Harrisburg Cross-Border Tax

Newcomers in a New City

Harrisburg's growth includes families who came to the Sioux Falls area from other countries for work, study or family. Some are recent immigrants or refugees, some are skilled workers on visas and some are Canadians who moved for a job. Each household has questions about filing status, taxpayer numbers, accounts back home and money sent to or received from relatives. BOMCAS is based in Edmonton and handles US and Canadian returns regularly, and we help Harrisburg families with cross-border filings remotely.

Treaty and residency basics are on the South Dakota cross-border tax page, and this page applies them to newcomer and Canadian families in Harrisburg.

Residency and Filing Status

A newcomer becomes a US resident for tax purposes by holding a green card or meeting the substantial presence test. In the year of arrival, a dual-status return may be needed, though married couples can often elect to be treated as residents for the full year and file jointly. Getting the first year right sets up later years correctly.

Taxpayer Numbers

A spouse or child without a Social Security number needs an ITIN to be included on a return. The child tax credit requires a Social Security number for the child, while an ITIN may allow a credit for other dependants. ITINs that are not used on a return for three years expire and must be renewed.

Accounts and Property Abroad

US residents report worldwide income, including interest from bank accounts and rent from property in their home country. Foreign accounts totalling more than $10,000 at any time in the year require an FBAR, and larger holdings may need Form 8938. A home kept abroad and rented out goes on Schedule E, with credit for tax paid to the other country.

Money From and To Relatives

Sending money to relatives abroad is generally not deductible, and gifts above the annual exclusion may require a gift tax return, though tax is rarely due. Receiving gifts or inheritances from foreign individuals totalling more than $100,000 in a year must be reported on Form 3520.

Canadians in Harrisburg

Canadians who moved here file a final Canadian departure return and become US residents. RRSPs can usually remain in Canada with the treaty protecting their growth, but TFSAs and RESPs lose their tax-free status for US purposes. Canadian real estate kept after the move remains taxable in Canada when rented or sold.

Workers on Visas

Skilled workers on H-1B and similar visas are usually residents once they meet the substantial presence test. Spouses on dependant visas may not be allowed to work, but they can still be included on a joint return with an ITIN.

What We Handle

First-year and dual-status returns.
ITIN applications with the return.
FBAR and Form 8938.
Foreign rental income and foreign tax credits.
Canadian departure and non-resident returns.

Pensions and Social Security From Abroad

Newcomers who earned pensions or social security in another country may receive payments in the US. Some treaties tax those payments only in the source country, and some countries have totalisation agreements with the US that coordinate social security coverage. We check each country's treaty before reporting.

Starting a Business

Newcomers starting a business in Harrisburg can use an ITIN or Social Security number for the EIN application, and they need the same sales tax licence and payroll registration as any other business.

Before moving to or from the US, a review of accounts, property and timing can prevent double taxation and missed forms in the year of the move. We can also help newcomers keep records of income and tax paid each year, which makes claiming credits in either country easier.