Tag Archives: Anthony Parent

US citizens living in Canada will NOT pay US tax on $1200 US Cares Act payment but likely will pay US tax on Canada’s CERB Payment

Prologue – The Only Certainties Are Death And Taxes

The above tweet references an article in the Globe and Mail on May 7, 2020. The article contains interesting perspectives, but much has changed since that time.

COVID-19 and the role of government assistance

Both the US $1200 payments under the CARES Act and Canada’s CERB payments were designed to fulfill the same purpose. Specifically, that purpose was to get relief money into the hands of individuals who were suffering from the the COVID-19 pandemic. It appears that payments were made generously with few qualifications for receipt of payments. The qualification appears to have been that an individual was a tax resident of the country. The $1200 CARES Act payment and the CERB payment were to fulfill the same function. Therefore, it would seem logical that both the CERB and CARES Act payment should be taxable in each country or neither payment should be taxable in the country. But, different characterizations of the payments appear to lead to different results.

First let’s review what we do know.

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Considering renouncing US citizenship? #citizide – There are times when US citizenship can save you from foreign taxes!

Should other nations be permitted to impose taxation on U.S. citizens or corporations?
At first blush, the question sounds absurd. Is there something about being a U.S. citizen that should exempt individuals from taxation in or by a another country? Some time ago, this question was explored in a discussion on a Facebook group. Interestingly, most participants thought the discussion was absurd and did not take it seriously. But truth can be stranger than fiction. When it comes to taxation there can be some benefits to being a U.S. citizen. In fact, in certain cases, U.S. citizenship can act as a “cloaking device” – a device that shields you from taxation in another country.

The two certainties are “death and taxes” …

It’s in the area of “death” where U.S. citizenship can be helpful. Sometimes it can be to your benefit to die as a U.S. citizen. Sometimes U.S. citizenship can be helpful when somebody dies leaving you part of their estate.
What follows are some categories where U.S. citizenship can protect you from taxation. These possibilities should be considered prior to renouncing U.S. citizenship.
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