I Commute From Windsor to Detroit. Am I a US Tax Resident?

Usually not, and the rule is a number rather than a judgment call. If you commute from your home in Canada to work in the US on more than 75% of your workdays during the working period, and each trip is finished inside a 24-hour period, none of those commuting days count toward the US substantial presence test. Slip under 75%, or start staying over, and every one of those days goes back into the count.

Does commuting from Windsor to Detroit make me a US tax resident?

Usually not, so long as the commuting pattern holds. If you aren’t a green card holder, US residency runs on the substantial presence test, which counts the days you were physically in the US. The statute pulls regular Canada-to-US commuters out of that count before the test runs, so a Windsor resident who drives to Detroit and home again each day can work in the US all year and still be a nonresident alien.

“If an individual regularly commutes to employment (or self-employment) in the United States from a place of residence in Canada or Mexico, such individual shall not be treated as present in the United States on any day during which he so commutes.”

That’s IRC 7701(b)(7)(B), and 26 CFR 301.7701(b)-3(a)(4) repeats it. The IRS gives it one bullet on its substantial presence test page with no mechanics at all, which is why the question keeps coming back.

Notice how narrow the relief is. Days come out “for purposes of section 7701(b) and the regulations under that section”, the residency section, and nothing more. Excluded days do stay out of the two-year lookback too, so a clean commuting year builds no carry-in. That lookback’s arithmetic belongs to how many US days a Canadian can spend before residency bites; in one line, the test counts all of this year’s US days, a third of last year’s and a sixth of the year before, and asks whether the total reaches 183.

What counts as commuting “regularly”, and what is the 75% measured against?

More than 75% of your workdays during the working period, with each individual trip completed inside a 24-hour period. Both conditions have to hold. The regulation says “more than 75%”, so exactly 75% fails, and the fraction is decided for a whole working period at once. Miss it and every commuting day in that period counts.

“An alien individual will be considered to commute regularly if the individual commutes to the individual’s location of employment or self-employment in the United States from his or her residence in Mexico or Canada on more than 75% of the workdays during the working period.”

The working period is defined too, and it’s usually shorter than a calendar year: first day in the year you’re in the US for that employment, to the last. Seasonal work gets a period per season, so the regulation says there can be more than one in a year, and one can start in December and end the following spring.

The regulation works three of its own examples:

The regulation’s own example	US workdays / total workdays	Fraction	Are the days excluded?
Example 1: a temporary US assignment, with seven days worked back in the home office	59 / 66	89.4%	Yes
Example 2: two ski seasons, with 20 days worked in Canada in each season	90 / 110	81.8%	Yes
Example 3: a sole proprietor running offices on both sides of the border	75 / 105	71.4%	No, and every US day counts

Example 3 is the one to sit with. That person drove to a US office on 75 separate days and the regulation still treats every one of them as a day of presence.

Does a work-from-home day in Windsor cost me the exclusion?

It works against you, and this is the piece almost nobody publishes. A day you work from home in Windsor doesn’t drop out of the calculation. It counts in the denominator and it isn’t a day you commuted, so it pulls the fraction down. The regulation’s denominator counts Canadian working days too.

“The term workdays means days on which the individual works in the United States or Canada or Mexico.”

Which is why a hybrid schedule is where this rule quietly breaks. Four days on site and one at home leaves you at 80% and the exclusion holds. Three on site and two at home puts you at 60%, and the exclusion is unavailable for that working period.

What happens if I stay overnight in Detroit?

That day stops being a commuting day. The regulation defines “commutes” as a round trip completed inside 24 hours, so a night on the US side isn’t a commute on those words, and the day becomes an ordinary day of presence. The day you drive back doesn’t qualify either, on our reading of (e)(1) rather than its words, because you didn’t start that day from your residence in Canada. Both days still sit in the denominator, so an overnight costs you twice.

“The term commutes means to travel to employment or self-employment and to return to one’s residence within a 24-hour period.”

The occasional version, a late shift or a conference, is usually survivable because the fraction has room in it. The structural version is where a commuter file turns into something else: if you keep an apartment or a room on the US side and use it during the week, those nights are ordinary presence days, and enough of them can push you over the substantial presence test on your own commuting schedule.

