Emigrants and Income Tax and Canadain Tax Software

Greg · Post by **Greg** » Wed Feb 20, 2008 3:56 pm

I have read over several times T4056 â€“ Emigrants and Income Tax for the year that one moves out of Canada but desperately need some clarification.

If we lived in Canada from January 1st until June 7th Then moved to the USA family and all breaking residential ties to Canada on June 7th.

When filling out our Canadian income taxes with tax software it came to the following 4 options

I was a non-resident of Canada

I was a deemed non-resident of Canada

I was a deemed resident of Canada because I stayed for 183 days or more in 2007

I was a deemed resident of Canada for other reasons

Not sure which one would be correct answer Any info would be great thanks.

nelsona · Post by **nelsona** » Wed Feb 20, 2008 4:01 pm

What about resident with a departure date.

Lookit. If the software doesn't work, do it by hand. It's not like you can e-file.

Greg · Post by **Greg** » Wed Feb 20, 2008 4:07 pm

True, doing it by hand would solve the problem. When I choose "I was a deemed resident of Canada for other reasons" There is a spot latter that gives Departure Date.

I just did not think the other three options applied, but thought I would check with others that may have used Canadian tax prep software for there departing returns.

nelsona · Post by **nelsona** » Wed Feb 20, 2008 5:07 pm

Do NOT use deemed resident.

Use RESIDENT of the province you left, and put a departure date.

When I say" by hand" I mean use the software as far as it is corrct, and then override what you know to be wrong, if indeed it is wrong.

Ufile works fine with this by the way.

nelsona · Post by **nelsona** » Wed Feb 20, 2008 5:08 pm

The reason you cannot use any of the other categories is (a) they don't apply to your and (b) you won't pay the correct provincial tax.

Greg · Post by **Greg** » Wed Feb 20, 2008 6:46 pm

Thanks I will try ufile, because Quicktax does not let you get past this screen without selecting one of those four options. The first question it ask's is what Province or territory of residence as of Decemebr 31. Once you select Non-Resedent your you get those four options and you have to choose one.

I don't think it will allow you to edit the information.

nelsona · Post by **nelsona** » Wed Feb 20, 2008 7:24 pm

You seem to have a block on this. I have said now THREE TIMES, that you should indicate RESIDENT of your Province, and THEN select a departure date.

nelsona · Post by **nelsona** » Wed Feb 20, 2008 7:25 pm

You are NEVER a non-resident until the year AFTER your departure. I thought this was pretty clear in the Emigrants guide.

Greg · Post by **Greg** » Wed Feb 20, 2008 7:36 pm

Nelsona Thanks allot, the block has been removed thanks to you.

I get it now thanks again.

rlphwns · Post by **rlphwns** » Thu Feb 21, 2008 9:34 am

Iâ€™m wondering how many people make this mistake when doing their departure return and using tax software. I imagine some have answered Non-Resident for the question of Province or territory of residence as of December 31 and it not calculating Prov tax.

I guess the thinking is I moved in June, so on December 31 I was a Non-Resident.

Greg · Post by **Greg** » Thu Feb 21, 2008 9:59 am

Once Nelsona pointed this out to me I went and read the instructions again for my province in my case Ontario and right at the top of the instructions for ON428 it tells you.

â€œThe term end of the year means December 31, 2007, if you were a resident of Ontario on that date, the date you left Canada if you emigrated in 2007, or the date of death for a resident of Ontario who died in 2007â€.

nelsona · Post by **nelsona** » Thu Feb 21, 2008 10:09 am

I'm pretty sure that this is also explained in the software.

dhirenasha · Post by **dhirenasha** » Fri Feb 22, 2008 10:20 am

Greg,

The software discussion was going on for around 4-5 posts before u posted ur questions. As Nelsona suggested me, there's is no point in doing the online versin of Quick tax in Canada. Online version does not support the emirant date entry. I called them and downloaded the CD version online and then put my emigration dates. As of 31st Dec put it as Ontario and then change your current address to to your new address. Quick tax allows you to go to forms and change it. Anyway you won'e be eligible to go for a Netfile , as you are an emigrant. So you will have to print all of them and send it. AS mentioned earlier somewhere for the first year the province of residency is Ontario when you file taxes, next year should be non-resident (if you file!!!)

Calling CCRA international tax office was a gamble for me as they suggested me to file it as non resident. I had to correct them. Emigrant guide page 7 , bottom right clearly says that as an emigrant for the first year the forms should be as of your last province.

Hope this would help!!!

nelsona · Post by **nelsona** » Fri Feb 22, 2008 10:28 am

Calling CRA is NOT a gamble, as a "gamble" implies a chance at winning.

Calling CRA (or IRS) is suicide.

Greg · Post by **Greg** » Fri Feb 22, 2008 10:44 am

Quick tax in Canada on-line version does support departure date, but only if you put in a a Province or territory of residence as of December 31. It will ask you for the departure date latter in the questioning under the Moving Section. You enter in Day and Month of you departed and then it makes adjustments for your non refundable tax credits est.

The part that needs to be edited is your current mailing address; it will not allow you to put a forging address in. Once you have chosen your Province.

I have always mailed my returns to CRA, and never use Netfile. I always seem to owe Canada money and am in no hurry to get it to them before the due date.

Calling CCRA international tax office, I found is a waste of time these people are only the first line of support and really no absolutely nothing.