December 7 / US Tax Information

Spending time in the U.S.? How much is too much?


While Canadians enjoy travelling to the U.S. for various reasons they should be mindful of the number of days they spend there each year. The U.S. has a substantial presence test; a formula to determine whether you have been physically present in the U.S. for over a certain number of days over a 3-year period. If your day count is over this threshold, the U.S. will consider you to be a resident for tax purposes thereby subjecting you to tax filings.

To determine your day count, you must be physically present in the U.S. on at least:

31 days during the current year and
183 days during the 3-year period that includes the current year and the 2 years immediately before the current year, by adding:

  • 100% of the days you were present in the current year, and
  • 1/3 of the days you were present in the first year before the current year, and
  • 1/6 of the days you were present in the second year before the current year.

For example, if you were physically present in the U.S. for 120 days in each of the years 2017, 2016 and 2015, the substantial presence test is met by counting all of the days in 2017, 1/6 of the days in 2016 and 1/3 of the days in 2015. This total of 180 days is under the 183-day threshold; the substantial presence test is not met and you will not be considered a U.S. resident for tax purposes. Generally, by spending no more than 120 days in the U.S., in a taxation year, you should not be caught by the substantial presence test.

Physical Presence

While you may have set foot in the U.S. there are some exceptions to meeting the substantial presence test whereby certain days will not count toward the test. Some exceptions include:

  1. Days you are an “exempt individual”
  2. A student in the U.S. while on a visa or
  3. An individual unable to leave because of a medical condition that arose while in the U.S.
  4. Days you commute to work in the U.S. from a residence in Canada or if you regularly commute from Canada to and from the U.S. each day
  5. Days you are in the U.S. as a crew member of a foreign vessel
  6. Days you are in the U.S. for less than 24 hours, when you are in transit between two places outside the United States.

Exceeding the Substantial Presence Test

You have exceeded the substantial presence test. Now what? You can still be treated as a nonresident alien of the U.S. by taking the position that you have a closer connection to Canada by filing Form 8840 with the IRS. The form establishes that your tax home, financial, economic and personal interests lie within Canada where you have a closer connection. The form is due June 30 of the year following the 3-year period.

Note that you can avoid filing Form 8840 by ensuring you spend less than approximately 120 days in the U.S. in each 3-year period.

If you spend 183 days or more in the U.S. in one year then the Closer Connection Exception form cannot be used and a U.S. tax return would have to be filed whereby worldwide income is reported although U.S. source income will be taxed.

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December 1 / In The News

Congratulations Are In Order!

Congratulations to our own Candy Luan and Cathy Cen who passed the 2017 Common Final Exam (CFE).


Passing the CFE takes talent, hard work and exceptional dedication.

We’re so proud of you!!! This is a major career milestone and you rocked it!!!




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November 30 / In The News

Bill 148 Is Now The Law, What Next?



A Timeline of Implementation

The Fair Workplaces, Better Jobs Act, 217 will require employers to make significant changes to their policies and practices. This paper describes the changes and the timeline when they apply.

On Wednesday, November 22, 2017, the Government of Ontario passed Bill 148, the Fair Workplaces, Better Jobs Act, 2017. Introduced on June 1, 2017, as a response to the Final Report on the Changing Workplaces Review, Bill 148 makes significant amendments to Ontario’s Employment Standards Act, 2000 (“ESA”), Labour Relations Act, 1995 (“LRA”) and the Occupational Health and Safety Act (“OHSA”).

To help you navigate these changes, please see the excellent summary as prepared by McCarthy Tetrault on how the changes will affect you.

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November 16 / In The News

The Oakville Hospital Foundation Candlelight Ball

Henderson Partners was honored to once again be a Gold Sponsor of the Oakville Hospital Foundation’s Annual Candlelight Ball !

This year’s theme was The Masquerade and it was an exquisite evening!

The event raised over $400,000 net and will be used to continue to fund the purchase state of the art medical equipment for our new hospital. Congratulations to the Oakville Hospital Foundation and the incredible team of staff and volunteers who made it truly a night to remember!


The Henderson Partners LLP Team


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October 26 / Chartered Professional

Christie Henderson Earns FEA Designation

Henderson Partners is very proud to announce that Christie Henderson has earned her Family Enterprise Adviser designation. The FEA program is designed to integrate the existing skills, education and experience of a professional with additional training in areas such as family enterprise strategy, continuity planning and business family dynamics.

