Tax Responsibility for Immigrants to Canada and the U.S.

Tax Responsibility for Immigrants to Canada and the U.S.

Moving to a new country is a complicated and often confusing process. Differences in culture, language, and bureaucracy all require a learning curve that can take months or even years to adjust to. 

Plus, for the many millions of people currently displaced due to war, economic instability, discrimination, and all the other horrible things happening throughout the world, their emigration is likely out of desperation rather than choice. And that brings a whole additional level of stress to the situation that is absent for people who move for pleasure.

Regardless of the reason, immigrating to a new country requires adherence to that country’s rules. This is particularly true of one’s tax responsibility. One of the quickest ways to cause problems for one’s legal status is to ignore paying your taxes.

No government is going to look fondly on someone who reaps the benefits of its country without contributing fiscally to that nation.

Canada and the United States are two of the most popular destinations for immigrants worldwide. They are also considered some of the most receptive to new people. Therefore, newcomers need to be aware of their financial responsibilities so that they can remain in their new homeland. Read on to understand what each country expects from its new arrivals. 


Canada uses three main categories of residency to determine if someone in its territory should pay taxes. “Factual residents” are those who live, work, and have strong ties to the country and their community. A “deemed resident” is one who visits Canada for 183 days or more a year. 

That's right; even so-called “visitors” are expected to contribute to the financial wellness of the country if they spend more than half of the year on Canadian soil. Lastly, there is the category of “deemed non-resident.” 

Depending on the immigrant's country of origin, how long he has been in the country, and several other factors, “deemed non-residents” may still be expected to pay Canadian taxes. There are a variety of online tax pages that helps explain the tax laws. Also, clarity about how the government is likely to categorize immigrants for taxation purposes is provided. 

The United States

The U.S. uses two main categories: tax residents and non-tax residents. While that may seem simple, it is not. There are subcategories that can be confusing to immigrants unfamiliar with American bureaucracy.

There are several situations in which non-citizens pay U.S. taxes. Non-tax residents may also pay taxes if their employer withholds taxes from their paychecks. Many undocumented immigrants pay into the system, as well, despite not having legal status.


It can be challenging for newcomers to understand their tax responsibility properly. Some may choose to rely on their research or the advice of family members. It is advisable to seek financial or legal advice from a professional to ensure that everything is done correctly. While the expense might seem unnecessary in the moment, seeking help can prevent serious future problems.

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