Declaring Non-Resident with RRSP withdrawn already
Moderator: Mark T Serbinski CA CPA
Declaring Non-Resident with RRSP withdrawn already
Jan 2013 House Sold
Feb 2013 Left Canada with family to US. GST, Child/Univ Benfit stopped
March 2013 House closing / CRA informed by lawyer as house sold by someone moved abroad. Part of proceedings were with held by CRA for couple of months.
April 2013 RRSP withdrawn as non-resident - 25% with holding tax paid.
Jan 2014 - Spouse became Canadian Citizen, went back to Canada for couple of days and took oath. The obligation for 4 years residency was already filed in Oct 2012 when citizenship was applied.
US Tax filed as normal here.
How should I file departure tax in Canada?
Another question is, since I am the only one who earns in the family, does it matter that my spouse was Permanent Resident and not citizen last year. Should I file non-resident from this year after she became citizen? Or it doesn't matter since I am the one who is becoming non-resident and immigration status of my entire family should not affect the fact that I left the country to live in US permanently. Immigration had no problem, why would CRA have problem?
Feb 2013 Left Canada with family to US. GST, Child/Univ Benfit stopped
March 2013 House closing / CRA informed by lawyer as house sold by someone moved abroad. Part of proceedings were with held by CRA for couple of months.
April 2013 RRSP withdrawn as non-resident - 25% with holding tax paid.
Jan 2014 - Spouse became Canadian Citizen, went back to Canada for couple of days and took oath. The obligation for 4 years residency was already filed in Oct 2012 when citizenship was applied.
US Tax filed as normal here.
How should I file departure tax in Canada?
Another question is, since I am the only one who earns in the family, does it matter that my spouse was Permanent Resident and not citizen last year. Should I file non-resident from this year after she became citizen? Or it doesn't matter since I am the one who is becoming non-resident and immigration status of my entire family should not affect the fact that I left the country to live in US permanently. Immigration had no problem, why would CRA have problem?
Read the Emigrants guide from CRA on how to specifically file your 2013 departure taxes.
RRSP was handled correctly for Canada if 25% withheld. You will need to report some income from 2013 for your RRSP in 1040, using form 8891.
You seem to have done everything correctly, but you want to file correctly to get any house withholding back and pay your departure taxes. Youshould not have been treated as a non-resisdent since you sold as resident, but it doesn't matter, you owe no taxon sale, in either country.
No need for spouse to file any way other than emigrant, like you.
For US, by regular, UI assume married joint, reporting all world income for entire year.
RRSP was handled correctly for Canada if 25% withheld. You will need to report some income from 2013 for your RRSP in 1040, using form 8891.
You seem to have done everything correctly, but you want to file correctly to get any house withholding back and pay your departure taxes. Youshould not have been treated as a non-resisdent since you sold as resident, but it doesn't matter, you owe no taxon sale, in either country.
No need for spouse to file any way other than emigrant, like you.
For US, by regular, UI assume married joint, reporting all world income for entire year.
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So should I avoid filing NR73 form?
This is what the emigrant guide says:
When do you become a non-resident?
When you leave Canada to settle in another country, you
usually become a non-resident for income tax purposes
on the latest of the following dates:
â– the date you leave Canada;
â– the date your spouse or common-law partner and
dependants leave Canada; or
â– the date you become a resident of the country to which
you are immigrating.
If you lived in another country before living in Canada and
you are leaving Canada to re-establish a residence in the
other country, you usually become a non-resident on the
date you leave Canada. This applies even if your spouse or
common-law partner temporarily stays in Canada to
dispose of your home.
Note
Generally, you become a deemed non-resident at a time
when your residential ties in the other country are such
that, under the tax treaty between Canada and that
country, you are considered to be a resident of that
country and not of Canada.
---
I think the treaty between US and Canada made me non-resident of Canada the day me and my family left Canada. Regardless of my wife's status last year, since immigration didn't have problem a PR leaving Canada after completing 4 years residency. There is nowhere they ask for status other than NR73 form.
If I read correctly, are you advising that I file for my wife's tax return as well and that too as emigrant? Or can I just file tax for myself and add her in the same?
---
hen you receive certain types of income from Canada
after you emigrate, the Canadian payer has to
withhold non-resident tax on the income and send it to us.
This tax withheld is usually your final tax obligation
to Canada on the income.
However, under section 217 of the Income Tax Act, you can
elect to file a Canadian return to report the types of
Canadian source income listed in the next section. If this
election is beneficial, your final tax obligation to Canada on
this income will be calculated using the information
provided in this tax return and, as a result, you might
receive a refund of some or all of the non-resident tax
withheld on this income.
You will benefit from electing to file a return under
section 217 if the total tax payable on line 435 of your return
is less than the tax you would otherwise pay if you did not
make this election. If the election is not beneficial, we will
process your return without considering your election
under section 217.
---
I believe this is the option I should chose when filing to report my RRSP withdrawal. The house withholding is already released last summer and I got the full amount.
There has been many instances last year when CRA was or would have been informed of my leaving.
1) We informed CRA before leaving to stop Child and Universal Benefits payments. 2) We signed doc by house closing lawyer to inform and get clearance from CRA and with holding tax for non-resident. 3) RRSP withdrawal as non-Resident, 25% must have been sent to CRA already by the financial institution.
This is what the emigrant guide says:
When do you become a non-resident?
