Snowbirds need to complete form 8840 called 'Closer Connection Exemption Statement for Aliens' if they regularly spend over 121 days and up to the maximum allowed 182 days in the United States in any calendar year.
The form for 2019 (for example) is to be completed and mailed in before the deadline of June 15th 2020. (Extensions up to 2 months may apply but it's advisable to stick to this deadline).
Stays between 122 and 182 days in a calendar year meet the ‘Substantial Presence Test’ which means you are a resident and so you have a closer connection to the U.S. than your home country.
By completing the form you gain exemption from being a resident of the U.S. for that calendar year. Staying longer than 182 days in a calendar year means you cannot get this exemption at all and you will be required to file a U.S. tax return.
The test states that you are a resident of the U.S. if you spent at least 31 days there during that calendar year (Jan to Dec) and at least 183 days calculated by adding the days spent during that year plus 1/3 of the days spent in the previous year plus 1/6 of the days in the year before that.
Here's an example for 2019:- assuming regular 122 day stays (Jan to Dec) :- 122(2019) +
122/3(2018) + 122/6(2017) = 183 days so you are a
resident and the form needs to be completed. (Note that the 183 result is an indicator number only i.e. the result of the calculation test. It just indicates to you that there is a need to complete form 8840 to prove your closer connection exemption. It's not the same thing as the actual stay in any given year. The calculation result can be higher than 183 and still give exemption.)
Whether you are a partial snow bird or you stay the maximum number of days the 'closer connection' matter needs to be taken seriously. Even if you think you don't have a substantial presence in the U.S., it’s best to check the test each year to make sure you don't inadvertently become a resident.
have to count the days you arrive and the day you leave as days present in the
U.S. Also, watch out for leap year which will add one more day – for example
If you ever get audited, it’s useful to keep a paper trail which can help to prove when you were in the U.S. and when you were away.
We keep a record of all the documents that may be needed to prove the time-lines of entering and leaving the U.S. Any time we fly to the U.S. we keep the boarding passes as proof of the dates of arriving and leaving the U.S.
For driving, neither the U.S. nor Canadian border officials stamp passports any more. Gas, meal and hotel receipts acquired during our drives back and forth can help to establish presence or not in the U.S. and they go into the file.
As we are approaching the borders, we keep receipts for the days immediately preceding entering as well as the day entering either the U.S. or Canada.
Filling out the form takes a bit of effort. There are 30 questions that need some information gathering. When you’ve done it once and you’ve become organized it makes it a lot easier for the following year.
You can access the latest version of the form at this link……………