The 14-Day Rule for a Canadian's Florida Condo: Tax-Free in the US, Still Taxable in Canada

US tax law has a small, well-known exclusion: a personal residence rented for fewer than 15 days in the year produces no US taxable rental income and no deductions. It was written for homeowners renting during a local event, and it applies equally to a Canadian's Florida condo. A snowbird who rents the condo for two weeks in high season owes no US tax on the rent and files nothing in the US for it. What the rule does not do is reach across the border: Canada has no equivalent, and the rent is fully taxable on the Canadian return as rental income, in Canadian dollars, with no foreign tax credit because no US tax was paid.

Key takeaways

• The rule (section 280A(g)): if a dwelling unit is used as a residence by the owner and rented for fewer than 15 days in the year, the rental income is excluded from US gross income and no rental deductions are allowed. Fourteen rental days is the maximum; fifteen ends it.
• Applies to non-residents: the exclusion is a statutory exclusion from gross income; it applies to a Canadian owner's 1040-NR as it does to a US owner's 1040. Under the exclusion there is no effectively connected income and no need for the section 871(d) election.
• Withholding: Airbnb and other platforms withhold 30% of payouts to foreign hosts without a Form W-8ECI. Under the 14-day rule there is no US tax to elect into, so W-8ECI is not the right form; the host either accepts the withholding and files a 1040-NR to recover it (reporting the income as excluded), or the platform accepts a W-8BEN with an explanation. In practice, filing to recover is the reliable route.
• Canada: the rent is income on Form T776, converted at the payment-date or average rate; expenses for the rental period are deductible under Canadian rules; the property is on the T1135 if foreign property exceeds $100,000 at cost. No foreign tax credit (no US tax paid).
• Day 15: at 15 or more rental days, the exclusion ends for the whole year; all rental income is reportable in the US, expenses are allocated between rental and personal use under section 280A's rules, and the section 871(d) election is needed to avoid 30% on gross.

How the exclusion works

Section 280A(g) says that if a taxpayer uses a dwelling unit as a residence during the year (personal use exceeding the greater of 14 days or 10% of rental days) and the unit is rented for fewer than 15 days, the rental income is not included in gross income and no deductions attributable to the rental are allowed. The condo must be a residence: a snowbird who lives in it for months qualifies. The rental days are counted by days actually rented at fair rental value; days rented to family at a discount count as personal days.

A Canadian owner renting for 14 days at $500 a night earns $7,000 US-tax-free. There is no reporting line for it on the 1040-NR; the income is simply not gross income.

Platform withholding

Short-term rental platforms treat foreign hosts as subject to 30% withholding on gross payouts unless the host provides Form W-8ECI certifying that the income is effectively connected with a US trade or business. A host relying on the 14-day exclusion has no effectively connected income (the income is excluded altogether), so W-8ECI is not accurate. Platforms will generally withhold at 30% on a W-8BEN because rental income is not treaty-reduced. The host then files a 1040-NR for the year, reports the withholding from the Form 1042-S, reports the rental income as excluded under section 280A(g) with a statement, and claims the refund. Some hosts provide W-8ECI anyway and treat the income as effectively connected, filing a 1040-NR that reports it and deducts expenses; that forfeits the exclusion but avoids the withholding. The exclusion is usually worth more.

Florida's taxes

The 14-day rule is federal income tax only. Florida's 6% sales tax on transient rentals and the county tourist development tax (6% in Miami-Dade, 5% in Broward, 6% in Palm Beach) apply from the first night. Platforms collect and remit these in most Florida counties; a host renting directly registers with the Florida Department of Revenue and the county.

Canada

The Canadian return reports the rent on Form T776 as income from foreign rental property, in Canadian dollars, and deducts the expenses attributable to the rental period (a proportionate share of condo fees, utilities, insurance, and the platform's fees). Capital cost allowance is optional and usually not claimed. The net is taxed at marginal rates. Because the US collected nothing, there is no foreign tax credit. The condo is specified foreign property for the T1135 if the owner's total foreign property exceeds $100,000 at cost.

Day 15

At 15 rental days the exclusion is lost for the entire year, not just for day 15 onward. All rental income is US-taxable; expenses are allocated between rental and personal use by the ratio of rental days to total use days (with the mortgage interest and property tax portion attributable to personal use deductible only as itemized deductions, which a non-resident cannot claim); rental deductions are limited to rental income if personal use exceeds the greater of 14 days or 10% of rental days; and the owner needs the section 871(d) election on the 1040-NR to be taxed on net rather than 30% of gross. The platform withholding becomes a deposit against real tax.

Worked example

A Toronto couple own a Naples condo they use from December to March. They rent it on Airbnb for 12 nights in October at $400 a night: $4,800, less $600 of platform fees.

• US. Fewer than 15 days; used as a residence; section 280A(g) exclusion. No US income tax. Airbnb withholds 30% of the payout ($1,260); the couple file a 1040-NR reporting the 1042-S withholding and the exclusion, and recover $1,260. Florida transient taxes collected by Airbnb from the guests.
• Canada. $4,800 CAD-equivalent on T776; $600 of fees and about $500 of period expenses deducted; roughly $3,700 of net rental income taxed at their marginal rate, about $2,000 of Ontario tax. No credit.
• If they rent 20 nights. The exclusion is gone; $8,000 of US rental income; expenses allocated by 20 rental days over about 110 total use days; 871(d) election; likely a small US tax; Canada taxes the net with a credit for it.

Official sources

"There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses." — Internal Revenue Service, Topic No. 415, Renting Residential and Vacation Property, https://www.irs.gov/taxtopics/tc415

"You must give Form W-8 ECI to the withholding agent or payer if you are a foreign person and you are the beneficial owner of U.S. source income that is (or is deemed to be) effectively connected with the conduct of a trade or business within the United States." — Internal Revenue Service, About Form W-8ECI, https://www.irs.gov/forms-pubs/about-form-w-8eci

"This guide will help you determine your gross rental income, the expenses you can deduct and your net rental income or loss for the year. It will also help you fill in Form T776, Statement of Real Estate Rentals." — Canada Revenue Agency, Rental income, https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036/rental-income.html

Practitioner note

The 14-day rule is real and it is worth using, but Canadians should know two things about it: the platform will withhold anyway and a 1040-NR gets it back, and Canada taxes the rent in full. It is a US exclusion, not a cross-border one. And the count is days rented, not bookings; a fifteenth night in December undoes the whole year.

See also: For the full sequence of a Canadian move to Florida, see the Canada-to-Florida tax guide, and browse every cross-border tax topic guide, organized by situation.

Next step

Fairlight prepares the 1040-NR recovering platform withholding under the 14-day exclusion, and the Canadian return reporting the rental income. See cross-border pricing or book a call.