encouraging does it?

Eventually we will see things turn around. But it won’t be this month. Or next. It may take years.

Today I began looking at properties to rent. Perhaps the border will reopen for snowbirds in the fall. Given all that is going on, it seems prudent to consider alternatives.

Just in case there is a second wave coming.


Don’t Worry It Will Be Awesome

Optimistic? Pessimistic? Pragmatic? Yesterday I had posted about the future of the RV industry. You can read that post here. My final observation, one that I think will hold true for the foreseeable future, was uncertainty:

Governments, industries and consumers will have to grapple with the challenge of acceptable infection and death rates against resumption of traditional social and business activities. My sense is that no one really knows what to do with COVID-19 and we are all captive to a range of experiments from shutting down the economy to restricting civil liberties.

If you are uncertain about your future, you tend to stay home, to seek a safe harbour. Even if you are inherently adventurous. All forms of travel are likely to be avoided for some time.

That is not Garry Enyart’s view. Garry is the chairman of the Recreational Vehicle Industry Association and, not surprisingly, he is pushing the narrative that the future of RV sales is very positive. People will still want to travel just not on airplanes and cruise ships. Instead, they will want to take road trips in RVs. Safe, self-contained RVs.

I’ve included his full letter below. It is an interesting perspective and I do not blame him for being optimistic. Realistically the road to recovery will be a challenging one for the RV industry. The entire travel industry is in crisis.

Alarming initial statistics reflecting the massive loss of employment and revenue in the U.S. travel industry in the wake of the COVID-19 pandemic have only gotten worse, according to Roger Dow, president of U.S. Travel Association.

  • The economic impact on the travel industry from COVID-19 will be nine times greater than 9/11.
  • By the end of April declines in travel will cause 8 million jobs to be lost out of approximately 24 million for the entire U.S. economy—a third of all the jobs lost in the U.S.
  • Travel spending losses are on track to top half a trillion dollars by the end of 2020.
  • 90% of travelers surveyed had some type of travel or travel-related activity planned prior to the COVID-19 outbreak and 80% of those either canceled or postponed those plans, according to survey data from MMGY Travel Intelligence.

You can read the 14-page report, The Impact of COVID-19 on the United States Travel Economy, over here.

Most of the online full-timers I follow have planted for the time being to ride out the COVID-19 storm. Some have even decided to abandon the lifestyle. We are staying firm for now despite all of the uncertainty. We hope to return south in the fall. But comments like this one from the premier of our province are not encouraging:

TORONTO — Premier Doug Ford says he’s adamant he doesn’t want the border with the United States to reopen and has also urged people from other provinces in Canada to stay away from Ontario.

Speaking to reporters at Queen’s Park on Friday, Ford said the topic of the Canada-U.S. border came up on a call on Thursday with the country’s premiers and Prime Minister Justin Trudeau.

“I was adamant on the call yesterday with the premiers and the prime minister, I do not want those borders open,” Ford said.

Garry’s perspective on the future of the RV industry is vastly more credible than mine however no one knows with any degree of certainty where things might land over the next year or two.

Here is Garry’s letter of encouragement.

Dear Valued RV Industry Association Member,

Since March 20th the RV Industry Association, RV Dealers Association and the National Association of RV Parks and Campgrounds have been meeting every other workday to discuss issues related to our industry as we navigate the COVID-19 pandemic. These collaborative efforts made a monumental difference in mitigating the affects felt throughout the industry through coordinating efforts to give many RV businesses and campgrounds the option to remain open as “essential businesses.”

Recently, to prepare for a staged reopening of our industry, this group broadened with additional participants including OEM manufacturers, dealers, suppliers, wholesalers, rental operators, and finance companies. Together, we have shared what is happening on the ground at our respective businesses and together we have navigated public and legislative affairs at the federal and state level and in some cases, county levels. Lately, these efforts have been focused on opening or keeping open campgrounds across the country. On Tuesday, the group coordinated an effort in California that has led to over 5,000 letters written to the Governor to urge the opening of campgrounds with other low-risk places that can promote social distancing. And today, the RV Industry Association coordinated a call with Indiana Senator Todd Young and several key industry executives to continue to advocate on behalf on an industry that is so critical to the Indiana economy.

The data is coming in and we are starting to see green shoots. According to the Harris Poll COVID-19 Survey, exploring the outdoors while staying closer to home through road trips is becoming a consistent desire. Americans are now nearly twice as likely to be considering a car purchase than five weeks ago and over the same time period, vacation planning is up nearly ten percentage points. Based on the early data from polls as well what we’re hearing from dealers and campgrounds, road trips over long haul flights and nature and wilderness over urban destinations looks to be the summer trend.

What started as concern for the unknown has turned into a huge opportunity for the RV industry. We must capture the hearts of weary Americans looking to get out and see everything the outdoors has to offer. Our products help provide travelers with the ultimate control of their vacation, allowing people to travel where they want, when they want, and offer a unique experience that allows us to pursue our favorite activities, and stay connecting with family and friends while continuing to practice social distancing. Go RVing, the industry’s national promotional platform designed to attract more consumers to RVing, and highlight dealer showrooms across America, will drive this home through media campaigns highlighting the joy of camping and RVs.

Now is the time to usher in a whole new generation of outdoor recreation enthusiasts to the ranks of RV owners. They will surely experience what we all know and love, an active outdoor lifestyle afforded by vehicle-supported adventure.

I could not be more excited for the opportunities that lay ahead for our industry.

Take care,

Garry Enyart
Chairman, RV Industry Association