Returning Canadian citizen

[xatham]

Hi all,

This forum was extremely helpful last time when I left Canada to go live in the US. Now I am considering coming back to Canada. I am trying to figure out whether or not this is a good idea based mainly on tax liability.

My situation is that I'll be moving from the US to Canada around March. I will be making some money at my old job in the US, and some at my new job in Canada. To give some general numbers, I expect to make ~90K CAD in Canada in 9 months, and 30K USD in the US in the first 3 months. However, I'll also be paid out my ~350 hours of vacation time, for another 30K. In total, I expect to make about ~90K CAD from my Canadian job, and ~90K USD from my US job.

Here are my questions:

1) Normally I would file form T2209 to claim a foreign income tax credit. However, if I understand correctly, the formula deems I would only be able to claim half the tax owed to the US (foreign income x basic federal tax / net income = 90K x federal tax / 180K = 1/2 federal tax) as a tax credit in Canada. That would then leave me in a position where I would be double taxed on nearly half my US income. Correct?

2) Section 114 of the Canada Tax Code seems to indicate that for Canadians "permanently entering Canada", I can exclude the portion of the income which were accrued when I was not yet a Canadian resident. In this case, I would only report to CRA the income I made in Canada, and only report to the US the income made in the US (under the non-resident NR1040 form), correct?

3) Other sections of the Canada Tax Code seem to indicate that if you spend more than half the year in Canada/are a resident at any time in Canada, you owe taxes to Canada for the whole tax year. That seems in contradiction with section 114. Which wins?

4) if my last paycheck is technically deposited in my bank account after I leave the US, does that count as income accrued while I am a resident of Canada?

5) Can Canada decide that since I was only gone 3 years, even though I had originally severed all ties with Canada (no leftover furniture, family, property, healthcare card, car insurance, address, etc...) and intended to leave permanently, that I was only "temporarily" gone and counted as a Canadian resident all along, forcing me to re-do all taxes and so on?

[nelsona]

3, This doesn't apply to you. That is for non-residents spending too much time in Canada. You are simply returning to Canada in March, Period.
5. As long as your departure return was accepted previously, you will not be determined to never have left. Even if you had come back 6-9 months after leaving,

1,2,4. US income received after becoming Cdn resident is going to be taxed by Canada. no getting around that. Your best strategy is to try and get most of that money before leaving. I'll look into the wording of 114, but generally even back-pay is considered taxable income at the moment is was received.