Christie shared that, “Generational transition is one of the most important challenges family enterprises face and is a critical issue for which they seek strong, clear and engaged advice. Henderson Partners is proud to service many family enterprises and of its roots as a family business. Families add an element of continuity and long-term thinking to their businesses that many non-family enterprises lack. Becoming FEA certified through the Ivey Business School will help me to deliver the highest quality advice for our business families and deepens my expertise in this growing and critical sector of the business world.”



Congratulations Christie!

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October 5 / US Tax Information

US Tax Services: Summary of Trump Tax Reform Proposals

In what has been described as the most sweeping tax overhaul in decades, President Trump made good on his election platform promises Wednesday and unveiled tax changes affecting both personal and corporate tax rates.

President Trump cast the tax plan as an economic imperative but provided no measure of the tax plan’s cost and how the working class would benefit from proposals that has explicit and substantial rewards for wealthy Americans and corporations.

Read the article

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September 25 / US Tax Information

When ​Canadians ​Must ​File ​a ​U.S. ​Tax ​Return

Canadian ​corporations ​and ​individuals ​with ​business ​interests ​in ​the ​United ​States ​are ​often ​confused about ​when ​to ​file ​a ​U.S. ​tax ​return.

Canadian ​individuals ​providing ​services ​to ​U.S. ​customers ​or ​Canadian ​corporations ​engaged ​in ​a ​U.S. trade ​or ​business ​are ​required ​to ​file ​a ​U.S. ​tax ​return ​with ​both ​the ​Internal ​Revenue ​Service ​(IRS) ​and possibly ​U.S. ​states ​to ​report ​their ​income ​received ​from ​U.S. ​sources. ​This ​U.S. ​tax ​filing ​is ​in ​addition ​to the ​Canadian ​tax ​filing ​requirement ​of ​reporting ​worldwide ​income.

Read the article

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September 18 / In The News

Liberal Tax Changes and the Impact on Small Businesses in Canada – Dear Ms. Damoff


September 15, 2017


Ms. Pam Damoff, MP
The Valour Building, Suite 810
House of Commons
Ottawa, Ontario
K1A 0A6


Dear Ms. Damoff, MP,

I am writing to you to express my grave concerns with the proposed tax changes released by the Department of Finance on July 18, 2017. These new rules will be damaging for my business and for small, medium and particularly family owned businesses in this country. The Liberal “consultation paper”, quietly released on July 18th, represents the most sweeping tax overhaul we’ve seen in 50 years. We’ve been given 75 days for “consultation”.

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September 7 / In The News, Wealth Management

How This Couple is Balancing Their Finances and a New Baby

In the months leading up to the birth of their first child, Bob and Betty wondered how this new stage of their lives might affect their financial position.

Betty would be taking parental leave, so the household income would drop. When she returned to work, there would be child-care costs and saving for higher education. In time, they might have a second child.

“I worry that we are not managing our savings as well as we should, and that our current lifestyle cannot be maintained once kids are in the picture,” Betty writes in an e-mail. “Will we need to adjust in other areas? Will things be tight in the year I am on maternity leave with only 10 weeks of [employment insurance] top up from my employer?”

Well, the little one has arrived so they’re about to find out. “We welcomed a baby girl on July 2,” Betty writes. “Life is certainly different, and we are settling into this new chapter.”

They are well-positioned financially. At the age of 30, both have good professional jobs, bringing in a combined $175,000 a year before tax. Bob, who makes $83,000 a year in the health-care field, has a defined-benefit pension plan. If he stays put, he can retire in 25 years – at the age of 55 – with a monthly pension of $2,886, plus a bridge benefit of $720 a month until he turns 65.

 They hope to retire early. “We are still young and if we need to adjust course to meet our goals, now is the time,” Betty writes. Like most folks their age, they have a house with a mortgage.

We asked Linda Stalker, a certified financial planner at Henderson Partners LLP of Oakville, Ont., to look at Bob and Betty’s situation.

Read more from our own Linda Stalker who shares her advice with a young couple making important decisions about their future in this special article from the Globe and Mail.


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August 2 / In The News

Fair Is Not Equal

Recent tax measures target entrepreneurs

The Liberals recent Federal Tax initiatives target those that create opportunity and drive innovation in this country. There needs to be incentive for entrepreneurs who risk their capital and who are the back bone of our economy. The tax rates established for the various levels of corporate income were meant to provide that incentive to take risks and to invest.

Read the article

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