NR 73

[MandE 0]

Thanks Trailmix!! Ok, now what if I recieved EI benefits for the first few months of 2008 while I lived in the US, what happens there?

Also, my accountant advised me to state that I moved to the US on Jan. 1st, 2008, to keep everything clean for "tax purposes". If I do this, how does that affect refunds and such? And can I still complete that form as a correction if the return was for 2007, but I say I ceased to become a resident as of the first of 2008?

Is your head spinning yet?

[trailmix 77]

Thanks Trailmix!! Ok, now what if I recieved EI benefits for the first few months of 2008 while I lived in the US, what happens there?

Also, my accountant advised me to state that I moved to the US on Jan. 1st, 2008, to keep everything clean for "tax purposes". If I do this, how does that affect refunds and such? And can I still complete that form as a correction if the return was for 2007, but I say I ceased to become a resident as of the first of 2008?

Is your head spinning yet?

As for your accountant's advice, he is basically asking you to lie on your tax return - which is a bit odd. It would be nice to keep things 'clean' on all tax returns because then no one would ever have to do the math

I assume he uses some software though - anyway, I digress.

If you chose to claim your first date of non-residency as January 1st, 2008, then you do not need to do anything about the 2007 return.

So you will not need to fill in an adjustment form, because I am assuming you haven't done your 2008 taxes yet? If you decide to follow his advice you will just fill in Jan 1st as your departure date from Canada and that's that.

As for the EI benefits, you probably should have told them that you were going to be moving. The tax withholding for EI when you are a non-resident is higher than it is for a resident. I really have no idea what the rules are if you move out of the country, while collecting EI and don't notify them and then it appears on your tax return that you were a non-resident basically the whole year.

I assume once they see this - which they will when you file your 2008 return with your EI earnings - they may, at least, want more tax from you - but I am not sure.

Maybe someone here has some experience with that and will chime in.

Edited January 7, 2009 by trailmix

[MandE 0]

hmmm... now I'm really confused. When I collected EI, it was based on the fact that I was living in the US on a K1 Visa, like I've seen many other posters on here do. There was nothing secretive about that when I applied for EI... the benefits people were aware I had moved to the states, so I should think they would have taken out more taxes based on that already.

Oh... maybe I just need to call CRA... good times

[S & J 0]

Interesting. My financial advisor.... who is licensed in both Canada and the US and has multiple Can/Am clients... has never asked me to fill out an NR 73..... just had me sign my tax returns and gave me investment documents to give to our US accountant to place on file with our US tax return.

Not sure if this applies to anyone, but in Alberta to unlock RRSPs or LIRA's etc with your bank, you will need to complete an NR73 and have the CRA confirm that you are a non-resident. Just wanted to give a reason why some people would complete it without the request from the CRA.

[trailmix 77]

hmmm... now I'm really confused. When I collected EI, it was based on the fact that I was living in the US on a K1 Visa, like I've seen many other posters on here do. There was nothing secretive about that when I applied for EI... the benefits people were aware I had moved to the states, so I should think they would have taken out more taxes based on that already.

Oh... maybe I just need to call CRA... good times

Ohhh ok, sorry about that, I didn't realize you applied with regard to the K1 and moving - so disregard that comment

[zyggy 9]

hmmm... now I'm really confused. When I collected EI, it was based on the fact that I was living in the US on a K1 Visa, like I've seen many other posters on here do. There was nothing secretive about that when I applied for EI... the benefits people were aware I had moved to the states, so I should think they would have taken out more taxes based on that already.

Oh... maybe I just need to call CRA... good times

If you filed EI as a non-resident, then you don't have to worry about taxes. HSDRC is taking out the non-resident tax for you.

I would do what trailmix said, file an amended T1 with the international tax services office with a leaving Canada date of 12/31.

Or you can file a leaving Canada return for 2008 with the International Tax Services Office with a leaving Canada date of January 1 with no income. If you received GST rebates, you will be expected to pay it back for the whole year. Do not pay it back until CRA sends you an invoice.

[♥Stiggy♥ 0]

Ok, sorry to jump in here, but if you are recieving CTB and UCCB, isnt it a good idea to mail in the NR73??

Or continue to keep having the payments come for the rest of the year, and stash it in savings until they ask for it back?

I was researching this yesterday for after I enter with a K1... at what point I lose the CT amounts and the UCCB, and from what I read, you lose it the day you receive a greencard, since you are not a resident of the US yet

[MandE 0]

Genius, Zyggy!!

