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Whether it is a permanent stay or just a winter get-away, many Canadians find themselves enjoying retirement south of the border.

Canadian retirees often seek warmer climates by taking extended vacations south of the border in many different areas of the United States. While this may be a great way to enjoy the best of both countries, it is important that you understand how each country’s rules will apply to your situation.

The following is an overview designed to help you plan your extended vacations, however it should not substitute for getting information from official government sources. Links throughout the article will help you find some helpful U.S. and Canadian resources.

1. Entry and Exit Requirements

Though Canada and the United States are friendly neighbors, there are several rules and requirements for passing in and out of each country. This is particularly true for Canadians who take extended vacations in the United States. These requirements are subject to change at any time, so you should always check for up-to-date information before each trip. You can find more information online with Foreign Affairs and International Trade Canada’s Travel Report for the U.S.

The travel documentation you will need when crossing the border depends on your mode of transit. There are different requirements for traveling by land, air or water. There is a U.S. law known as the Western Hemisphere Travel Initiative (WHTI) which requires visitors to present a valid passport, or other accepted form of identification when entering the United States. You can read more about WHTI requirements by visiting the Canada Border Services Agency online.

At the end of your extended vacation, you will also need certain documentation when you return home to Canada. The requirements for Canadians returning home can also be found online or by contacting the Canada Border Services Agency.

2. Security Screening

The U.S. Department of Homeland Security has tightened border security, and this affects many aspects of travel. When traveling into the United States, you, and your possessions, may be subject to search, particularly when flying. For tips on how to travel into the U.S. safely, you can find advice for travelers online through the U.S. Transportation Security Administration (TSA). This will also help you understand what procedures to expect when passing through security checkpoints.

3. U.S. Tax Laws for Canadian Snowbirds

Canada allows residents to vacation in the United States for up to six months, and extensions may be possible if you apply through your nearest U.S. Citizenship and Immigration Office during your stay. However, Canadian snowbirds have to be careful if they want to avoid being liable to pay U.S. taxes while in the country.

The U.S. Internal Revenue Service (IRS) uses a “substantial presence” test to determine if the length of your visits requires that you pay U.S. taxes. To check for a “substantial presence”: Add the number of days visited during the current calendar year, plus 1/3 of the days visited in the previous year, and 1/6 of the days visited in the year before that. If the total is more than 182 days, you will be required to file Form 8840 with the IRS.

Consider the following example: a Canadian couple visited the United States for 130 days in 2010, 120 days in 2009, and 120 days in 2008. They would add 130 days, plus 40 days (1/3 of 120), plus 20 days (1/6 of 120 days) for a total of 190 days. Since this is more than 182 days, the couple would have a “substantial presence” and need to file Form 8840.

Before you get nervous, know that filing Form 8840 with the IRS does not necessarily mean that you will have to pay U.S. taxes. Canadians who meet the requirements for a “substantial presence” will be considered U.S. residents for tax purposes, and must file with the IRS. However, Canadian snowbirds often qualify for a Closer Connection Exemption, which means they will not have to pay U.S. taxes.

If you are a Canadian snowbird who does not want to pay U.S. income taxes, or hefty fines, you should visit the IRS website and learn more about the substantial presence test and Closer Connection Exemption. Make sure you understand how the rules apply in your situation, because ignorance of the law will not prevent the IRS from holding you liable for unpaid taxes.

4. Learning from Other Snowbirds

Canadians who spend extended vacations south of the border will avoid problems and have a much more enjoyable experience if they take the time to understand the applicable laws and get some advice from fellow snowbirds. Whether you are new to wintering in the U.S. or a seasoned snowbird, you will find a wealth of information by joining the Canadian Snowbird Association.

Please feel free to also share your experiences as a Canadian Snowbird in the comments below.