Can I Live in Canada or Mexico and Commute to a U.S. Job on a TN Visa?

Yes. If you live in Canada or Mexico and commute to a U.S. job on more than 75% of your workdays, your commuting days do not count toward the substantial presence test. Most daily commuters on a TN stay nonresident aliens and file Form 1040-NR, reporting only their U.S. wages.

How the Commuter Rule Works

You compare the days you commuted from your home in Canada or Mexico with all the days you worked in the U.S. that year. If commuting days are more than 75% of your U.S. workdays, none of them count. Days you spend in the U.S. for other reasons, such as a weekend trip, still count.

For example, Daniel lives in Windsor, Ontario, and works in Detroit on a TN. He commutes on 230 of his 240 U.S. workdays, about 96%, so those 230 days are left out of the test. With no other U.S. stays in recent years, his 10 remaining days are far below the 183-day threshold, so he files Form 1040-NR on his U.S. wages.

Your Home Country Still Taxes You

As a resident of Canada or Mexico, you also report your U.S. wages on your home-country return. The U.S. tax treaty with each country lets your home country credit the U.S. tax you paid, so the same income is not taxed twice. You also generally pay U.S. Social Security and Medicare on wages from a U.S. employer, and you may need a nonresident return in the state where you work.

If you move to the U.S. instead of commuting, the rules change. Our guide to the TN visa for Canadians and Mexicans covers residency, your first-year return, and the accounts you keep back home.

This answer provides general information and is not tax advice. Speak with a qualified tax professional about your situation.