CANADIAN SNOWBIRD TAX SERIES

This article is general educational information about US tax residency, cross-border estate exposure, and the Canada-US tax treaty. It is not tax, legal, or investment advice. The day-count rules below are unforgiving and largely mechanical — the IRS does not care what you intended — and several of the mistakes described here cannot be undone after the fact. Confirm your own situation with a cross-border advisor qualified in both countries before acting.

By Lucas Wennersten, CFP® (US & Canada), CFA · 14-minute read

Four months a year is not the safe number you think it is

Ask a room of Canadian snowbirds how long they can stay in the US and most will give you some version of the same answer: under six months, or under 183 days. It is the most repeated number in snowbird planning and it is wrong often enough to be dangerous.

Here is the arithmetic that actually governs your status. A Canadian who spends 122 days — four months, the classic January-through-April winter — in Arizona or Florida every year, the same predictable trip with no change in behaviour at all, reaches exactly 183 weighted days in year three. Exactly the threshold. They have met the Substantial Presence Test and are, by default, a US tax resident, liable for US tax on their worldwide income and potentially required to report every Canadian bank account they hold.

Spend 120 days instead and the same three-year math lands on 180. Comfortably clear. Two days of difference, repeated annually, separates a nonresident from a US tax resident. That is the actual margin, and almost nobody who winters south is tracking it that closely.

A note on what this guide is not about. The question of how many days you are permitted to be in the US is an immigration question — admission periods, visitor status, and the consequences of overstaying — and we cover it separately in How Long Can a Canadian Stay in the United States?. This guide is about what happens to your taxes once you are there. The two run on different clocks, and conflating them is where most snowbird planning goes wrong. For the broader planning context, see our work in cross-border tax planning.

The Substantial Presence Test: how the count actually works

The Substantial Presence Test comes from Internal Revenue Code §7701(b). It is mechanical. It does not weigh your intent, your Canadian citizenship, your provincial health card, or the fact that you have a home in Calgary you consider your only real home. It counts days.

You meet the test for a given year if both conditions hold:

1. You were physically present in the US for at least 31 days during the current year, and
2. The weighted three-year total reaches 183 days or more, calculated as: all days present in the current year, plus one-third of the days in the first preceding year, plus one-sixth of the days in the second preceding year.

The weighting is the part that catches people. A single year of four months looks harmless in isolation. It is the accumulation across three rolling years that crosses the line, which means the snowbird who has settled into a comfortable, unchanging annual routine is precisely the person most likely to trip it without noticing.

Days that do not count

Not every day of physical presence is a countable day. The exclusions are narrow but they matter, and they are frequently missed in both directions — people forget to exclude days they could have, and people wrongly assume exclusions that do not apply to them.

• Days you were unable to leave because of a medical condition that arose while you were in the US. A condition you brought with you does not qualify. Claiming this requires Form 8843.
• Days you commuted regularly from Canada for work, under the regular commuter rule.
• Days in transit through the US, where you were present for less than 24 hours travelling between two other points.
• Days as an exempt individual — certain visa categories. This rarely applies to retirees.

Note what is absent from that list: there is no exclusion for owning a home, for having family in the US, for holding a valid B-2 visitor status, or for believing yourself to be a tourist. Those things may help you claim an exception later. They do not remove days from the count.

Canada counts residency differently, which is where advice goes wrong

This is one of the places where generic online guidance most reliably misleads, and it is worth stating plainly. The US uses a day count. Canada does not.

The Canada Revenue Agency determines residency primarily by residential ties — where your home is, where your spouse and dependants live, your driver’s licence, health coverage, bank accounts, social memberships. A Canadian snowbird who keeps a house in Ontario, a spouse at home, and an OHIP card does not stop being a Canadian tax resident merely by spending months in Phoenix.

The practical consequence is that you can be a tax resident of both countries at once. That is not an error state; it is a common and expected outcome, and it is exactly the situation the treaty exists to resolve. But it means “I am a Canadian resident, so the IRS has no claim on me” is not a defence. Both systems can reach you simultaneously, and the tie-breaker has to be claimed properly rather than assumed.

The closer connection exception, and where it stops being available

Meeting the Substantial Presence Test is not the end of the story. If you were present in the US for fewer than 183 days in the current year and you can establish a closer connection to Canada than to the US, you may still be treated as a nonresident. This is claimed on Form 8840, and the filing itself is covered in Form 8840 & the Closer Connection Exception.

