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US Tax Info for Canadian Nomads

If you spend time working physically in the United States, you need to watch two separate systems: the **Substantial Presence Test (SPT)** (which can make you a U.S. tax resident) and U.S. tax rules for **U.S.-source income** (which generally tax anyone earning income for work done in the U.S.). The

Last reviewed May 2026

Quick orientation for Canadian digital nomads

If you spend time working physically in the United States, you need to watch two separate systems: the Substantial Presence Test (SPT) (which can make you a U.S. tax resident) and U.S. tax rules for U.S.-source income (which generally tax anyone earning income for work done in the U.S.). The Canada–U.S. tax treaty modifies those rules in important ways. Below is a practical guide with concrete examples and the key forms you’ll see.

Substantial Presence Test (SPT)

The rule

You are treated as a U.S. tax resident for a calendar year if:

  • You are physically present in the U.S. for at least 31 days in the current year, and
  • The total using the formula below is 183 days or more:
    • All days in the current year +
    • 1/3 of the days in the previous year +
    • 1/6 of the days in the year before that

Days of mere transit (<24 hours) and certain “exempt individuals” (students, teachers on certain visas, professional athletes in limited circumstances) do not count.

Examples

  • Example A — short stay: You spent 120 days in the U.S. this year, 120 last year, 120 the year before.
    • Calculation: 120 + (1/3 × 120) + (1/6 × 120) = 120 + 40 + 20 = 180 → You do NOT meet SPT (180 < 183).
  • Example B — longer stay: You spent 150 this year, 60 last year, 60 two years ago.
    • Calculation: 150 + (1/3 × 60) + (1/6 × 60) = 150 + 20 + 10 = 180 → Still below 183.
  • Example C — cross the line: You spent 180 this year, 90 last year, 0 year before.
    • Calculation: 180 + (1/3 × 90) + 0 = 180 + 30 = 210 → You meet SPT and are a U.S. tax resident for that year (subject to treaty tie-breaker if dual resident).

If you don’t meet SPT

You are generally a nonresident alien for U.S. tax purposes. File Form 8840 (Closer Connection Exception) if you are present but want to document that you have a closer connection to Canada and therefore are not a U.S. resident (used when you do NOT meet SPT but want to assert closer connection).

If you do meet SPT

You are generally taxed as a U.S. resident on worldwide income (file Form 1040). If you’re also a Canadian tax resident you may be a dual resident; the tax treaty will resolve which country is the resident for treaty purposes.

Canada–U.S. Tax Treaty — key points for digital nomads

The treaty modifies how employment income and business income are taxed between the two countries.

Employment income (common “183-day rule” in treaties)

Under the treaty, a Canadian resident working in the U.S. may escape U.S. tax on employment income if ALL three conditions are met:

  • You are present in the U.S. for ≤ 183 days in any 12-month period,
  • Your salary is paid by (or on behalf of) an employer who is not a U.S. resident, and
  • The salary is not borne by a permanent establishment (PE) of the employer in the U.S.

If any condition fails, the U.S. can tax the employment income.