Edited January 7, 2009 by MandE

[trailmix 77]

Ok, sorry to jump in here, but if you are recieving CTB and UCCB, isnt it a good idea to mail in the NR73??

Or continue to keep having the payments come for the rest of the year, and stash it in savings until they ask for it back?

I was researching this yesterday for after I enter with a K1... at what point I lose the CT amounts and the UCCB, and from what I read, you lose it the day you receive a greencard, since you are not a resident of the US yet

Those payments are based on your tax return.

If you state on your tax return that you ceased to be a resident on such and such a date you won't receive them following that.

As for current, say you have a GST cheque coming to you in October but you left the country in September, you need to call them in September and say - I am leaving the country on September 15th, don't send me any more money.

I don't think there is any Canadian tax law that says in black and white that if you meet this one criteria (for instance getting your green card) you are no longer a resident of Canada.

Residential Ties Elsewhere

The Courts have indicated that an individual must be resident somewhere, but they can also have more than one residence at the same time. Therefore, the fact that the individual is considered a resident of some other country does not preclude a finding that he or she is still resident in Canada.

From this article - which I think is very well written.

Canadian Tax Considerations for Canadians Moving Permanently to the United States

Determination of Residence for Canadian Income Tax Purposes

The term resident is not defined in the Canadian Income Tax Act so we need to refer to case law. Canadian Tax Courts (the "Courts") have held that an individual is resident in Canada for tax purposes if Canada is the place where he, in his settled routine of his life regularly, normally or customarily lives. Canada Customs and Revenue Agency ("CCRA"), formerly Revenue Canada, has indicated that the determination of an individual's residence status is a question of fact and is based on a number of factors that have been set out by the Courts. These factors are discussed below:

Permanence and Purpose

CCRA considers the degree of permanence. For example, if the individual has been absent for less than 2 years, it is presumed that he or she has retained Canadian residence unless all ties to Canada have been severed. If the emigrating individual's return to Canada is foreseen before his or her departure, CCRA will conclude that the individual never ceased to be a resident of Canada.

Residential Ties to Canada

Residential ties to Canada may include the following:

A home which may be kept vacant or leased to a non-arm's length person or for a short term period;

Spouse and dependants who may stay behind unless separated;

Personal property such as furniture, clothing, automobile, driver's license, bank accounts, credit cards, debit cards, etc.;

Provincial medical coverage, cottage, professional memberships, child care benefit payments and GST payments; and

Social memberships in clubs, charities & volunteer organizations.

Residential Ties Elsewhere

The Courts have indicated that an individual must be resident somewhere, but they can also have more than one residence at the same time. Therefore, the fact that the individual is considered a resident of some other country does not preclude a finding that he or she is still resident in Canada.

Regularity and Length of Visits to Canada

An individual can make the occasional return visits for business or personal reasons but if visits are on a regular basis then this may indicate that the individual continues to be a resident of Canada.

If the individual leaves Canada for two years or less, CCRA’s administrative policy is that the individual is presumed to have retained their Canadian residence during their absence, unless he or she can establish that the return to Canada was unforeseen at the time of departure. Any evidence of intent to return to Canada within two years of departure, will cause CCRA to conclude that the individual was a continuing resident of Canada, for tax purposes, during the two years that he or she was absent. This two-year rule is only an administrative policy of the CCRA and has no basis in law.

CCRA has centralized the determination of residence in its International Tax Services Office in Ottawa, and has established procedures to allow the determination of non-residence in advance of an emigrant’s departure. An emigrant is not required to obtain this prior determination, but it may be advantageous if he or she requires residence status to be clarified prior to departure. Form NR73 should be completed to request a determination of residence status.

Some of the steps that an emigrant should take in order to be considered a non-resident of Canada are:

Close all Canadian bank accounts if possible or inform the banks of the change in residence.

Inform Canadian remitters of income, such as mutual funds and securities brokers, of their non-residence status to ensure that they withhold tax on payments of certain types of income. Canadian Registered Retirement Savings Plan ("RRSP") and Canadian Registered Retirement Income Fund ("RRIF") accounts are included.

Advise social clubs and professional associations of the change in their status from a resident member to a non-resident member or have them discontinue the memberships if they don't allow non-resident members.

Ensure that a residence is not available in Canada for personal use during the period of non-residence by either selling or leasing his or her home.

Cancel provincial health care coverage.

Termination of Canadian Residence

Date of Departure

The date of departure is generally considered to have occurred on the latest of:

The date the individual leaves Canada;

The date the individual’s spouse and/or dependants leave Canada; or

The date the individual becomes a resident of a country to which he or she is immigrating.

