Non-Resident Federal Surtax

[batman2002]

Hi,

I am a Canadian non-resident working in the US, I moved to the US in 2022 and filed all my departure taxes for 2022. In 2023, I received a T4 due to my previous employer going IPO and they reported my vested RSUs in the T4. The employer is based in Ontario with an established business. I filed a non-resident tax return assuming I would be taxed by the CRA for federal + provincial (ON) taxes. However, in the CRA's notice of assessment, they actually taxed me for federal + 48% federal tax. As a result, I received about 1k less in tax refunds. Their reasoning is that I was a non-resident for the whole year of 2023, but the CRA website states the surtax is only taxed for businesses with no establishment in Canada. Could someone clarify for me and suggest if I should file a formal dispute with the CRA?

Thanks

[nelsona]

Is the amount less than $10K CAD? If so you can exclude it from your income by treaty.

Was this the only Cdn source of income (other than interest, etc which is not reportable by non-residents)? If so, you probably should have filed a return for the province of Ontario along with T2203.

As explained in the non-resident guide:

Which income tax package should you use?

The type of Canadian income you receive during the tax year determines which income tax package you should use.

If you receive only income from employment or business use the income tax package for the province or territory where you earn the income along with Guide T4058, Non-Residents and Income Tax. However, if you also receive other types of income (capital gains and/or taxable scholarships, fellowships, bursaries, or research grants), you will also need Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions.

Did you use T2203?