Hi,
I moved from Ontario to USA in April 2016 for a different job (USA employer) along with family and moved back to Quebec in mid July 2016 for the Govt job.
(1) I am planning to claim moving expense for ON to USA move. Can I claim that or I will be considered non-resident for the period i stayed in USA as didn't have any primary residential ties. My family moved with me to USA, we do not have house but we kept our car, driving licence, bank account in Canada.
(2) Should I mention dates of my move on T1 General asking "if you became or ceased to be resident of canada" ?
(3) If I am a non-resident for the period I was in USA, do I have to declare my employment income earned in USA (W2 Slip).
Thank you for your help..... Need to know urgently As I have to file by tomorrow.
Ontario to USA (74days) to Quebe within 2016 - residency ?
Moderator: Mark T Serbinski CA CPA
Another Question:-
I was paid lumpsum relocation (ON to USA) amount which was taxed as income in my W2 slip. On Quebec moving expense claim, they would like to know if I was paid moving allowance. If I fill it as allowance without deducting in total foreign income then my return reduces. Should I enter it as an allowance paid without deducting in overall foreign income? or I should enter zero in allowance as it was already taxed.
I was paid lumpsum relocation (ON to USA) amount which was taxed as income in my W2 slip. On Quebec moving expense claim, they would like to know if I was paid moving allowance. If I fill it as allowance without deducting in total foreign income then my return reduces. Should I enter it as an allowance paid without deducting in overall foreign income? or I should enter zero in allowance as it was already taxed.
1. you cannot claim moving expenses for a foreign job. You either moved and became non-resident, or you didn't move (and can't claim moving expenses). You should have a US DL after 3 months in US.
2. Of course. That is your departure date
3. No
Did you move from Ontario or QG. Eitehr way, none of this appears on any CDn return.
2. Of course. That is your departure date
3. No
Did you move from Ontario or QG. Eitehr way, none of this appears on any CDn return.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
To give more insight my move were
Ontario to USA in the end April 2016
USA to Quebec in Mid July 2016
So I am emigrating then immigrating. For tax purpose am I a resident of Canada as I lived more than 183 in Canada and I was in Canada on 31 Dec 2016. So Shouldn't I declare my W2 income.
Would I be considered as factual resident? I did not have primary ties with Canada. But I kept my ON registered car and driving license in USA as I was expecting get job in quebec. What will be best in my interest, try to prove myself as factual resident or non-resident for the period I stayed in USA. I do not receive any benefits from Canada such as child care and I do not have any investment or RRSP. I do have TFSA only.
Ontario to USA in the end April 2016
USA to Quebec in Mid July 2016
So I am emigrating then immigrating. For tax purpose am I a resident of Canada as I lived more than 183 in Canada and I was in Canada on 31 Dec 2016. So Shouldn't I declare my W2 income.
Would I be considered as factual resident? I did not have primary ties with Canada. But I kept my ON registered car and driving license in USA as I was expecting get job in quebec. What will be best in my interest, try to prove myself as factual resident or non-resident for the period I stayed in USA. I do not receive any benefits from Canada such as child care and I do not have any investment or RRSP. I do have TFSA only.
Please correct me if I am wrong.
(1) I became non-resident from April-July 2016 so income earned in the USA should NOT be declared in line 104 but do I have to declare elsewhere? World wide income ?
(2) I became a fresh immigrant again on the same tax year from July 2016 onwards so I should only declare income after that not the W2 income which I earned as non-resident.
Please comment, waiting for your valuable response. Thank you!
(1) I became non-resident from April-July 2016 so income earned in the USA should NOT be declared in line 104 but do I have to declare elsewhere? World wide income ?
(2) I became a fresh immigrant again on the same tax year from July 2016 onwards so I should only declare income after that not the W2 income which I earned as non-resident.
Please comment, waiting for your valuable response. Thank you!
Sorry, that was quite a detail I missed.
You never qualified as a non-resident. six weeks in US doesn't make you sufficiently there to make you US resident, so you remain Cdn resident. That is a first condition.
Cdn rules make you resident of QC because you were there on Dec31. You will report all world income of your Cdn and QC return.
You never qualified as a non-resident. six weeks in US doesn't make you sufficiently there to make you US resident, so you remain Cdn resident. That is a first condition.
Cdn rules make you resident of QC because you were there on Dec31. You will report all world income of your Cdn and QC return.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
With regards to your moving expenses. As Nelsona touched on above, you generally can't claim your moving expenses when leaving the country. However, your situation is very unique because you moved back to Canada within the same year.
The rules state the following:
If you meet all the conditions and requirements, you can claim eligible expenses for a move from Canada if:
• you are a full-time student (including a co-operative student), or a factual or deemed resident of Canada; and
• you moved from the place where you ordinarily resided to live in another place where you ordinarily reside. (You cannot claim moving expenses if you rent an apartment in another country where you are working temporarily and you maintain residential ties in Canada. For example, your spouse and children remain in your home in Canada, because your home in Canada is where we consider you to ordinarily reside.)