Dual Residence

An individual can be a dual resident if he or she creates residential ties in the United States but does not sever all ties in Canada. In such a situation an individual could be subject to double taxation. Relief from this situation is provided by the Canada–U.S. Income Tax Convention. This Convention for the most part will provide a determinacy of residence between Canada and the United States that will override domestic tax law. When an individual is considered a resident of both countries by virtue of domestic law, an individual's residence status is determined by considering which country to which the individual has a closer connection. This is determined by considering the following factors in the following order:

Whether the individual maintains a permanent home in the country;

Whether the country is closer in relation to the individual's personal and economic relations;

Whether the country is the individual's habitual abode; and

Whether the individual has citizenship in the country.

Canadian Income Tax Implications of Ceasing to be a Canadian Resident

Reporting Obligations

Canada's taxation system is based on residence. Residents of Canada are subject to taxation on their worldwide income while non-residents are only subject to taxation on certain types of Canadian source income. When an individual ceases to be a resident, the provisions of the Canadian Income Tax Act attempts to tax the individual on all his or her income earned up to the date that residence terminates (date of departure), especially the income that will not be taxable once the individual becomes a non-resident. This tax is referred to as the "departure tax".

[trailmix 77]

If you filed EI as a non-resident, then you don't have to worry about taxes. HSDRC is taking out the non-resident tax for you.

I would do what trailmix said, file an amended T1 with the international tax services office with a leaving Canada date of 12/31.

Or you can file a leaving Canada return for 2008 with the International Tax Services Office with a leaving Canada date of January 1 with no income. If you received GST rebates, you will be expected to pay it back for the whole year. Do not pay it back until CRA sends you an invoice.

Genius, Zyggy!!

Hold yer horsies!

I didn't actually suggest that. The OP left Canada on December 4th, my suggestion was (if she wanted to do it correctly) that she should fill out an amendment for the T1 with a departure date of December 4th.

[♥Stiggy♥ 0]

Ok, sorry to jump in here, but if you are recieving CTB and UCCB, isnt it a good idea to mail in the NR73??

Or continue to keep having the payments come for the rest of the year, and stash it in savings until they ask for it back?

I was researching this yesterday for after I enter with a K1... at what point I lose the CT amounts and the UCCB, and from what I read, you lose it the day you receive a greencard, since you are not a resident of the US yet

Those payments are based on your tax return.

If you state on your tax return that you ceased to be a resident on such and such a date you won't receive them following that.

As for current, say you have a GST cheque coming to you in October but you left the country in September, you need to call them in September and say - I am leaving the country on September 15th, don't send me any more money.

I don't think there is any Canadian tax law that says in black and white that if you meet this one criteria (for instance getting your green card) you are no longer a resident of Canada.

Residential Ties Elsewhere

The Courts have indicated that an individual must be resident somewhere, but they can also have more than one residence at the same time. Therefore, the fact that the individual is considered a resident of some other country does not preclude a finding that he or she is still resident in Canada.

From this article - which I think is very well written.

Canadian Tax Considerations for Canadians Moving Permanently to the United States

Determination of Residence for Canadian Income Tax Purposes

The term resident is not defined in the Canadian Income Tax Act so we need to refer to case law. Canadian Tax Courts (the "Courts") have held that an individual is resident in Canada for tax purposes if Canada is the place where he, in his settled routine of his life regularly, normally or customarily lives. Canada Customs and Revenue Agency ("CCRA"), formerly Revenue Canada, has indicated that the determination of an individual's residence status is a question of fact and is based on a number of factors that have been set out by the Courts. These factors are discussed below:

Permanence and Purpose

CCRA considers the degree of permanence. For example, if the individual has been absent for less than 2 years, it is presumed that he or she has retained Canadian residence unless all ties to Canada have been severed. If the emigrating individual's return to Canada is foreseen before his or her departure, CCRA will conclude that the individual never ceased to be a resident of Canada.

Residential Ties to Canada

Residential ties to Canada may include the following:

A home which may be kept vacant or leased to a non-arm's length person or for a short term period;

Spouse and dependants who may stay behind unless separated;

Personal property such as furniture, clothing, automobile, driver's license, bank accounts, credit cards, debit cards, etc.;

Provincial medical coverage, cottage, professional memberships, child care benefit payments and GST payments; and

Social memberships in clubs, charities & volunteer organizations.

Residential Ties Elsewhere

The Courts have indicated that an individual must be resident somewhere, but they can also have more than one residence at the same time. Therefore, the fact that the individual is considered a resident of some other country does not preclude a finding that he or she is still resident in Canada.

