Determine home country of tax residence

[Gregory16]

Hi, we are considered non-resident aliens in the US for tax purposes (J1 visa for research scholars), which means we have to specify the home country of tax residence in order to take advantage of tax treaties. We had a two-year postdoctoral fellowship in Canada before moving to the US in September 2023. We paid taxes in Canada and lived in Canada for two years, but have permanently emigrated from Canada and have no significant ties there, i.e. no personal or economic ties. However, we do have significant ties to Germany. I have German citizenship, my wife has a permanent residence permit, our parents live there, we have our personal belongings there and we lived there permanently for a long time before moving to Canada. My wife is also a Russian citizen and has real estate in Russia.

What is our home country for tax purposes? Canada, where we have lived for the past two years, or Germany/Russia? We will return to Germany after our time in the US. Thank you so much for your help!

[DaveF1006 · Accepted solution]

It depends.  If you were on a student Visa in Canada and then migrated to the US, your home country is Germany. Since you plan on returning, I can safely advise your home country is Germany.

As an FYI, Turbo Tax does not prepare 1040 NR returns but our affiliate at Sprint tax does.

 https://www.sprintax.com/

[Gregory16]

Thanks, Dave! We had work permits in Canada, nothing more. Is that different from student visa in terms of implications for tax residence? 

If the IRS requires proof, how would we prove that Germany is our home country? I guess we would have to prove that paying taxes in Canada on a work permit does not necessarily equate to tax residency?

Thanks again! We will file with Sprint tax!

[DaveF1006]

If you are required to submit proof, you may be able to submit a notarized statement attesting to your German citizenship, your wife's permanent residence permit, your parents German residency and the fact your personal belongings still remain there. Your ties are with Germany and no where else.

In short, the final paragraph should state that your ultimate goal is to return to Germany with no other goal in mind.  

@Gregory16