Establishing the closer connection means demonstrating that your centre of life remains in Canada — permanent home, family, personal belongings, banking, driver’s licence, voter registration, the jurisdiction where you file. The form asks for this directly.

Two limits deserve emphasis, because they are where people get caught.

The 183-day current-year ceiling is absolute. If you spent 183 or more days in the US in the current year alone, the closer connection exception is not available to you at all, no matter how strong your Canadian ties. At that point your only route to nonresident treatment is the treaty tie-breaker under Article IV of the Canada-United States Tax Convention, claimed on a US return with a treaty-based position disclosure on Form 8833. That is a materially more involved filing, and it puts you into the US tax system rather than keeping you out of it.

Form 8840 has a filing deadline, and it is not automatic. The exception is claimed, not assumed. Filing late or not at all gives the IRS grounds to disallow it. Because the deadline depends on whether you are otherwise required to file a US return, confirm your specific date with a cross-border preparer rather than relying on a general rule of thumb.

Keep your own records. Pull your official entry and exit history from CBP I-94 Travel Records — this is the same data the government can consult if your day count is ever questioned, and reconstructing three years from memory in April is how errors enter.

US estate tax: the exposure nobody mentions at the clubhouse

The residency question is annual and recoverable. This one is not, and it is the reason estate planning belongs in a snowbird conversation at all.

A Canadian who is a nonresident alien for US estate tax purposes is exempt on only the first US$60,000 of US-situs assets. That figure has not been adjusted in decades. It is not the multi-million-dollar exemption you have read about — that one belongs to US citizens and domiciliaries, and it does not reach a Canadian’s US-situs estate on its own. For how the current US estate tax law affects larger estates specifically, see U.S. estate tax for high-net-worth Canadians.

For a snowbird with a US$700,000 place in Scottsdale, that gap is not theoretical.

What counts as US-situs property

• US real estate. The condo, the house, the lot. This is the big one for snowbirds.
• Shares of US corporations, regardless of where the shares are held or what currency the account is in. A US stock in a Canadian brokerage account is still US-situs for estate purposes.
• Tangible personal property located in the US — the car in the garage, furnishings, art.

And what generally is not: Canadian real estate, shares of Canadian corporations, and — importantly — US bank deposits not connected with a US trade or business. The characterisation is not intuitive, and the difference between a US stock and a US bank deposit is the difference between exposure and none.

What the treaty does about it

Article XXIX-B of the Canada-US treaty provides meaningful relief. In broad terms, it allows a Canadian estate to claim a pro-rated share of the much larger unified credit available to US persons, based on the ratio of US-situs assets to the worldwide estate. For most snowbirds whose US property is a modest fraction of their total net worth, this relief is substantial and often eliminates the tax entirely. How the relief is calculated and claimed is covered in Article XXIX-B Estate Tax Relief.

But it has to be claimed. Relief under the treaty is asserted on a timely-filed Form 706-NA — the US estate tax return for a nonresident who is not a US citizen — by an executor who knows the return is required in the first place. That is the failure mode: not that the tax is owed, but that a grieving family in Vancouver does not know a US filing obligation exists until penalties have accrued. The return itself is walked through in Form 706-NA for Canadians.

Some owners address the exposure structurally rather than relying on treaty relief alone — the trade-offs are set out in Holding U.S. Property Through a Holdco. If you hold US property, our cross-border estate planning work starts here.

Selling the property is its own event

Snowbirds who decide to exit US real estate encounter a separate rule at the closing table. Under FIRPTA withholding, the buyer is generally required to withhold a percentage of the gross sale price — not the gain, the gross price — when purchasing US real property from a foreign person. The withholding is remitted on Form 8288.

Withholding on gross proceeds means that on a property that has barely appreciated, the amount withheld can substantially exceed the actual tax owed. It is recoverable by filing a US return, but that is a refund cycle measured in many months, and it is cash you do not have during it. A reduced-withholding certificate can be requested in advance on Form 8288-B — but it must be applied for before closing. After the fact is too late.

Reporting: two governments, two directions

If you do become a US tax resident without successfully claiming an exception, reporting obligations follow — and they run in both directions at once.

	FBAR (FinCEN Form 114)	T1135 (CRA)
Who files	US persons and US tax residents	Canadian residents
Reports	Foreign (Canadian) financial accounts	Specified foreign property
Threshold	US$10,000 aggregate, at any point in the year	CA$100,000 cost amount
Filed with	FinCEN — separate from your tax return	With your T1
Penalty exposure	Severe, and harsher still if wilful	Significant, per-year

The threshold on the US side deserves a second look: US$10,000 aggregate, at any point during the year. Not year-end. Not per account. If your Canadian chequing, savings, and investment accounts together touched that figure for a single day, the obligation is triggered. For anyone with an ordinary Canadian financial life, that threshold is met permanently.

