By provision of the income tax treaty between the U.S. and Canada, benefits paid under the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), and Old Age Security (OAS) program to a U.S. resident are taxable, if at all, only in the United States. These Canadian benefits are treated as U.S. social security benefits for U.S. tax purposes. Thus, under section 86 of the Internal Revenue Code, the portion of the benefits that is taxable will depend on your total income. If your total income is above certain limits, a maximum of 85% of your benefits will be subject to U.S. tax.

Canadian benefits that are treated as U.S. social security benefits are reported on line 20a and 20b of Form 1040 or line 14a and 14b of Form 1040A.

References:

• Publication 597, Information on the United States-Canada Income Tax Treaty
• Publication 915, Social Security and Equivalent Railroad Retirement Benefits
• Tax Topic 423, Social Security and Equivalent Railroad Retirement Benefits

You must comply with both U.S. and Canadian filing requirements. In the United States, you generally are required to file a return if you have income from the performance of personal services within the United States. However, under certain circumstances, that income may be exempt from payment of U.S. tax pursuant to the U.S.-Canada income tax treaty. You need to determine what type of visa you have, and how that impacts your residency status in the United States. If, based on the tax code and your visa status you are treated as a U.S. resident, then your entitlement to treaty benefits will be impacted.

References:

• Publication 519, U.S. Tax Guide for Aliens
• Publication 597, Information on the United States-Canada Income Tax Treaty
• Publication 901, U.S. Tax Treaties

In the United States, you generally are required to file a return if you have income from the performance of personal services within the US. The type of return to file would depend upon whether you are a resident of the U.S. for purposes of U.S. tax law. There are several tests to determine residency, including the substantial presence test, which is based on how many days you are present in the U.S. over a period of three years. Refer to Tax Topic 851 for information about which return to file. If you are simultaneously a U.S. resident under U.S. law and a Canadian resident under Canadian law, you should consult the U.S.-Canada income tax treaty for rules that would treat you as a resident of only one country. It is also possible that you may have to file a dual-status return in the U.S. if you qualify as a U.S. resident for only part of the year. Refer to Tax Topic 852 for dual-status information.

References:

• Publication 519, U.S. Tax Guide for Aliens
• Publication 597, Information on the United States-Canada Income Tax Treaty
• Publication 901, U.S. Tax Treaties
• Tax Topic 851, Resident and Non-Resident Aliens
• Tax Topic 852, Dual Status Aliens

You were a dual status alien last year. As an H-1 visa holder in the U.S. for 183 days or more, you likely became a resident, for tax purposes, as of June 30th. For the part of the year you are a resident alien, you are taxed on income from all sources.

For the part of the year that you are not a resident alien, you are not taxed on income from sources outside the United States, unless the income is effectively connected with a trade or business in the United States.

Income from U.S. sources is taxable whether you receive it while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision. Generally, tax treaty provisions apply only to the part of the year you were a nonresident and only if you are a resident for treaty purposes of a country that has a treaty with the United States.

For that part of the year that you are a nonresident, file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. For that part of the year you are a resident, file Form 1040 (PDF) . Refer to Tax Topic 852 for dual-status information.

References:

• Publication 519, U.S. Tax Guide for Aliens
• Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
• Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return
• Tax Topic 852Dual-Staus Alien

You will have met the substantial presence test and will be taxed as a resident alien for last year, while your husband is likely to be a nonresident alien. Refer to Tax Topic 851 for an explanation of the relevant tax forms. You may file a joint tax return if your husband makes the choice to be treated as a resident for the entire year. Generally, however, you cannot claim tax treaty benefits as a resident alien. Please refer to Publication 519, U.S. Tax Guide for Aliens , for detailed instructions on making this choice.

References:

• Publication 519, U.S. Tax Guide for Aliens
• Tax Topic 851Resident and Nonresident Aliens

Assuming you were not in the U.S. on your F-1 student visa for over 5 years, you may file as a nonresident for the entire year or, if you qualify under the first year choice, you may file as a dual status alien. Please refer to Publication 519, U.S. Tax Guide for Aliens, for additional information.

References:

• Publication 519, U.S. Tax Guide for Aliens

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. As an exempt individual, a J-2 visa holder will not initially meet this test.

For purposes of the substantial presence test, certain days of physical presence do not count, such as the days during which you were an exempt individual . Please refer to Publication 519, U.S. Tax Guide for Aliens , for a detailed explanation of this issue.

In general, U.S. social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. In limited situations, these taxes apply to wages for services performed outside the United States. This exception does not apply to a derivative visa holder.

References:

• Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
• Publication 519, U.S. Tax Guide for Aliens