apply for non-resident of Canada

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maskdoll
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apply for non-resident of Canada

Post by maskdoll » Wed Aug 21, 2019 8:21 pm

My husband is considering applying for non-resident of Canada to avoid filing CRA tax returns.
He works in California full time, but I am living in Canada with kids. We have a home here with some mortgage on it.

I guess it's not likely to get approved by CRA for non-resident. Am I right?

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Sun Aug 25, 2019 9:40 pm

He would be considered a deemed non-resident, which is exactly treated like a non-resident. This would be if he doesn't visit you, but instead you visit him.
He can generally decide this himself, and then only supply proof if asked. The starting date would be when he left Canada.
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zwz002
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Re: apply for non-resident of Canada

Post by zwz002 » Tue Oct 01, 2019 10:50 pm

I have a similar question so I figured I'll ask here instead of starting a new thread. My wife and kids and I moved from the US to Canada last year as PR and plan to become Canadian citizens once we meet our residency requirements. We plan to leave Canada after we receive our citizenship and move back to the US. We own a house in Canada now as well as a few rental properties back in the US. I want to leave before we hit 5 years so there's no departure tax levied on my assets outside of Canada. My question is, if my goal is to become non-resident of Canada for tax purposes after we get our Canadian citizenship, what are some of the things that I need to do to make sure we are factual/deemed non-resident? For instance, can I keep the property that we own and not rent it out after we leave? Can we still come to Canada for short periods of timetime for vacation or kids camps? Thanks!

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Wed Oct 02, 2019 7:03 am

Because of the US/Canada treaty, once you and your family physically move to US and live there, you are a non-resident of Canada for tax purposes, regardless of how many other property/financial ties you have in Canada. visits would not impact this.
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zwz002
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Re: apply for non-resident of Canada

Post by zwz002 » Wed Oct 02, 2019 10:06 am

Thanks Nelsona. So then why wouldn't the OP's husband be able to visit her in Canada in order to stay non-resident?

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Wed Oct 02, 2019 4:45 pm

Because a spouse still living in Canada is a major tie, which must be outweighed by more ties in US. By visiting that spouse one is showing that their center of living is still Canada making them remain CDn tax resident, rather than if the spouse visiting US instead.

Once the entire family moves to US, as would be in your case down the road, visits to Canada are no more meaningful that visits to any other country.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

zwz002
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Re: apply for non-resident of Canada

Post by zwz002 » Fri Jul 17, 2020 4:52 pm

nelsona wrote:
> Because of the US/Canada treaty, once you and your family physically move
> to US and live there, you are a non-resident of Canada for tax purposes,
> regardless of how many other property/financial ties you have in Canada.
> visits would not impact this.
Sorry for bumping up this old thread. If I'm going to use the tax treaty to prove residency in the US, do you advise filing NR73 on the year of departure from Canada?

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Fri Jul 17, 2020 6:45 pm

No. Simply declare your departure daye on your return in the year you leave. If CRA doubts you, let them ask for NR73. From what you described, as I expalined before, you won't be making a treaty claim, but will be "simple" non-resident.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

fellow
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Re: apply for non-resident of Canada

Post by fellow » Fri Sep 11, 2020 7:06 pm

I am asking about NR73 processing time averages these days: I know years ago the processing time for CRA and the NR73 was quite quick. I did some google searches and information is really sparse. I need a NR73 in order to cash out my LIRA, once I move to the US in the next few months. Do you know what the processing time is currently for nr73? (I heard someone else on another forum say 6 months!) thank you in advance.

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Mon Sep 14, 2020 9:53 pm

NR73s are taking a long time now. You will not be able to submit until you actually leave and establish foreign ties.

You will simply need to be patient to access the LIRA (which will be fully taxable in US, btw).
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

fellow
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Re: apply for non-resident of Canada

Post by fellow » Mon Sep 14, 2020 10:45 pm

I described it wrong. It is not technically a LIRA, it is a provincial pension fund. I was told by the financial institution that all I need to do is submit nr73, and they will tax me at 25% on the full amount, then transfer to overseas (us). I am not understanding that I will be taxed yet again in the US, when there is a tax treaty in place? (why be taxed twice?)

Pity about the processing time.

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Tue Sep 15, 2020 5:30 pm

You will be taxed in US, because you will be living in US when you receive the money. The US will credit you the tax you pay in Canada however.

But you must report it, along with any other Cdn income you receive after moving to US.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

fellow
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Re: apply for non-resident of Canada

Post by fellow » Tue Sep 15, 2020 6:04 pm

Okay, thanks for explaining it more :)

(for my understanding then: Canada taxes me 25% then send the money to me in the US. Once I get it, when taxes are done, I report it on US taxes and get taxed based on US rates. I will then get credit for the 25% taxes I paid in Canada).

I am uncertain how the credits works, but I guess I will wait and see. (Do I ultimately then pay less taxes in US to make up for the 25%?) If you can give a brief explanation, that would be great.

thanks again! this is all new to me.

nelsona
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Re: apply for non-resident of Canada

Post by nelsona » Tue Sep 15, 2020 6:10 pm

You will report the income on your 1040. On a separate form (1116), you will report the Cdn income that you have included on your 1040, and the Cdn tax you paid on that income. Then the form will calculate the reduction in US tax.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

fellow
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Re: apply for non-resident of Canada

Post by fellow » Wed Sep 16, 2020 12:43 pm

okay thanks. Much appreciated.
Not sure how that would work for 25% tax on over $200K CAD. ! :) not too confident I will get that recouped on the US side. :)

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