Cross-Border Nurses
You work in the US and live in Canada. Both countries want their cut, in the right order.
The situation
Where this gets complicated
Nurses commuting to Michigan, New York, or another border state face a specific filing pattern: a US W-2, Canadian residency, and a foreign tax credit that has to be calculated correctly to avoid paying tax twice on the same income.
Commuting daily or weekly across the border to a US hospital or agency
Paid hourly or per-diem with US federal and state withholding on your W-2
Maintaining a home, family, or provincial health coverage in Canada
Unsure whether to file as a US resident or non-resident alien
Forms that typically apply
- 1040 / 1040NR
- Your US federal return, resident or non-resident depending on your days present.
- T1 + T2209
- Your Canadian return with the federal foreign tax credit applied against US tax already paid.
- State return
- Depending on the border state, a separate state income tax filing may apply.
Questions
Common questions
Do I get taxed twice on the same paycheck?
Not if it is filed correctly. The Canada-US tax treaty and the foreign tax credit exist specifically to prevent this, but only when both returns are prepared together and the credit is calculated against the right amount.
Does my commute schedule matter?
Yes. How many days you are physically present in the US affects your US residency status test, which changes which US form you file.