Living in St. Catharines Ontario vs. Buffalo NY (credit, student loans)

[cojoe1]

I am a canadian working out of Toronto and my wife is american working in Buffalo. We moved to St. Catharines, Ontario recently after getting married due to it's distance between both cities and she is in the process of applying for perminent residence. I only tarvel to Toronto 1-2 times per week so the commute isn't that bad. We each make approx. $50,000/year ($100,000 combined) before taxes and we both have good health care coverage through our respective jobs. Would living in the Buffalo area be a good move with respect to taxes and all round cost of living. Also, there is a tax credit she will recieve for the taxes she pays to NY (income tax) that she will put towards her Canadian income tax. Is this tax credit equal to (dollar for dollar) the amount she will see on her US tax form. We would hate to to pay for a move only to find out that we are still paying as much out as we were in Ontario. We are both in our twenties (just starting out together) and are trying to pay off our...my student loans. We will eventually be looking to buy a house just outside the city (St. Catharines or Buffalo). Thanks for any insight you can provide us.

[Cornerguy1]

I'm a little puzzled.

Also, there is a tax credit she will recieve for the taxes she pays to NY (income tax) that she will put towards her Canadian income tax.

If your wife is a US citizen working in the United States, why on earth would she be paying Canadian Income Tax? If she declares herself as not residing in New York State, is she not exempt from state income tax, or at least eligible for a refund of state income tax?


Canadian tax questions are best addressed to Canada Revenue Agency. Check your blue pages or use this link:

Welcome to the Canada Revenue Agency / Bienvenue à l'Agence du revenu du Canada

[cojoe1]

From what I've read, Canada bases there income tax on residency and the US on Citizenship. So no matter where you live in the world, if you are a US citizen you will always have to file for your US taxes. But, there is a treaty written into the tax system which accounts for the fact that you may be paying taxes somewhere else. So, in our case, because she lives in Canada, she will have to pay Canadian income tax. She is paying tax to NY off each paycheck, but the Canadian Revenue Agency will give her a credit towards the tax she has paid to NY, thus not taxing her twice. The only thing we have yet to determine is if the credit is for the precise amount of tax she pays to NY state.