Many Canadians who escaped the severe winter by heading to the southern United States will return in Canada for the summer months. With no precise government statistics, determining the actual number of these snowbirds is hard to ascertain; however, a 2023 snowbirdadvisor.ca report estimates that of the more than one million surveyed Canadian snowbirds, over 85% travel to the U.S., and of those, approximately one-half own their own U.S. real estate. The most popular U.S. winter destinations for Canadians are Florida, Arizona, California, and Texas.
While this lifestyle is attractive, it also involves dealing with the income tax systems of two countries and U.S. estate tax risks. Proper attention to these income and estate tax concerns can provide peace of mind that an unexpected tax bill will not be incurred in the future.
Of course, not just Canadian snowbirds may have U.S. income or estate tax risks. For example, any Canadian who spends an extended time in the U.S. for work or school can have a U.S. income tax filing requirement, and anyone who owns investments in U.S. marketable securities can have a U.S. estate tax risk.