When you leave Canada to settle in another country, you
usually become a non-resident for income tax purposes
on the latest of the following dates:
â– the date you leave Canada;
â– the date your spouse or common-law partner and
dependants leave Canada; or
â– the date you become a resident of the country to which
you are immigrating.
If you lived in another country before living in Canada and
you are leaving Canada to re-establish a residence in the
other country, you usually become a non-resident on the
date you leave Canada. This applies even if your spouse or
common-law partner temporarily stays in Canada to
dispose of your home.
Note
Generally, you become a deemed non-resident at a time
when your residential ties in the other country are such
that, under the tax treaty between Canada and that
country, you are considered to be a resident of that
country and not of Canada.
---
I think the treaty between US and Canada made me non-resident of Canada the day me and my family left Canada. Regardless of my wife's status last year, since immigration didn't have problem a PR leaving Canada after completing 4 years residency. There is nowhere they ask for status other than NR73 form.
If I read correctly, are you advising that I file for my wife's tax return as well and that too as emigrant? Or can I just file tax for myself and add her in the same?
---
hen you receive certain types of income from Canada
after you emigrate, the Canadian payer has to
withhold non-resident tax on the income and send it to us.
This tax withheld is usually your final tax obligation
to Canada on the income.
However, under section 217 of the Income Tax Act, you can
elect to file a Canadian return to report the types of
Canadian source income listed in the next section. If this
election is beneficial, your final tax obligation to Canada on
this income will be calculated using the information
provided in this tax return and, as a result, you might
receive a refund of some or all of the non-resident tax
withheld on this income.
You will benefit from electing to file a return under
section 217 if the total tax payable on line 435 of your return
is less than the tax you would otherwise pay if you did not
make this election. If the election is not beneficial, we will
process your return without considering your election
under section 217.
---
I believe this is the option I should chose when filing to report my RRSP withdrawal. The house withholding is already released last summer and I got the full amount.
There has been many instances last year when CRA was or would have been informed of my leaving.
1) We informed CRA before leaving to stop Child and Universal Benefits payments. 2) We signed doc by house closing lawyer to inform and get clearance from CRA and with holding tax for non-resident. 3) RRSP withdrawal as non-Resident, 25% must have been sent to CRA already by the financial institution.
Please don't quote me CRA documents. I'm very familiar with them.
I've given you how you should file.
If you are working in US, you will not benefit from 217, so don't waste your time with that.
I've given you how you should file.
If you are working in US, you will not benefit from 217, so don't waste your time with that.
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Thanks. I didn't mean to post that info for your read, but was confirming.
So my only question is, should I avoid filing NR73 in my case? And file the taxes as usual? I couldn't find which form to use for departure tax for emigrant and if I can use eFile/software.
I am willing to pay someone who can help me with this. Any reference would be great. I already have US piece done.
So my only question is, should I avoid filing NR73 in my case? And file the taxes as usual? I couldn't find which form to use for departure tax for emigrant and if I can use eFile/software.
I am willing to pay someone who can help me with this. Any reference would be great. I already have US piece done.
I missed the deadline. I tried submitting using Turbo Tax but it said, you can't Netfile since you are non-resident. I don't know should I have selected Ontario as my resident instead of non-resident that I chose?
I changed my address on CRA website.
Also in the provincial taxes area, it asked me about World Income. Do I have to disclose the amount I earned in US after moving here?
I changed my address on CRA website.
Also in the provincial taxes area, it asked me about World Income. Do I have to disclose the amount I earned in US after moving here?
You are not doing it correctly.
You will not be able to netfile, that is a given, and should not worry you. It's not a deadline issue, its because you are no longer resident.
When you inform the software thay you are EMIGRANT (this is at the "controls" stage of the program), and provide a departure date, then they will ask you what your last province of residence is, rather than your province of residence on dec 31.
You provide world income up until the date you leave.
You would only provide world income from after you leave on a special form that gets generated if you were to use election 217, which I've already told you NOT to bother with.
You will not be able to netfile, that is a given, and should not worry you. It's not a deadline issue, its because you are no longer resident.
When you inform the software thay you are EMIGRANT (this is at the "controls" stage of the program), and provide a departure date, then they will ask you what your last province of residence is, rather than your province of residence on dec 31.
You provide world income up until the date you leave.
You would only provide world income from after you leave on a special form that gets generated if you were to use election 217, which I've already told you NOT to bother with.
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Thanks for clarification. This is what I have on return. I think I should select Ontario instead of Other.
Enter your province or territory of
residence on December 31, 2013: Other
Your country of residence
on December 31, 2013: Non-Resident
Tick the box that describes your residency status as of December 31, 2013 (see page 6 of the guide):
I was a non-resident of Canada. . . . . . . . . . . . . . . . . . 177 Yes [/img]
Enter your province or territory of
residence on December 31, 2013: Other
Your country of residence
on December 31, 2013: Non-Resident
Tick the box that describes your residency status as of December 31, 2013 (see page 6 of the guide):
I was a non-resident of Canada. . . . . . . . . . . . . . . . . . 177 Yes [/img]
Then does it ask you your date of departure? If not, then you might have to choose another option for the last question. Typically one is not considered non-resident until the next FULL year (and a different return is used). in the transition year, one is instead considered an DEPARTING resident, or EMIGRANT.
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"It did ask me the departure date and did say why I can't submit Netfile since I am non-resident.'
Then there is no problem. you will be filing an Ontario return, as I've said several times now.
This seems to be too much for you .
Then there is no problem. you will be filing an Ontario return, as I've said several times now.
This seems to be too much for you .
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