What is substantial presence test?
A common misconception is that spending up to 182 days each year in the US will have no US tax effect on a Canadian. This is not correct!
You will meet Substantial Presence Test if you spend at least 31 days in the current year “and” if the result of the below formula is equal to or more than 183 days.
(Total no. of days you have spent in the US in the current year) PLUS (No. of days spent in the previous year divided by three) PLUS (No. of days spent in the previous-to-previous year divided by 6)
SPT = [(CY days)] + (CY-1 days x 1/3) + (CY-2 days x 1/6)
If the result of this formula is equal to or more than 183 days, you have met the substantial presence test. This is important to mention that a certain number of days spent in the US are not considered while calculating the Substantial presence test; days spent unintended due to a medical emergency, days used to commute to work in the United States, less than 24 hours spent while transiting through the United States and days spent by certain students in the United States.