What is the Substantial Presence Test for Canadians?

The Substantial Presence Test is an IRS rule that counts days spent in the US over a 3-year period. If the weighted total (Current Year + 1/3 Prior Year + 1/6 2nd Prior Year) equals 183 or more, you may be considered a US resident for tax purposes.

What is IRS Form 8840?

Form 8840, the Closer Connection Exception Statement, allows Canadians who meet the Substantial Presence Test but are in the US for fewer than 183 days in the current year to claim they are still residents of Canada and exempt from US tax residency.

How long must I stay in Ontario to keep OHIP?

Generally, you must be physically present in Ontario for at least 153 days in any 12-month period to maintain OHIP coverage.

The Canadian Snowbird's Guide to US Residency

How to enjoy the US winter without accidentally becoming a US taxpayer or losing Canadian health coverage.

The Two-Front Battle

For thousands of Canadians, escaping the northern winter for Florida, Arizona, or California is a way of life. However, this lifestyle comes with two critical compliance risks that often conflict with each other:

The US IRS Rules: Staying too long in the US can make you a "US Resident for Tax Purposes," subjecting your worldwide income to US taxation.
The Canadian Provincial Rules: Staying away from your home province too long can cause you to lose your provincial health insurance (OHIP, RAMQ, MSP, etc.).

1. Avoiding US Tax Residency (IRS)

The United States taxes based on citizenship and residency. Even if you are not a US citizen or green card holder, you can be taxed as a resident if you meet the Substantial Presence Test (SPT).

The Substantial Presence Test Calculation

You meet the test if you are physically present in the US on at least:

31 days during the current year, AND
183 "weighted" days during the 3-year period that includes the current year, the previous year, and the year before that.

The Formula:
(Days in Current Year × 1) +
(Days in Previous Year × 1/3) +
(Days in 2nd Previous Year × 1/6)
= Total Weighted Days

If this total is 183 or more, you are a US tax resident unless you claim an exception.

The Solution: Form 8840 (Closer Connection Exception)

If you meet the Substantial Presence Test but were present in the US for fewer than 183 days in the current calendar year, you can avoid US tax residency by filing IRS Form 8840 (Closer Connection Exception Statement for Aliens).

This form proves that you maintain a "closer connection" to Canada (e.g., your permanent home, family, voting registration, and drivers license are in Canada).

Warning: If you stay in the US for 183 days or more in a single calendar year, you cannot use Form 8840. You are a US resident. Your only recourse then is the "Tie-Breaker Rule" under the US-Canada Tax Treaty, which requires filing a full US tax return (Form 1040NR) and Form 8833. This is complex and expensive.

2. Protecting Your Canadian Health Insurance

While you are trying to stay under the US limit, you must also ensure you stay in your home province long enough to maintain health coverage.

Province	Physical Presence Requirement
Ontario (OHIP)	You must be physically present in Ontario for at least 153 days in any 12-month period.
British Columbia (MSP)	You must be physically present in BC for at least 6 months in a calendar year.
Quebec (RAMQ)	You must not be absent from Quebec for 183 days or more in a calendar year.
Alberta (AHCIP)	You must be physically present in Alberta for at least 183 days in a 12-month period.

*Rules subject to change. Always verify with your provincial ministry of health.

The Counting Challenge

The definitions of a "day" can differ significantly:

For the IRS: Any part of a day spent in the US counts as a full day (with very limited exceptions for medical conditions arising while there, or transit).
For Canada: Absences are often counted by full days.

Managing this tightrope—staying in the US long enough to enjoy the winter but short enough to satisfy the IRS, while ensuring you return to Canada enough to satisfy your province—requires precision.

Track Every Day Automatically

Don't rely on memory or passport stamps.
Use Domicile365 to track your days in the US and Canada automatically via GPS on your phone. Generate reports for Form 8840 or your provincial health audit.

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