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| Subject: Canada Tax Filing question |
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Hi, I became resident of Canada in the year 2007, but only lived in Canada for seven days in the year 2007. I have now moved to Canada permanently on Dec 1, 2009. I have no income in Canada for the year 2009 yet. All my income for 2009 is in the US. I will have to file the US tax return just like I did in the past. My question is do I need to file Canada Tax return as well? I looked at the Canada Revenue website but could not find any clear answers. Any advice is appreciated.
-Thanks,
Amit
[02-12-2009,09:07]
[**.233.201.63]
Amit |
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(in reply to: Canada Tax Filing question)
don´t you wish you waited till about Dec 20 outside Canada? Yes you have to file here; however, you will get tax credit for paying the US taxes. And you have no cash mad ehere so don´t worry
[02-12-2009,11:22]
[***.202.38.241]
costs |
(in reply to: Canada Tax Filing question)
Thanks costs. If anyone else can shed more light, will appreciate it.
[03-12-2009,00:26]
[**.233.201.63]
Amit |
(in reply to: Canada Tax Filing question)
Where was your official permanent residence in 2009? This will help answer most of your questions and concerns.
If you were residing in the U.S. when you earned your U.S. income, and you later resided in Canada with no Canadian income, then you need only file U.S. taxes. This is because you don´t need to file Canadian taxes if you have no residential ties to Canada (even as a Canada PR).
If you earned U.S. income while you had residential ties to Canada in 2009, and if on that income you would normally owe Canadian taxes, you should file a Canadian tax return, in addition to a U.S. tax return. However, your Canadian return will allow you to exclude taxes you may owe if you already paid taxes on that income (as done in your U.S. return). This is provided for in the Canadian tax forms or in tax software you may purchase.
Lastly, according to Canada Revenue, you normally need to file a Canadian tax return only if you owe Canadian taxes on any worldwide income.
You should go to the Revenue Canada website and review your situation:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/flng-blgtns/menu-eng.html
Others may want to add to or update this information.
[03-12-2009,19:48]
[**.192.28.31]
Richard |
(in reply to: Canada Tax Filing question)
Hey Richard, thanks for your respone. I remember you from couple of years back on this forum. I hope that Canada is treating you well. I am loving Toronto so far.
You made a valid point about ´Where was your official permanent residence in 2009? ´ see I don´t know. I was employed in US until Nov 15, and moved to Canada on Dec 1. Got my SIN etc, and opened bank accounts. I don´t think I will have an income earned thru end of the year in Canada.
I looked at the link you posted. As per that link, I should file if I have residential ties to Canada which inlude opening bank accout etc. But later it say under ´who should file´ if you owe taxes, I don´t owe taxes.So I pass the first test but fail the secound. Thoughts?
[03-12-2009,23:19]
[**.233.201.63]
Amit |
(in reply to: Canada Tax Filing question)
Hi there Amit, yes I remember chatting with you back then too. I hope you´re doing well, as it sounds like you made a good transition to Canada.
Below are the rules in deciding if you had residential ties to Canada while you earned U.S. income. These rules I think are meant to be viewed as a combination of factors, not necessarily any single factor, in helping to decide if there were residential ties to Canada. Did you these categories?
If no, then obviously you don´t need to file a Canadian return, and simply file a U.S. return on that U.S. income.
If yes, then I would file a Canadian return, even if you don´t owe taxes, for a few reasons. First, it formally confirms with Canada Revenue that you do not have a tax liability. Second, filing a return each year helps verify your residency for any future citizenship application or PR renewal. Lastly, you may be eligible for a GST tax credit if you file, even if you own no taxes, depending on your income - money returned just for filing.
And remember, if you do file, you don´t pay taxes twice on the same income due to tax treaties between the two countries. The tax forms will provide instructions on what to fill out to prevent that.
Canada Revenue residency rules:
The residential ties you have or establish in Canada are a major factor in determining residency. Residential ties to Canada include:
* a home in Canada;
* a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants who stay in Canada, while you are living abroad;
* personal property in Canada, such as a car or furniture;
* social ties in Canada;
* economic ties in Canada.
Other ties that may be relevant include:
* a Canadian driver´s licence;
* Canadian bank accounts or credit cards;
* health insurance with a Canadian province or territory.
Residential ties that you maintain or establish in another country may also be relevant to residency.
Special rules may apply in the following circumstances:
* If you do not have residential ties in Canada, you may be a deemed resident if you stayed in Canada for 183 days or more.
* You are a government employee outside Canada, or you are a member of the Canadian Forces serving outside of Canada.
[04-12-2009,11:26]
[**.192.28.31]
Richard |
(in reply to: Canada Tax Filing question)
4th sentence should read: "Did you fit any of these categories?"
[04-12-2009,11:29]
[**.192.28.31]
Richard |
(in reply to: Canada Tax Filing question)
Hi Richard, thanks again for the detailed explanation.
Well,reading thru it I think I can avoid filing tax return in canada becuase I did not have any candadian income ( I only opened bank accounts), and I plan to apply for health card in Jan. The only residential tie seems like opening a bank account.Also, I am in a middle of divorce and don´t want to compliate the tax filig process.
But, do you think it will be a factor on renewing the PR card, I am on the border line with 2 months buffer to meet the 2-5 year rule? Please comment. Also, if say for instance, I don´t file canada tax return, but in the eyes of Revennue Canada I should have. What worse can happen?
Thanks,
[04-12-2009,23:34]
[**.233.201.63]
Amit |
(in reply to: Canada Tax Filing question)
Amir- No, I don´t think it´s a problem to not file a tax return and later apply for PR renewal. As long as you can show residency in other ways such as bank activities, utility bills, sales receipts, etc, if asked. Filing taxes is not a requirement to keep PR, it´s just something extra that helps show residency.
If you didn´t file taxes but should have, much depends on intention. If you thought you didn´t need to file and can explain that adequately, it probably would be a matter of paying what´s owed with any interest. But it sounds to me that´s not likely the case with you, and I wouldn´t worry about it.
Others may want to comment if any additional thoughts. In the meantime, all the best.
[05-12-2009,11:27]
[**.192.28.31]
Richard |
(in reply to: Canada Tax Filing question)
Sorry, I meant Amit. By the way, if you´re on the border for the 2/5 year rule, then take up residency as soon as possible (obviously) and with items such as rental agreement, banking activity, etc as mentioned for documentation, you should be ok.
[05-12-2009,11:42]
[**.192.28.31]
Richard |
(in reply to: Canada Tax Filing question)
Hi Richard, thanks again for your responses, they are always very helpful.
Yes, I think I should be ok,because the intention is not to pay tax,but to not file a return because I don´t owe any taxes to the canadian goverment.
Yes, I have opened two bank accounts, I use by debit card, wherever possible.Got my liabrary card, got my SIN card.
Yet to apply for the Health card.
I have not signed a lease,but live with a roomate and give him check for rent.
I am still using my US phone, do you think it makes sense to get canadian cell phone?
Also I have not replied for the health card yet, plan to do it in Jan. When will I get it, I know there is a 90 day rule, but I have been in Canada in 2007 for couple of days, will they count days from then or from Dec 2009?
Also, I am surprized that no one else is commenting on this thread. Thanks again Richard. Also do you mind sharing your email?
[06-12-2009,13:47]
[**.233.201.63]
Amit |
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