These rules are normally only beneficial for students, government employees and armed forces who are considered deemed residents. However, because you brought your family with you, you might have an argument to actually claim these. In hindsight, you were considered a factual resident when you were gone and did not maintain any primary ties to Canada. Now, had you moved back the following year or a later, you would have been an emigrant and for sure could not have claimed these.
What do you think Nelsona?
The rules state the following:
If you meet all the conditions and requirements, you can claim eligible expenses for a move from Canada if:
• you are a full-time student (including a co-operative student), or a factual or deemed resident of Canada; and
• you moved from the place where you ordinarily resided to live in another place where you ordinarily reside. (You cannot claim moving expenses if you rent an apartment in another country where you are working temporarily and you maintain residential ties in Canada. For example, your spouse and children remain in your home in Canada, because your home in Canada is where we consider you to ordinarily reside.)
These rules are normally only beneficial for students, government employees and armed forces who are considered deemed residents. However, because you brought your family with you, you might have an argument to actually claim these. In hindsight, you were considered a factual resident when you were gone and did not maintain any primary ties to Canada. Now, had you moved back the following year or a later, you would have been an emigrant and for sure could not have claimed these.
What do you think Nelsona?
Well, there is no doubt at this point that he is a factual resident, since he never established sufficient time./ties in US to be considered non-resident (neither factual nor deemed). He could claim eligible expenses (he still has to report any reimbursement as income). He can only write off against the income from that particular job. Same for his move to the QC job.
SM, your statement "In hindsight, you were considered a factual resident when you were gone and did not maintain any primary ties to Canada" bears a little elaboration since it appears contradictory. He remains a factual resident really because he never established sufficient ties elsewhere, neither in fact nor by treaty. It was as if he moved to a country which di not have a way to become tax resident and/or failed to meet its requirement. Ordinarily, having no PRIMARY residential ties DOES make you a non-resident. This case would be like someone who decided to sail around the world, or go to a non-treaty country. In such case even the flimsiest of secondary ties, keeps you factually resident.
SM, your statement "In hindsight, you were considered a factual resident when you were gone and did not maintain any primary ties to Canada" bears a little elaboration since it appears contradictory. He remains a factual resident really because he never established sufficient ties elsewhere, neither in fact nor by treaty. It was as if he moved to a country which di not have a way to become tax resident and/or failed to meet its requirement. Ordinarily, having no PRIMARY residential ties DOES make you a non-resident. This case would be like someone who decided to sail around the world, or go to a non-treaty country. In such case even the flimsiest of secondary ties, keeps you factually resident.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
This was poorly worded. By in hindsight, I meant that on the DAY he took his family to the US, started working, presumably started renting in the US (not living in temporary housing) he DID establish ties in the US. Enough ties to be considered a resident of the US IF he stayed there the rest of the year. He did not mention if he kept a home in Canada or was just renting before he left. But at the very least, he could have been considered a deemed non-resident of Canada on THAT DAY as per the treaty tie breaker rules.
HOWEVER, he then got another job back in Canada and returned. My point was, if he did not return, in my opinion he would have been an emigrant on the day he moved to the US with his family for employment purposes, would have needed to file a departure return etc. But he DID RETURN, which changed everything. So he was only a factual resident of Canada in "hindsight" at the end of the year when ALL the facts of the situation were examined.
Now, if he KNEW he was going to return to Canada several months later at the time he moved to the US, I would have argued that he was NOT an emigrant on that day and WAS in fact a factual resident.
Said another way, if this client came to me a month before he planned to move to the US, and he had every reason to believe that there was going to be a degree of permanence to the move (meaning he had no idea another opportunity in Canada would present itself to him a few months later that would require him to move back to Canada) I would have prepared him for a proper departure (crystallize RRSP's, notify institutions, pay back HBP loan, planning around deemed disposal of non-reg investments etc).
I understand that normally not having any primary ties does make you a non-resident. What I was referring to about not maintaining any primary ties to Canada had noting to do with my interpretation of his residency status. I was simply pointing out that by taking his family with him, he appeared to meet CRA's definition to qualify for moving expenses. I should have clarified this better.
HOWEVER, he then got another job back in Canada and returned. My point was, if he did not return, in my opinion he would have been an emigrant on the day he moved to the US with his family for employment purposes, would have needed to file a departure return etc. But he DID RETURN, which changed everything. So he was only a factual resident of Canada in "hindsight" at the end of the year when ALL the facts of the situation were examined.
Now, if he KNEW he was going to return to Canada several months later at the time he moved to the US, I would have argued that he was NOT an emigrant on that day and WAS in fact a factual resident.
Said another way, if this client came to me a month before he planned to move to the US, and he had every reason to believe that there was going to be a degree of permanence to the move (meaning he had no idea another opportunity in Canada would present itself to him a few months later that would require him to move back to Canada) I would have prepared him for a proper departure (crystallize RRSP's, notify institutions, pay back HBP loan, planning around deemed disposal of non-reg investments etc).
