Residency and Tax Implications of Living in Texas While Family Resides in Buffalo, NY for Canadian Citizens!!!

[TAPS2050]

Hello,

I am a Canadian citizen working in the U.S. on a TN visa. I moved to Texas on June 1, 2024, where I live and work remotely for a Texas-based company. My wife and child are still in Toronto, Ontario, and my wife works remotely for a Canadian employer. We own a family home in Ontario.

My wife and child are planning to move to Buffalo, NY, where my wife will continue her remote work (by crossing the border daily to Ontario and will work in Niagara Falls, ON) and my child will attend school in Buffalo. However, I will continue to live and work in Texas, and I will visit them frequently on weekends and holidays (less than 100 days per year). It's easy for me to visit Buffalo frequently vs Toronto. 

To facilitate this, my wife will be leasing apartment in Buffalo for my wife and child. I plan to keep my car in Buffalo, as my wife will use it during the week. I’ll drive the car on weekends and holidays when I visit.

Here are my main questions:

1. Tax Residency:

   • Will I establish New York State (NYS) residency by parking my car there (even though I don’t physically live in NYS and will continue to live and work in Texas), I might need to register this car there or transfer the title to my wife so that she can register there if I can't without resident proof?
   • If I maintain my Texas residence, am I still at risk of being considered a NYS resident for tax purposes if I visit frequently but don't exceed 100 days in NYS per year?

2. Car Registration and Insurance:

   • If my car is primarily parked in Buffalo for my wife’s use, can I continue to keep it registered in Texas without violating any NYS laws regarding vehicle registration?
   • My insurance company says I’ll need a NYS address if the car is parked in Buffalo full-time. Does this mean I’d need to register the car in NYS? 

3. My Wife’s and Child’s Tax Status:

   • She will establish NYS residency for tax purposes by living in Buffalo, even though she is not working for a U.S. employer? Could the Canada-U.S. Tax Treaty help her avoid NYS income taxes?

4. Overall Strategy:

   • What steps should I take to avoid inadvertently establishing residency in NYS and triggering state income taxes, while ensuring compliance with car registration and insurance rules in both NYS and Texas?

I would appreciate any advice or guidance on how to navigate this situation while ensuring I don’t run into tax or residency issues in either state.

Thank you!

[pk]

@TAPS2050 , 

It seems to me that what you are trying to achieve:

(a) Pay not state tax

(b) File MFJ  ( Married Filing Joint) to reduce  your tax liability for the federal tax in the USA.

IMHO, you are going through a lot of trouble to achieve this  ( and not be successful :(

1.  Assuming that your spouse , a Canadian citizen, is on a non-work visa  in the USA,  her  "remote work" would violate   visa conditions.  On the other hand if she does  have a work visa  ( based on your  TN visa ), her work being done in  the USA would mean  her income is taxable by the US.  Her residency in NY would bring her under the  NY state  tax ambit.  Thus for federal , both your world income is taxed  by the  US and  for state filing  only she needs to file  as  NY resident.

2. Your statement that you would work remotely   while  domiciled in TX,  would still make that income taxable  by the state  ( noting that  TX has no PIT ).

I am at a loss to understand  why you are not having the whole family  domiciled in TX and avoid all this complicated  set-up.  What are you trying to achieve ?

Please answer with more details  and I will circle back.  You can also  PM me  with details  ( just NO Personally Identifiable Information ).

Look forward to hearing  from you .

pk

[TAPS2050]

Thank you very much for your answer. I appreciate it. I have sent you additional information as you suggested.