apply for non-resident of Canada

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zwz002
Posts: 4
Joined: Tue Oct 01, 2019 10:01 pm

Re: apply for non-resident of Canada

Post by zwz002 »

nelsona wrote:
> 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.
So the time has finally come. We are departing Canada this week and will be selling our current primary residence in Canada soon (but closing will probably take a month or two). My employer still wants me to do some more work with them, but would like to convert me from an employee to a contractor. My last day as an employee will be the same day I depart Canada. I haven't cancelled/changed any credit cards, bank accounts, and TSFA/RRSP. So my questions are:
1. In this case, how do I determine the date that I no longer am a Canadian tax resident? Is it the date of my departure or the date that I cut my significant residency ties?
2. If my date of departure is the date that non-residency takes place, what happens to the capital gain on my primary residence when it's sold?
3. I know Nelsona mentioned NR73 is probably unnecessary. If I don't submit NR73, I will file 2021 taxes next year as a resident for January and input my date of departure/date of cutting residency ties/selling house, and file the rest of the year as a non-resident until CRA requests that I file NR73 right?
4. I acquired another property in the US two months ago. As I am still a Canadian resident when the property was acquired, my understanding is that the departure tax exemption wouldn't apply to this specific property, as it was acquired after I last became a Canadian resident, even though I'm still within that first 60 months period when I leave Canada. If so, how do I determine the current market value for this property?
5. Once I leave Canada, I will commence my work as a contractor abroad for the same Canadian company. I'll likely get paid in Canadian dollars to the same accounts for my payroll currently. How does income tax work in this case? Is there withholding from the Canadian side? Do I include this income when I file my 2021 non-resident taxes? All the stuff I see about non-resident contract is about work performed in Canada, nothing much on work performed abroad though.
Just wanna thank Nelsona for all your contribution to this site again. I definitely benefited a whole lot while I was planning my move from the US and Canada and now leaving Canada as well.
nelsona
Posts: 17014
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: apply for non-resident of Canada

Post by nelsona »

1. It is the day you move (presumably into a permanent home in US).
2. There is none. It was your primary residnce, and you have ayear to sell before ny gains would be accrued.
3. You will be an emigrant for 2021. There is no separate return for before and after your departure. You will report world income until you move and only certain Cdn-sourced income thereafter. They will not ask for NR73.
4. I think you have that reading of the 60 months incorrect (it applies if you owned property before moving TP Canada not from), In any event, property you have owned for two months must be reported for deemed deposition purposes, but it would hardly have gone up in value. But if it has, report the gain and pay tax (in spring 2022). Ask your realtor if the value has gone up.
5. It will be exempt of Cdn tax, as a contractor working in US.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
NBZ
Posts: 2
Joined: Fri Apr 30, 2021 6:10 pm

Re: apply for non-resident of Canada

Post by NBZ »

Hi all, sorry to bump an old thread. I thought I'd post my question here as it seems related to the earlier discussion.

In October last year, I moved from the US to Canada on a work permit and began working in Canada. Prior to the move, I was working in the US as an independent contractor for a Canadian company (the same company that I subsequently joined as an employee after moving to Canada). The work was done remotely and I was a resident of the US through that whole period.

My question is: do I pay US taxes on the income earned as an independent contractor, or do I pay taxes in Canada?
nelsona
Posts: 17014
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: apply for non-resident of Canada

Post by nelsona »

The income you earned as an independent contractor while living in US is reported only on your US return.
The Cdn work income is reported on both returns.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
NBZ
Posts: 2
Joined: Fri Apr 30, 2021 6:10 pm

Re: apply for non-resident of Canada

Post by NBZ »

Thank you for the clarification!

For the CDN work income that I report on the US return, will I also have to pay US taxes on that? Or will I be able to claim the Foreign Tax Credit based on the fact that I paid Canadian taxes on that same income?

By the way I am not a citizen of either the US or Canada, in case that's relevant.
nelsona
Posts: 17014
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: apply for non-resident of Canada

Post by nelsona »

You will want to file a full year 1040 for 2020, becasue it is better that dual-status, so you will include all 2020 income on that, so yes you include the CDn income. You can then tax foreign tax credit, or you can take froeign earned income exclusion, when you qualify later in the year.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
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