I understand that normally not having any primary ties does make you a non-resident. What I was referring to about not maintaining any primary ties to Canada had noting to do with my interpretation of his residency status. I was simply pointing out that by taking his family with him, he appeared to meet CRA's definition to qualify for moving expenses. I should have clarified this better.
A very similar situation happened to me with one of my client's but over two years, not the same calendar year.
A couple moved to the US when the husband got a 3-4 year work contract. They had every intention of staying in the US, so I prepared them for a proper departure. Then the husband's mom was diagnosed with terminal cancer very early the next year, he quit his job and moved back to Canada to take care of her.
So we filed a departure return when they left and had to file an immigration return the next year when they returned. All total they were only gone for 4-5 months.
Had this have been in the same calendar year and not over two years, I guess they would have been in the exact same situation as our poster.
A couple moved to the US when the husband got a 3-4 year work contract. They had every intention of staying in the US, so I prepared them for a proper departure. Then the husband's mom was diagnosed with terminal cancer very early the next year, he quit his job and moved back to Canada to take care of her.
So we filed a departure return when they left and had to file an immigration return the next year when they returned. All total they were only gone for 4-5 months.
Had this have been in the same calendar year and not over two years, I guess they would have been in the exact same situation as our poster.
The treaty ALSO requires that one FIRST meet the US definition of resident, before any of the tie-breakers can be applied. So deemed non-residency could not be met in this case. He did not meet this with only 84 day in US.
The "spread over two tax years" justification, while we do use it, is not really a valid reason to make the claim of US residency. We simply use this rule of thumb because the likelihood of at least meeting some form of SPT in such a case would be greatly increased.
Also, the "intent" portion of residency determination (which btw, was greatly reduced in importance in the early 00's version of IT) would be more difficult to ascertain if one was in fact living and working in the foreign country at year-end.
Thirdly, both Canada and US acknowledge that there is some leniency on establishing residency when one is in the way to meeting SPT (IRS even makes the distinction of stating that when one meets SPT, one must then establish "residency starting date" on a date MUCH earlier. IRS also gives more weight to time spent in US the last part of the year for making this case for "anticipated SPT" . But to come and go within the year would not satisfy any of these.
And, as you point out, there is no real mechanism in Canada to be an emigrant and then a returnee in the same tax year, so CRA would deny any claim to such. the would accept the other way: came and then left.
The "spread over two tax years" justification, while we do use it, is not really a valid reason to make the claim of US residency. We simply use this rule of thumb because the likelihood of at least meeting some form of SPT in such a case would be greatly increased.
Also, the "intent" portion of residency determination (which btw, was greatly reduced in importance in the early 00's version of IT) would be more difficult to ascertain if one was in fact living and working in the foreign country at year-end.
Thirdly, both Canada and US acknowledge that there is some leniency on establishing residency when one is in the way to meeting SPT (IRS even makes the distinction of stating that when one meets SPT, one must then establish "residency starting date" on a date MUCH earlier. IRS also gives more weight to time spent in US the last part of the year for making this case for "anticipated SPT" . But to come and go within the year would not satisfy any of these.
And, as you point out, there is no real mechanism in Canada to be an emigrant and then a returnee in the same tax year, so CRA would deny any claim to such. the would accept the other way: came and then left.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Either you did not read my post carefully or you are missing my point. The poster in question left in April. I said he could only be considered a resident of the US IF he stayed in the US for the rest of the year, and he did not. So, I’m in agreement with you, he was never considered a US resident, but was a factual resident of Canada.
I realize the treaty tie-breaker rules can’t be applied unless he’s also a resident of the US. IF he stayed in the US for the rest of the year after his arrival in April, he would have met the SPT that year. So, IF he had a house back in Canada he would be considered a resident of both Canada AND the US at the same time and the treaty tie breaker rules WOULD have to be applied (this is why I said “He did not mention if he kept a home in Canada or was just renting before he leftâ€). I assumed this would be understood by this comment.
If he did have a house back in Canada, he would tie the first test and move on to the second test (economic interests). Because he brought his family with him and works there, he no longer has any primary ties to Canada and would almost certainly be considered a deemed non-resident of Canada.
If he did NOT have a home back in Canada, then he would simply be an emigrant. Would you not agree that this is how this scenario would have played out IF he stayed in the US the rest of the year?
I realize the treaty tie-breaker rules can’t be applied unless he’s also a resident of the US. IF he stayed in the US for the rest of the year after his arrival in April, he would have met the SPT that year. So, IF he had a house back in Canada he would be considered a resident of both Canada AND the US at the same time and the treaty tie breaker rules WOULD have to be applied (this is why I said “He did not mention if he kept a home in Canada or was just renting before he leftâ€). I assumed this would be understood by this comment.
If he did have a house back in Canada, he would tie the first test and move on to the second test (economic interests). Because he brought his family with him and works there, he no longer has any primary ties to Canada and would almost certainly be considered a deemed non-resident of Canada.
If he did NOT have a home back in Canada, then he would simply be an emigrant. Would you not agree that this is how this scenario would have played out IF he stayed in the US the rest of the year?