At that point both countries can claim you under their own rules and the treaty has to break the tie. The Canadian residency guide runs that cascade properly. The trigger is the part to hold on to: a place to sleep on the US side changes the day count, and the day count starts the chain.

Do the excluded days mean my Detroit wages escape US tax?

No, and mixing these two up is the most expensive mistake on this page. Getting your commuting days excluded settles a residency question. Where the wages get taxed is a sourcing question on a different rule, and compensation for work physically performed in the United States is US-source income. The sourcing statute carries no commuter carve-out at all.

	Days of presence, the residency question	Tax on the Detroit wages, the sourcing question
Governing rule	IRC 7701(b)(7)(B) and 26 CFR 301.7701(b)-3(e)	IRC 861(a)(3), IRC 864(b), treaty Article XV
What a qualifying commute does	Takes those days out of the US day count	Nothing at all
The test	More than 75% of workdays during the working period, each trip inside 24 hours	Where the work was physically performed
Usual result for a Windsor resident working in Detroit	Nonresident alien, if the fraction holds	US-source wages the US may tax, and a US return

IRC 861(a)(3) sources “compensation for labor or personal services performed in the United States” to the US, and its general personal-services exception needs all three of a stay of 90 days or less, pay of $3,000 or less, and a foreign employer. A Detroit employer fails the third here, because (C)(ii) would need the work performed for a foreign office and yours is performed for the Detroit one. IRC 864(b) makes performing those services a US trade or business on the same narrow exception, and the IRS says a nonresident alien engaged in a US trade or business must file a return.

The treaty doesn’t rescue it. Under Article XV(1), as replaced by the Fifth Protocol, employment income is taxable only in your country of residence “unless the employment is exercised in the other Contracting State”, and where it is so exercised, that other state may tax it. Article XV(2) carries an exception a Windsor-Detroit commuter usually falls outside: it needs either pay of $10,000 or less in US currency, or presence of 183 days or less in a twelve-month period together with pay “not paid by, or on behalf of, a person who is a resident of that other State and is not borne by a permanent establishment in that other State”. Where the Detroit employer is a US resident, that second limb fails however few days you spend there.

So on these facts the treaty stops confining the wages to one country, and relief from the overlap runs through a different article that this page doesn’t cover.

Can I just file as a resident of both countries and skip the treaty tie-breaker?

No. The Canadian side forecloses it, and the US side won’t process it. Where a treaty makes you a resident of the other country and not of Canada, ITA 250(5) deems you not resident in Canada, notwithstanding any other provision of the Act. So a US-side tie-breaker result doesn’t sit quietly beside a Canadian resident return. It closes the door on one.

“a person is deemed not to be resident in Canada at a time if, at that time, the person would, but for this subsection and any tax treaty, be resident in Canada for the purposes of this Act but is, under a tax treaty with another country, resident in the other country and not resident in Canada.”

On the US side there is a choice, and it isn’t the one people want. 26 CFR 301.7701(b)-7 works its own examples and they run to two options: file as a resident alien claiming no treaty benefits, or claim treaty residence and file as a nonresident. There’s no third route where you take the treaty position without disclosing it. Take it and the regulation says you “shall make a return on Form 1040NR”, now Form 1040-NR, with a statement attached, that the statement “must be in the form of a fully completed Form 8833”, and that skipping it carries a penalty the snowbird guide covers.

Weigh one more thing first. Even a won tie-breaker leaves a residue, because the same regulation says that for Code purposes other than computing your US income tax you’re generally still treated as a US resident. The snowbird guide works through what that costs, and the TN first-year guide covers the different case where you actually moved. Michigan’s own rules are separate again, and nothing here answers them.

What should I do next?

Work out your fraction before you assume anything, because it’s the only number here that decides the outcome. Pull the actual days rather than a typical week, count both sides of the border, and check whether any overnights broke a trip.

1. List every day you worked in the year, marking each as a US day or a Canadian day.
2. Find your working period: first US work day to last US work day.
3. Divide US commuting days by total workdays in that period. Over 75% keeps the exclusion.
4. Flag any day you didn’t get home inside 24 hours, and take it out of the numerator.
5. If the fraction fails, run the weighted three-year day count before you file anything.

If your schedule is about to change, do this in advance. A return-to-office policy that moves you from four days to three is a tax decision as well as a commute.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.