Canada tax Return as a resident + non-resident (leaving Canada)

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Leah12345
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Joined: Sat Mar 04, 2023 3:00 pm

Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Hello,
Would really appreciate your guidance. the more I do it, the more lost I get.

Timeline and income in 2022:
Jan 2022- started US employment, worked remotely.
Jan-April - lived in Canada, and had: Canadian income + US income + rental income in canada.

Left Canada in April, to US for work (the same employer I started with in January).
April-Dec 2022: have income from the US + rental income in Canada.

How do I file the Canadian tax return? Using turbotax.
I added a date when left Canada, and it seems working, as the return summary calculated the basic non-taxable federal amount as 1/3 of the 14000.
So that part works fine.
1) Do I report all income from all sources (Canada, US) for the entire 2022 year? Or just for Jan-April?

My understanding is I only owe tax for the worldwide income for Jan-April,befire I left Canada.
And then tax on the rental income for May-Dec.

2) Do i file one return for 2022,or 2 returns- one for Jan-April, another one for May-Dec?

Thank you!!!
nelsona
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Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by nelsona »

1. Just January to April. Your Cdn rental income after that date is handled differently.

What other Cdn income did you have post-departure?
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nelsona
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Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by nelsona »

2. As imentionned, your renatl income is reported on a 216 return, and you should have been having tax withheld monthly since may.
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Leah12345
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Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Thank you!

For (1), no other Canadian income except the rental one.
Leah12345
Posts: 12
Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

For (2), I do understand itsa different process.

Unfortunately, I did not inform the CRA regarding the departure last year
As a result, did not remit the 25% of the may- dec rental income. I only became aware just recently, when figuring out how to file the taxes.

What would be the easiest (and cheapest) solution now? Given I did not pay the 25% in may-dec 2022, and the situation is the same in 2023 - have mot remitted the 25%.

I will of course, just how? What will be the steps to arrange the tax owed payment?
Leah12345
Posts: 12
Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Leah12345 wrote:
> Thank you!
>
> For (1), no other Canadian income except the rental one.

For May-Dec, just the rental income.
nelsona
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Location: Nowhere, man

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by nelsona »

You will need to file a 216 return as soon as possible, reporting the rental income and expenses for the post-departure period. The quicker this is done the less interest you will have to pay, if any.
You need to arrange for someone (an "agent") to remit the monthly withholding to CRA.

You should also be filing asap an NR6 to reduce the required monthly withholding based on an estimate of your monthly rental income and expenses.

There are clear instruction on this on th CRA website.
https://www.canada.ca/en/revenue-agency ... t-tax.html
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Leah12345
Posts: 12
Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Thank you!

I called CRA, they set up a non-resident account number for me. Instructed to pay the Jan-Feb 2023 rent zsing that account.

But- for may-dec 2022 to file a non-resident tax return and ask for one-time forgiveness. Does it sound right?
Which return do I use?

Turbotax has a non-resident, section 216, and section 217 options.

Thank you again!!
nelsona
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Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by nelsona »

216, as I already mentioned, twice.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Leah12345
Posts: 12
Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Thank you!!
Leah12345
Posts: 12
Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Thank you again, Nelsona. I am done with the Canadian returns.

Now, for the US return:

My US employment started on January. However, I moved to the US only in April.

The Jan-April US income has been reported to CRA as a part-year resident return.

1) For the US return- am I a part-year tax resident or a full-year resident?

2) i was surprised Turbotax estimates some extra tax amount (not small, actually) that I have to pay on top of what has been already deducted by the employer. Is that common?
The amount didnt change based on full/part-year residency.
nelsona
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Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by nelsona »

What is deducted from your pay has little to do with your final tax.

You will need to choose to either file dual status, or full year in US. Since you need to report all US income for Jan-April, I would suggest dimply filing full year 1040.

When you reported the US income on your Cdn return how did you determine your foreign tax credits, since this can only be established once you complete your US return?

I'll leave you with that. I don'd step-by-step explanations at this time of year.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Leah12345
Posts: 12
Joined: Sat Mar 04, 2023 3:00 pm

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by Leah12345 »

Thank you, Nelsona!

Could you confirm:
even if I filed as part-year resident in canada, can I file as a full-year tax resident of the US? Or does the part-year Canadian tax residency limit me to the dual status in the US?

For the foreign tax credit in Canada i only reported the tax paid in the US, for Jan-April. I did get the federal+provincial foreign tax credits.
nelsona
Posts: 18265
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by nelsona »

How you file in canada and US do not need to match.

I repeat, you can only determine the US tax you paid once you complete your US tax return, You will need to prorate the US tax CALCULTED on your 1040 by the amount of US income you reported in Canada.

You will need to amend your Cdn return. In any event, CRA will ask you to prove your US taxes, so you will need to correct this at some point.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
LucyBuvelot
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Joined: Wed Mar 22, 2023 12:53 am

Re: Canada tax Return as a resident + non-resident (leaving Canada)

Post by LucyBuvelot »

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