Both filings can apply in the same year to the same person. See FinCEN Form 114 and Form T1135 in our forms hub, along with Form 8938 on the US side and Form T2209 for the Canadian foreign tax credit. The government pages themselves are FinCEN Form 114 – Report of Foreign Bank Accounts (FBAR) and CRA Form T1135 – Foreign Income Verification.

The healthcare clock is a different clock

Every province sets its own minimum physical-presence requirement to maintain provincial health coverage. These thresholds are established independently by each province, they differ from one another, and — this is the part that causes real damage — none of them is the same number as the IRS Substantial Presence Test.

The failure mode is specific and common: a snowbird optimises their travel carefully against the US day count, feels confident they have planned properly, and discovers on returning home that they have broken their provincial residency requirement and lost coverage. They tracked a number diligently. It was the wrong number.

Because provincial rules change and vary, confirm your own province’s current requirement directly with its ministry of health before you finalise a wintering schedule. Do not carry over a figure a friend in another province quoted you. Coverage gaps, travel insurance, and the Medicare question are covered in Snowbird Healthcare Coverage.

A worked example: the same trip, three years running

Consider two Canadians who both winter in Arizona and believe they are doing the same thing.

Margaret flies down after New Year’s and returns in early May — 122 days, every year, the same pattern. In year one she is at 122 weighted days, well clear. In year two she is at 163. In year three the count is 122 + 40.7 + 20.3, which is exactly 183. She has met the Substantial Presence Test. She was present fewer than 183 days in the current year, so the closer connection exception is available — but only if she files Form 8840, on time, every year from here forward. She has never heard of the form.

David flies down mid-January and returns at the end of April — 120 days, every year. His year-three count is 180. He has not met the test and has no filing obligation at all.

Two days a year. Same destination, same lifestyle, same assumptions. One of them now has an annual US filing requirement and, if she misses it, a plausible path to being treated as a US tax resident on her worldwide income. The other has nothing to do.

The variable that decided it was not wealth, or property, or intent. It was arithmetic nobody was tracking.

A sequencing checklist for the season

1. Before you book: pull your I-94 history and calculate the weighted three-year count including the trip you are about to take. Do this before flights are non-refundable, not after.
2. Decide your day budget for the year and write it down. Treat it as a hard constraint, the way you would a spending limit.
3. Log days as you go. A recurring calendar entry is enough, or use our free 49th Parallel Day Tracker (Android), which keeps the running weighted count for you. Reconstruction from memory is where errors originate.
4. Determine whether Form 8840 is required for the year, and confirm the filing deadline that applies to your circumstances.
5. Inventory your US-situs assets — real estate, US shares wherever held, tangible property — and total them. If the figure exceeds US$60,000, your estate has a Form 706-NA question to answer.
6. Confirm your provincial health minimum directly with your ministry of health, separately from the US count.
7. If you are selling US property, address FIRPTA withholding before closing, not at it.
8. Tell your executor. The estate exposure only becomes a crisis when nobody knew to look for it.

Steps 1 and 8 are the ones most often skipped, and both are free.

Six mistakes we see most

• Trusting the 183-day rule of thumb. The threshold is a weighted three-year figure, not a single-year count. Four months annually reaches it.
• Assuming Canadian residency is a shield. Canada uses residential ties and the US uses days. Both can claim you at once; the treaty resolves it, but only if claimed.
• Not filing Form 8840. The closer connection exception is claimed, not automatic. Silence is not a position.
• Believing the large estate exemption applies. A nonresident alien gets US$60,000 on US-situs assets. The larger figure belongs to US persons.
• Confusing the health-coverage clock with the tax clock. Different numbers, different authorities, both consequential.
• Treating a US stock in a Canadian account as Canadian. For estate situs, what matters is where the issuer is, not where the account is.

Frequently asked questions

How many days can a Canadian stay in the US without becoming a tax resident?

There is no single number, because the test is weighted across three years. You meet the Substantial Presence Test if you were present at least 31 days this year and the total of this year’s days, plus one-third of last year’s, plus one-sixth of the year before, reaches 183. Roughly 120 days a year is sustainable indefinitely; 122 days a year reaches the threshold in year three.

Does the 183-day rule mean I am safe under six months?

