It happens every couple of years: broadcast and print media announce in bold headlines that Canadian retirees 55 years or older who can afford a second home in the US (owned or leased) will soon be allowed to live there for up to eight full months per year instead of the 182 days they are currently allowed under the B2 visitor visa.
Sounds like great news for snowbirds who prefer slathering on sunscreen to shovelling snow.
Just this month, an opinion piece in Canada’s Financial Post warned that tax increases on Canada’s middle classes were fuelling a brain drain of doctors, nurses, tech workers, and entrepreneurs to the US and elsewhere, adding, “Just watch the enormous economic damage done when Congress extends its permission for snowbirds by two months—to eight months a year—to stay in the U.S. without becoming taxable.”
Well, let’s just hang on here
As I said, this happens every couple of years: similar headlines were published in 2015, 2013, and for several years before that. In the meantime, Canadian retirees in this age and affluence cohort continue holding out hope that those headlines may materialize, only to have them dashed by the tortured reality of American politics.
What is most misleading about the article cited (and many similar ones aired and printed) is the inclusion of the word “when,” instead of “if.”
What we are referring to is US House Resolution 979, the Promoting Tourism to Enhance our Economy Act of 2017, which is subtitled “Encouraging Canadian Tourism to the United States.” This act would allow any Canadian citizen 55 years or older, who maintains a residence in Canada and also owns or leases a residence in the US, to remain in the US for up to 240 days out of 365—that’s eight months.
Though the media has characterized this bill’s chances of making it into law as “encouraging” because it has bipartisan support, all the previous bills of this nature did too, and they still failed to make it to the finish line.
What’s the holdup?
Congressional bills, many introduced with great fanfare, must first be dealt with in committee (either House or Senate) before getting to either the House or Senate floor. The ones that do make it get there only at the discretion of committee chairmen. Only a minuscule number do. And then the real political wrangling begins.
At present, there are 10,153 bills or resolutions before Congress—only about 7 per cent of which will become law during its current two-year session, which ends January 2, 2019. Bills that don’t make it will simply die, perhaps to be reborn as new measures in the next Congressional session beginning January 3, 2019.
Experts who track these things previously gave similar bills no more than a 2 per cent chance of enactment. They give the current bill (HR 979) only a 1 per cent chance. Pretty slim when you consider that legislators will take the entire month of August off for their summer vacation, and after they return, they will focus on the top-priority items they need to get cleaned up in time for their midterm Congressional elections, followed by the long Thanksgiving holiday period, and the Christmas and New Year breaks that mark the end of the 115th Congress.
With issues such as school safety, gun control, funding for a wall with Mexico, military deployments, the Iran nuclear deal, trade embargoes, and Korean peninsula peace talks all demanding the attention of representatives and senators seeking re-election, the chances of HR 979 seeing daylight seem somewhat moot.
As for the taxation issue noted in the Financial Post article: there is a misconception widespread among media that Canadians are allowed to stay in the US longer than the current 182 days on their B2 (visitor) visa so long as they are prepared to pay US taxes. Not so. They still must abide by the six-month limit unless they have a special visa allowing them to do otherwise. And HR 979 makes no reference to taxation.
All Canadians who stay in the US for the maximum 182 days per year are in fact taxable by the US (the exact number of days is determined by a three-year graduated formula). But they may be easily exempted from that burden by filing a Closer Connection to Canada form (IRS 8840) showing that their permanent home is in Canada, that they pay their taxes to Canada, and that they are, in effect, only visitors to the US.
Maybe next year.
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