Q. My husband and I are Canadian citizens who are snowbirds and own a unit in OTOW. We file IRS form 8840. One of us is still working while the other stays here in the winter season. My spouse comes here for a couple of weeks in one month and an additional 6 weeks later on. Can you explain how to calculate the number of days so that there are no repercussions?
A. I’ll try to explain it. However, please understand that it’s difficult to touch on all the issues in a column such as this. I’ll do the best I can here. As it happens, I don’t think the form is all that complicated, once you get into it. Form 8840 is titled: Closer Connection Exception Statement for Aliens. The concept is that if you have a closer connection to a foreign country than you do to the United States, you may be entitled to avoid U.S. income taxation. Form 8840 is therefore designed for snowbirds that spend the winter in the U.S. but because of a closer connection to another country, they may be able to avoid paying U.S. income tax. In essence you acknowledge that you are not going to be filing an I.R.S. income tax return because you have a Closer Connection with another country. Canada is an example. It’s my opinion that foreign folks who “winter” here should always file Form 8840 with the IRS, because you are saying that although you spend winters here you are here for pleasure and not for business. If you are here for more than 183 days in any one calendar year, you are not eligible to file this form. Thus, you might possibly be obligated to file a U.S. income tax return on income earned in the U.S. or earned in or on U.S. investments. The calculation to which you refer is simple: Are you here for 183 days or less. That tells you whether you can file Form 8840. As for the way you and your husband handle this—with you staying here longer than he does, I don’t have a good answer and my research doesn’t help. I think you need to calculate the number of days you both are here and if that exceeds 183, then you should not file the form. Of course, it is possible that you could file two separate forms, one for you and one for him; but I’m not a CPA and do not know if there is any wisdom in doing that. See the next question in this column.