BirdTalk Dear Bird Talk, Just spent our first winter in Florida and left for home on March 31. Traffic leaving Florida on I-75 was extremely heavy and we were wondering if this was because we left on the last day of the month? If so, we may change our plan next year. Does anyone have more experience in this area that they can share? Marilyn Anderson Mitchell, ON Ed.: Change your plan for next year. The end of February, but especially the end of March and April are when hundreds of thousands of snowbirds are heading north, back to Canada and to their homes in the northern United States. Many rent by the month and these rentals usually run from the first of the month to the end of the month and, when finished, they all head home at the same time. I would leave three or four days after the end of any month, if that is convenient for you. Dear Bird Talk, Any further information about a rumour that Canadians who have property in the U.S. and stay for longer than four months in a calendar year are deemed to pay income tax, the same as an American citizen would? Also, any news about the visitor visa for Canadian seniors? Stan Smith Toronto, ON Ed.: Nonsense! Don’t believe any of these rumours. You can simply call the CSA lines and they will give you the real facts about most things and can provide an update regarding the snowbird visa, but that is already addressed later in this issue. Make sure that you file that 8840 form, every year. Dear Bird Talk, I recently read an article where a Canadian couple had to make a significant claim on their travel insurance. The insurance company then went after their in-province insurance company for a good portion of the claim. This reduced the total life claim available from the person’s normal health insurance. If the travel and health insurance companies were the same, it wouldn’t have affected the person’s life amount. This is called subrogation and I wonder if this tactic is used by Medipac? Donald Rose Salt Spring Island, B.C. Ed.: This is not a tactic, but a policy condition. When you buy a travel insurance policy, you assign your rights to the insurance company and they will then seek to recover payments (subrogations) from other insurers and other third parties. I am unaware of any travel policies in which these rights are waived. Medipac has very generous conditions for subrogation and will not subrogate against any amount less than $100,000 of your lifetime maximum. Other insurers may just take it and, in some cases, they may only subrogate over a $50,000 limit. Read your policy carefully! Dear Bird Talk, Would it be possible to file Form 8840 only after the IRS has noticed that you have gone above the 183-day threshold? How are they able to keep track of this? Would it be brought to your attention when you try to cross the border? Drew Bohonos Vancouver, B.C. Ed.: That’s a scary question. First, if you stay for longer than 183 days in the United States in any calendar year, you are considered a U.S. resident and, therefore, are subject to tax on your worldwide income! Period! If you stay for longer than three months per year on a regular basis, they can also deem you to be a U.S. resident for tax purposes. The way to avoid very unpleasant results is to file the Closer Connection Form 8840 by June 15 every year. There have been several cases involving B.C. residents in which hundreds of thousands of dollars became payable in U.S. taxes. Believe me, you do not want anything to be drawn to your attention at the border, and they do know much more than you expect. There is also a new reciprocal arrangement between Canada and the U.S. to share border-crossing data. Big Brother really is watching. 8 | www.snowbirds.org
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