In-between relocation stage

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Joined: Tue Feb 07, 2023 12:03 am

In-between relocation stage

Post by polska »

I am Canadian who obtained a L1 visa in October 2022, started working for the US company remotely a week later, however only travelled to the US, rented a place and stayed for a month, then returned to Canada. My wife stayed/worked in Canada for all of 2022. We flew to the US mid January 2023 and are staying at the rental place. We will go back to Canada in 2 months and stay until we sell our house. Right now all our belongings (house, car, etc), driver license, OHIP, and bank accounts are in Canada. We are in the in-between relocation stage.
For the 2022 tax year, our situation seems pretty simple. We fill Canadian taxes as residents, so I will need to include my US income from October to December and pay any tax difference in Canada. In the US, I will fill as a no resident (1040NR).
1.- What exchange rate is however used to convert from US to Canadian on the CRA declaration? Is there a rule for this?
2.- One account I spoke to mentioned I could get a refund in my US declaration for the time from October-December I was still in Canada as US tax can be pro-rated. Is this true? I did not find anything in this forum
For the 2023 tax year, we plan to declare a departure date (become non-residents for Canadian taxes) as soon as we move out of Canada, then fill as residents in the US.
3.- we are considered Canadian residents until the point we move out (compelling event will be the truck with all our belongings rolling out + us flying back to the US to finally stay). Is our understanding correct? Working solely for a US company in 2023 has no bearing on tax residency status, right?
4.- We will fill out taxes in Canada and declare our income from the US for the whole year, however CRA will only tax our US income for the period we are still residents. Is this the right understanding?
5.- We want to maximize RRSP contributions to minimize income to be reported to CRA (solely US in 2023) and potentially pay no taxes in Canada. Can we continue to contribute to our RRSP after we become non-residents in Canada for tax purposes? or do we need to do all RRSP contributions prior to this date?
I appreciate the feedback,
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