Lately we’ve had reports of questions at U.S. ports of entry about a “180 day rule” which are confusing to Canadian visitors who spend a lot of time in the United States for business or holiday. To make sense of the confusion, it’s important to clarify the distinction between U.S. immigration law and U.S. tax law.
First, the immigration rule: Canadians are allowed to enter the United States as visitors and remain here for up to 180 days (6 months) after each entry. Each admission as a visitor is for a maximum of 180 days. Canadians should depart the United States before they have been here for 180 days. But U.S. immigration law imposes no limit on the number of days a Canadian can be physically present in the United States as a visitor.
As a practical matter, if someone spends more than half the year in the United States as a “visitor”, it raises a question whether the person actually lives in the United States and needs immigration approval to do so. Individuals who reside in the United States need immigration approval; residents aren’t eligible for admission to the United States as “visitors” and should be refused entry in visitor status.
Now here’s the tax rule: Individuals who remain in the United States for an aggregate of more than 180 days on average in a given tax year may be treated as a tax resident of the United States, for tax purposes only. There is a formula to calculate the average number of days spent in the United States for tax purposes, based on a three year average. U.S. tax obligations are different for tax residents than for nonresidents.
Visitors requesting admission to the United States should be prepared to document that they have been living in Canada and only visiting the United States, as this is a legal requirement for admission as a visitor. The more time a person spends in the United States, the more likely it is that this issue will be raised as a question at a U.S. port of entry.