Canadian on a TN Visa: How Your U.S. Taxes Actually Work

The TN is the fastest door into U.S. work for Canadians — often approved at the border the same day. And that speed is exactly the problem: many TN professionals are living in the U.S. within weeks of accepting an offer, with no one having said a word about what just happened to their taxes. Two countries now have a claim on your year, and the rules for splitting it are nothing like a normal Canadian return.

Here's the map.

Your visa doesn't decide your tax residency — your days do

A common TN misconception: "I'm a nonimmigrant, so I'm not a U.S. tax resident." Immigration status and tax residency are separate systems. For tax, the IRS mostly cares about the Substantial Presence Test — a weighted day-count formula. Work a normal TN year on U.S. soil and you'll meet it easily, making you a U.S. tax resident taxed on worldwide income, TN or not. (The formula, with worked examples, is in our Substantial Presence Test guide.)

31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that

The year you move is a dual-status year

Move mid-year and you're typically a dual-status taxpayer: a nonresident of the U.S. for the part of the year before you arrived, a resident after. Dual-status returns have their own quirks — you generally can't use the standard deduction, and filing jointly is restricted unless you make specific elections. Some arrivers benefit from electing full-year treatment; some don't. It's the single most technical return of your U.S. life, and it's the one people try to do in TurboTax.

Canada wants a proper goodbye

Leaving Canada isn't just packing. If you sever residential ties, you become an emigrant in Canada's eyes, and that triggers:

• a final Canadian return with a departure date,
• departure tax — Canada deems most non-registered investments sold the day you leave, taxing the built-in gains even though you sold nothing, and
• Form T1161 listing property you took with you, if over the threshold.

Timing matters enormously here. Realizing losses, crystallizing gains, or adjusting holdings before the departure date can change the bill.

The accounts you left behind become U.S. paperwork

Your Canadian chequing account, RRSP, and TFSA don't care that you moved — but the U.S. Treasury does:

• FBAR (FinCEN 114): required once your combined Canadian accounts top $10,000 USD at any point in the year. Penalties for missing it are brutal. (Full FBAR guide here.)
• RRSP: the treaty lets you defer U.S. tax on internal growth — good news — but the account is still reportable.
• TFSA: the U.S. doesn't recognize its tax-free status. Growth is taxable in the U.S., and the account can drag in trust reporting. Many TN arrivers are told to consider closing it before establishing U.S. residency; that's a conversation to have before the move, not after.

Payroll and the small stuff

You'll be on a U.S. W-2 with Social Security and Medicare withheld — and thanks to the U.S.–Canada totalization agreement, those contributions coordinate with CPP instead of double-charging you. If your employer reimbursed moving costs, expect most of it to be taxable income federally. And if you kept Canadian rental property or investment income, it stays in the picture on both sides, with treaty relief doing the reconciling.

The order of operations matters

The mistakes we see aren't exotic — they're sequencing. People file a normal Canadian return with no departure date, skip the FBAR because nobody mentioned it, keep contributing to a TFSA from Florida, and file a plain 1040 in a dual-status year. Each is fixable; all are avoidable.

---

Related reading: - I Moved From Canada to the U.S. — How Do I File My Taxes? - FBAR for Canadians Living in the U.S. - U.S. Taxes for Canadians, by Visa Type: The Complete Guide Hub