Canadian Departure Tax

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a_bushati
Posts: 8
Joined: Mon Mar 04, 2019 7:41 pm

Canadian Departure Tax

Post by a_bushati » Sun Mar 31, 2019 12:30 pm

All,

I am a canadian citizen. Was working in Canada (for canadian employer) from january 2018 to April 2018. Then i moved in the States with a US employer under a TN visa. I have severed my ties with Canada so i will have to file a departure tax.

I am having a tough time with the following:

I am using turbotax to do my canadian taxes, and there is a question there that i am not sure how to address: It says that I must also enter my income from Canadian and foreign sources for the part of the year I was not a resident of Canada.

Does this mean that i have to report the US salaries that i received after i left Canada?

Thanks

nelsona
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Location: Nowhere, man

Re: Canadian Departure Tax

Post by nelsona » Sun Mar 31, 2019 7:00 pm

This is asked to determine is you qualify for full tax credits in Canada or not. It will not be taxed in Canada.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

a_bushati
Posts: 8
Joined: Mon Mar 04, 2019 7:41 pm

Re: Canadian Departure Tax

Post by a_bushati » Sun Mar 31, 2019 9:05 pm

Thanks Nelsona!

What about the following 2 questions that i get for Schedule A - Statement of World Income:

1. Specify Income from Canadian Sources:
Net interest and other investment income - $...
Other Canadian-source income - $...

2. Specify Income from sources outside Canada
Net employment income - $...
Net pension income - $...
Net interest and other investment income - $...
Taxable capital gains - $...
Net rental income - $...
Net self-employment income - $...
Other foreign-source income - $...

1. Do i input again my canadian income (earned while i was employed in Canada) plus any interest i would have earned from my canadian investments? I have already included these in the income portion (via T4, T5 etc) as part of the income earned for the part of the year i was in canada...

2. Do i have to report here my US wages (earned after i severed my ties with canada)?

I was reading T4058 - but not much is explained there.

Thanks,

nelsona
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Re: Canadian Departure Tax

Post by nelsona » Sun Mar 31, 2019 9:31 pm

Please read the instruction, the statement of world income applies to income AFTER deperature. Most Cdn income earned after departure is flat taxed and not included on your tax return. That is why they are asking what Cdn income you had after leaving.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

yogeshddd
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Joined: Fri Mar 29, 2019 10:43 pm

Re: Canadian Departure Tax

Post by yogeshddd » Mon Apr 01, 2019 6:16 pm

Hello,

I'm in the same boat. I tried using (Genutax) https://www.genutax.ca/(completely free) and the software works like a charm.

Regrading 'Statement of World Income', I contacted CRA and they mentioned that this form is primarily for Non-Residents (and not for Emigrants). I was requested to include the following information in a separate sheet of paper

* Net Income from Canadian Sources (Part XIII) after leaving Canada
* Net Income from Canadian Sources (not included under Part XIII) after leaving Canada
* Net foreign income after leaving Canada

Here's the cool thing. GenuTax software has a page (as part of questionnaire) where you have to fill out the info. I just took a screenshot of the page and included it in the tax return.

Thanks,
Yogesh

nelsona
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Re: Canadian Departure Tax

Post by nelsona » Mon Apr 01, 2019 7:07 pm

Correct. One is not a non-resident in the year of departure. The items reported on the Statement, and on schedule A however are the same, and is intended to determine how much of your personal credits you are entitled to for the portion of the year after departure.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

a_bushati
Posts: 8
Joined: Mon Mar 04, 2019 7:41 pm

Re: Canadian Departure Tax

Post by a_bushati » Wed Apr 03, 2019 6:29 pm

@Yogeshdd

Are you doing a dual-status alien return in USA (1040 and 1040NR as a statement)? I am not sure if this is the case for me. After reading Pub519 see below, it appears that i should file a dual-status return:

"You can be both a nonresident alien and a resi-dent alien during the same tax year. This usu-ally occurs in the year you arrive in or depart from the United States. Aliens who have dual status should see chapter 6 for information on filing a return for a dual-status tax year."

What are your thoughts? Thanks

nelsona
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Re: Canadian Departure Tax

Post by nelsona » Wed Apr 03, 2019 7:00 pm

I never recommend dual status. File full year 1040 is better. And if you do not meet SPT, file only 1040NR.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

yogeshddd
Posts: 5
Joined: Fri Mar 29, 2019 10:43 pm

Re: Canadian Departure Tax

Post by yogeshddd » Wed Apr 03, 2019 8:42 pm

I intend to file 1040 as per Nelsona's recommendation.

a_bushati
Posts: 8
Joined: Mon Mar 04, 2019 7:41 pm

Re: Canadian Departure Tax

Post by a_bushati » Wed Apr 03, 2019 8:47 pm

Thank you both. I wasn't sure if i had the option to file 1040 full year.

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