No, and this is the most common misconception in snowbird planning. Being under 183 days in the current year keeps the closer connection exception available to you, which is valuable. It does not by itself keep you from meeting the Substantial Presence Test, because that test counts prior years too.

Do I have to file anything if I qualify for the closer connection exception?

Generally yes — Form 8840, the Closer Connection Exception Statement for Aliens. It does not create a US tax liability by itself; it is a protective filing that preserves your nonresident status. The exception must be claimed rather than assumed.

Can I still claim closer connection if I was in the US more than 183 days this year?

No. The closer connection exception is unavailable once current-year presence reaches 183 days, regardless of how strong your Canadian ties are. At that point the only route to nonresident treatment is the treaty tie-breaker under Article IV, which is a more involved filing made on a US return.

Does owning a home in Florida or Arizona create US estate tax exposure?

Yes. US real estate is a US-situs asset, and a Canadian nonresident alien is exempt on only the first US$60,000 of US-situs assets. The Canada-US treaty can provide substantial relief through a pro-rated unified credit, but it must be claimed on a timely-filed Form 706-NA.

Is the large US estate tax exemption available to Canadians?

Not directly. The multi-million-dollar exemption applies to US citizens and domiciliaries. A Canadian resident who is a nonresident alien for estate tax purposes starts from US$60,000 on US-situs assets, with treaty relief available on top of that if properly claimed.

Do I need to report my Canadian bank accounts to the IRS?

Only if you are a US person or US tax resident. If so, and your foreign accounts together exceeded US$10,000 at any point during the year, an FBAR — FinCEN Form 114 — is required. It is filed with FinCEN separately from any income tax return.

What is the difference between FBAR and T1135?

FBAR is the US requirement for US persons holding foreign accounts above US$10,000 aggregate. T1135 is the Canadian mirror image, required of Canadian residents holding specified foreign property above CA$100,000 in cost amount. A person with ambiguous residency can owe both in the same year.

Will I lose my provincial health coverage if I stay away too long?

Possibly. Each province sets its own minimum presence requirement, and none of them matches the IRS day count. Because these rules vary by province and change over time, confirm your specific province’s current requirement directly with its ministry of health rather than relying on a general figure.

What happens when I sell my US property?

FIRPTA withholding generally applies, requiring the buyer to withhold a percentage of the gross sale price — not the gain — when buying from a foreign person. Because it applies to gross proceeds, the withheld amount can exceed the actual tax owed. A reduced-withholding certificate can be requested on Form 8288-B, but only before closing.

Which forms do snowbirds actually need?

It depends on your day count and your assets, but the recurring ones are Form 8840 for the closer connection exception, Form 8843 if you are excluding days, FinCEN Form 114 for foreign accounts, Form 8938 above the FATCA thresholds, T1135 on the Canadian side, and Form 706-NA for an estate holding US-situs assets. All of them, with links to the current government versions, are in our cross-border tax forms hub.

Is there an easier way to track my days?

Yes. Our free 49th Parallel Day Tracker app logs each day of US presence and maintains the running weighted three-year total, so the figure is there when you need it rather than reconstructed from memory at filing time. It is available for iPhone and Android. The app keeps a record of days counted; it does not determine your tax residency or replace advice on what the count means for you.

Where do I start if I have never tracked my days?

Pull your I-94 travel history from CBP, reconstruct the last three years, and run the weighted calculation before making any further travel plans. That single step resolves most of the uncertainty snowbirds carry into filing season, and it costs nothing.

More from the Canadian Snowbird Tax Series

This guide is the hub. Each post below goes deeper on one piece of the picture:

• Form 8840 & the Closer Connection Exception — establishing the exception, and filing it on time
• Article XXIX-B Estate Tax Relief — how the treaty reduces the bill
• Form 706-NA for Canadians — the return itself, and its deadline
• Holding U.S. Property Through a Holdco — structures, and what they cost you
• Snowbird Healthcare Coverage — the provincial clock, province by province
• Canada-to-Arizona Relocation — when the winter stay becomes a move

Every form named across this series is collected, with links to the current government version, in our cross-border tax forms hub.

Most snowbird tax problems are not caused by aggressive planning. They are caused by an unexamined assumption carried forward for years — a day count nobody ran, a form nobody knew about, a property nobody told the executor about. Our cross-border financial planning work starts by counting what is actually there.

If you do not know where your three-year day count stands, that is the first thing to fix — and it takes an afternoon. Book a complimentary consultation and we will run your numbers, review your US-situs exposure, and tell you plainly whether you have a problem or peace of mind.