Canadian on an H-1B: Your U.S. Taxes When the Move Might Be Permanent

Canadians usually reach the U.S. on a TN — so when one arrives on an H-1B instead, it's often deliberate: the H-1B is dual-intent, meaning you can openly pursue a green card while holding it. That single feature changes the tax conversation. A TN move might be a three-year adventure; an H-1B move is frequently the first step of a permanent one.

And permanent moves deserve different tax decisions than temporary ones.

Year one looks like every Canadian arrival — do it right

The mechanics of your first year match any Canadian mover:

• You'll meet the Substantial Presence Test with a normal working year, making you a U.S. tax resident on worldwide income (the day-count formula, explained);
• your arrival year is typically dual-status — nonresident before the move, resident after — the most technical personal return you'll file;
• Canada expects a final return with a departure date and levies departure tax, deeming your non-registered investments sold on exit;
• your Canadian accounts trigger FBAR reporting past the $10,000 combined threshold (the full FBAR guide), the RRSP is reportable but treaty-deferred, and the TFSA becomes a U.S. tax problem best resolved before residency begins.

The broader arrival sequence is in I Moved From Canada to the U.S. — How Do I File My Taxes?

What dual intent changes: plan like you're staying

If the green card is the plan, several choices deserve a longer lens:

Cut the Canadian ties cleanly. For a truly temporary stint, some people keep a foot in Canada. On a green-card track, lingering residential ties are a liability — they muddy your departure date, invite the CRA to keep treating you as a resident, and complicate the treaty tie-breaker. A clean, documented exit now saves years of ambiguity.

Deal with the TFSA and taxable investments early. The longer you hold a TFSA as a U.S. resident, the more U.S.-taxable growth and reporting friction accumulates. And Canadian mutual funds held in taxable accounts can fall into the U.S. PFIC regime — one of the most punitive corners of U.S. tax. Restructuring the portfolio around the move, not years after, is dramatically cheaper.

Think ahead to the exit tax — yes, already. Here's the piece nobody mentions at the start: once you hold a green card long enough (roughly 8 of the last 15 years), giving it up later can trigger the U.S. expatriation tax if you're above certain wealth or tax thresholds. That's a distant problem — but it's why "just get the green card, sort taxes later" is backwards. The people who plan the arrival with the whole arc in mind keep their options open at every stage.

FICA, credits, and the everyday stuff

On H-1B payroll you pay Social Security and Medicare from day one; the totalization agreement coordinates those years with CPP so a career split across countries still adds up to retirement credit in the right places. Your U.S. return as a resident works like any American's — worldwide income, foreign tax credits reconciling anything still Canadian-taxed, and the account reporting stack every year.

The H-1B mindset

Treat the tax plan like the visa: built for the long game. The arrivers who struggle are the ones who executed a temporary-move tax strategy and then stayed a decade.

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Related reading: - The Substantial Presence Test Explained - FBAR for Canadians Living in the U.S. - U.S. Taxes for Canadians, by Visa Type: The Complete Guide Hub