Cardinal Point Wealth Management Alert: Proposed US Bill Would Extend Visitation for Eligible Canadians - But Impose Strict Conditions and Tax Implications

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TORONTO, ON and NEWPORT BEACH, CA - June 25, 2025 - Cardinal Point Wealth Management, a leading Cross-Border Financial Advisor [https://cardinalpointwealth.com/cross-border-financial-and-tax-planning/moving-to-canada-from-the-u-s/] firm specializing in Canada-US Financial Planning [https://canadausfinancialplanning.com/], is closely monitoring the recent introduction of the Canadian Snowbird Visa Act in the US House of Representatives. While the proposed legislation offers extended stay privileges for eligible Canadian citizens, caution and close attention are urged because the Act's unresolved tax and administrative implications could adversely affect Canadians living in the US or spending significant time there.

Overview of the Proposed Legislation

Introduced in April 2025, the Canadian Snowbird Visa Act is a bipartisan bill that aims to increase the allowable number of visa-free days Canadian citizens can spend in the US from 182 days (approximately six months) to 240 days (around eight months) annually. The bill specifically targets Canadians age 50 and over who maintain a home in Canada and either own or lease a US residence. Importantly, the proposed visa extension does not permit employment or access to American public assistance programs.

The bill's stated objective is to stimulate the US economy by increasing Canadian tourism and associated spending, particularly in states such as Florida, California, and Arizona, where Canadian snowbirds already play a significant economic role. Canadians are currently the largest group of international visitors to the US, contributing over US$20 billion per year.

Legal and Administrative Safeguards

Despite its economic intent, the bill includes strict conditions to prevent misuse. It explicitly prohibits work authorization and maintains the nonresident alien tax status for eligible Canadians. However, it does not override the existing US Substantial Presence Test (SPT), which continues to be the benchmark for determining US tax residency.

Simultaneously, the proposed legislation fails to address recent administrative changes requiring registration with US authorities and carrying of proof of registration for all foreign nationals-Canadians included-who stay more than 30 days. This requirement, criticized by advocacy groups such as the Canadian Snowbird Association, remains unaffected.

Implications for Tax Residency and Compliance

Cardinal Point cautions that although the bill states that participants will retain "nonresident alien" tax status, this designation does not automatically exempt Canadians from US tax filing obligations. Under the SPT, a snowbird staying more than 183 days over a rolling three-year period may be considered a US tax resident unless they file IRS Form 8840 to claim a closer connection to Canada.

Being categorized as a US. tax resident can trigger extensive filing and reporting requirements. For example, individuals may need to disclose interests in Canadian companies, trusts, mutual funds (which could be deemed Passive Foreign Investment Companies, or PFICs), and registered assets such as RRSPs and RRIFs. Reporting obligations may also include Form 8938 (Statement of Specified Foreign Financial Assets) and FBAR (FinCEN Form 114), with significant penalties for noncompliance.

Particularly in states like California, that do not recognize the Canada-US Tax Treaty, even federally nonresident Canadians might be deemed state tax residents, potentially incurring tax on accrued earnings within registered accounts.

Historical Context: Previous Legislative Attempts

This is not the first time such legislation has been proposed. From 2013 to 2019, various iterations of a "Snowbirds Act" have failed to progress beyond committee stages. Notably, bills in both the House and Senate introduced in 2023, including H.R. 4448 and S. 387, garnered bipartisan support but ultimately stalled. Given this history, Cardinal Point notes that the current proposal faces an uncertain legislative future.

Summary of Proposed Changes

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Conclusion

While the Canadian Snowbird Visa Act could provide welcome flexibility for eligible Canadian citizens, Cardinal Point Wealth Management emphasizes that cross-border legal and tax complexities remain unresolved. Particularly concerning are the continued applicability of the Substantial Presence Test, state-specific tax policies, and rather burdensome administrative requirements. Canadians considering extended stays in the US should consult qualified cross-border tax and financial planning advisors to fully evaluate potential financial and compliance implications.

About Cardinal Point Wealth Management

Cardinal Point Wealth Management is an independent Cross-Border Financial Advisor firm providing comprehensive Canada-US. financial planning, investment, and tax services for high-net-worth individuals and families. With offices in both Canada and the United States, Cardinal Point specializes in guiding Canadians living in the US [https://cardinalpointwealth.com/canadians-living-in-the-u-s/] and Americans residing in Canada through the complexities of cross-border wealth management, ensuring regulatory compliance and optimal financial outcomes.

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