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April 7, 2025
Travel nursing is a rewarding and adventure career path that comes with flexibility, diverse experiences and opportunities to work in various states and even international borders. However, it also comes to the exciting lifestyle and filing - especially for travel nurses that work in both America and Canada, introduce the complications. If you are a travel nurse who is navigating this dual-age reality, then understanding your tax obligations is essential for financial peace of mind.
Unlike traditional employees, who work at a certain location, travel nurses often work temporary assignments in various courts. These short-term contracts can expand various states in the US or expand in Canadian provinces based on employers and individual licenses. This type of employment creates a unique tax landscape where your income may be claimed in both countries, resulting in the potential for dual taxation not being managed properly.
When the journey crosses the borders for nurse assignment, they need to report income worldwide. Each country, however, is recording its own tax code, residence requirements, and deadline, which is important to understand what is expected in each jurisdiction.
Travel nurses located in the United States are considered as American tax residents and need to report their global income on their federal tax returns. Even if they take assignments in Canada, their earnings from abroad should still be revealed to the Internal Revenue Service (IRS).
The IRS allows some foreign tax credits or exclusions to reduce the risk of double taxation. For example, the Foreign Tax Credit (FTC) can help nurses reduce their tax liability when they are eligible. However, these benefits are based on strict residence and physical attendance tests, which must be carefully documented.
It is also important to understand state tax requirements, as travel nurses can credits taxes in many states based on their assignment period. Each state has separate thresholds and rules for filing tax residence and obligations.
For Canadian travel nurses working in the United States, the situation of the residency determines how they record taxes in Canada. If a Canadian citizen has a significant relationship for Canada - such as a house, dependent, or other commitments - they are probably still considered a Canadian resident. This means that even while working in the US, the Canada Revenue Agency (CRA) will have to declare income worldwide.
However, Canada has a tax treaty with the United States that helps prevent dual taxation. The treaty shows that some types of income-like employment should be taxed on earning on the income-limits of employment, pension, and self-employment. Through this agreement, travel nurses may be able to claim a foreign tax credit in Canada for taxes paid to the US.
Non-residents of Canada may have to report only Canadian-source income during their US assignments. The installation of a non-residence status can be complex and needs to separate most residential relations with Canada, which may not be practical for many nurses.
One of the biggest challenges for cross-border professionals is filing a Travel Nurse US Canadian Tax that meets the legal requirements of the two countries to maximize the deduction and avoid dual taxation. This requires intensive understanding of tax treaties, such as IRS Form 2555 or Form 1116, and CRA equivalent like T2209.
In addition, travel nurses may need to record double tax returns - a federal return in the US and a separate return in Canada. In some cases, they may need to file in many American states, where their contracts were held.
Travel nurses should also keep a detailed record:
Days spent in every country and every state
Contract and assignment agreement
Earned income per place
Tax documents such as W-2S, T4S, 1099S, and other income slip
Without clear documentation, travel nurses risk the misfilling or disappear from qualified cuts and credits.
While preparing US Canada Tax Return for Travel Nurses, it is easy to fall into some normal nets:
Ignoring foreign tax credit, which can cause unnecessary repeat taxation.
Ignoring state tax obligations, resulting in punishment.
Incorrect tax residence establishing residence, which can lead to wrong returns.
Failed to enter the correct forms associated with foreign income or foreign bank accounts (eg, Fbar).
Each of these micsteps can cause taxes of taxes, penalty or overpers, so it is important to consult a tax specialist who understands the travel nurse tax landscape.
Navigating taxes as a travel nurse working on the US and Canadian borders is a complex but manageable process with the right information and professional support. It is important in understanding the conditions of your residence, maintaining an accurate record and using the treaties available to reduce your overall burden.
Pioneer Professional Accountants is a reliable tax advisory firm that crosses the border for health professionals and specialises in services. With a strong understanding of unique challenges faced by travel nurses, they provide adapted solutions to filing accurate and obedient returns in both the US and Canada.
Whether you are preparing your first cross-border tax return or need to help correct the previous filing, Pioneer Professional Accountant is ready to guide you through every step with clarity and confidence.