Regularity and Length of Visits to Canada

An individual can make the occasional return visits for business or personal reasons but if visits are on a regular basis then this may indicate that the individual continues to be a resident of Canada.

If the individual leaves Canada for two years or less, CCRA’s administrative policy is that the individual is presumed to have retained their Canadian residence during their absence, unless he or she can establish that the return to Canada was unforeseen at the time of departure. Any evidence of intent to return to Canada within two years of departure, will cause CCRA to conclude that the individual was a continuing resident of Canada, for tax purposes, during the two years that he or she was absent. This two-year rule is only an administrative policy of the CCRA and has no basis in law.

CCRA has centralized the determination of residence in its International Tax Services Office in Ottawa, and has established procedures to allow the determination of non-residence in advance of an emigrant’s departure. An emigrant is not required to obtain this prior determination, but it may be advantageous if he or she requires residence status to be clarified prior to departure. Form NR73 should be completed to request a determination of residence status.

Some of the steps that an emigrant should take in order to be considered a non-resident of Canada are:

Close all Canadian bank accounts if possible or inform the banks of the change in residence.

Inform Canadian remitters of income, such as mutual funds and securities brokers, of their non-residence status to ensure that they withhold tax on payments of certain types of income. Canadian Registered Retirement Savings Plan ("RRSP") and Canadian Registered Retirement Income Fund ("RRIF") accounts are included.

Advise social clubs and professional associations of the change in their status from a resident member to a non-resident member or have them discontinue the memberships if they don't allow non-resident members.

Ensure that a residence is not available in Canada for personal use during the period of non-residence by either selling or leasing his or her home.

Cancel provincial health care coverage.

Termination of Canadian Residence

Date of Departure

The date of departure is generally considered to have occurred on the latest of:

The date the individual leaves Canada;

The date the individual’s spouse and/or dependants leave Canada; or

The date the individual becomes a resident of a country to which he or she is immigrating.

Dual Residence

An individual can be a dual resident if he or she creates residential ties in the United States but does not sever all ties in Canada. In such a situation an individual could be subject to double taxation. Relief from this situation is provided by the Canada–U.S. Income Tax Convention. This Convention for the most part will provide a determinacy of residence between Canada and the United States that will override domestic tax law. When an individual is considered a resident of both countries by virtue of domestic law, an individual's residence status is determined by considering which country to which the individual has a closer connection. This is determined by considering the following factors in the following order:

Whether the individual maintains a permanent home in the country;

Whether the country is closer in relation to the individual's personal and economic relations;

Whether the country is the individual's habitual abode; and

Whether the individual has citizenship in the country.

Canadian Income Tax Implications of Ceasing to be a Canadian Resident

Reporting Obligations

Canada's taxation system is based on residence. Residents of Canada are subject to taxation on their worldwide income while non-residents are only subject to taxation on certain types of Canadian source income. When an individual ceases to be a resident, the provisions of the Canadian Income Tax Act attempts to tax the individual on all his or her income earned up to the date that residence terminates (date of departure), especially the income that will not be taxable once the individual becomes a non-resident. This tax is referred to as the "departure tax".

Ok, so are you saying that when I get to the U.S with my K1 visa, I call the CRA and let them know I moved out of Canada, and to stop issuing me CTB/UCCB & GST checks? Were going the K1 route, so I wont be putting on my tax return this year that Im moving this upcoming year, since it wont be till early next year anyways. Or do I continue getting CTB until the end of the year that I moved?

[trailmix 77]

Ok, so are you saying that when I get to the U.S with my K1 visa, I call the CRA and let them know I moved out of Canada, and to stop issuing me CTB/UCCB & GST checks? Were going the K1 route, so I wont be putting on my tax return this year that Im moving this upcoming year, since it wont be till early next year anyways. Or do I continue getting CTB until the end of the year that I moved?

Personally, I would call them and tell them you are moving and to stop payments.

I mean, I guess in theory you could continue the payments and then pay them all back next year, but why would you bother with that hassle?

For example, with the CCTB - they specifically ask you to contact them if you are no longer a resident of Canada:

6. You or your spouse or common-law partner's immigration or residency status has changed

If this is the case, please call 1-800-387-1193.

Same for GST:

6. You or your spouse or common-law partner is no longer a resident of Canada

Call 1-800-959-1953 to tell us. When applicable, we will recalculate your credit and send you a GST/HST credit notice showing our revised calculation.

I don't know about the UCCB - but since it is tied to the CCTB they can probably cancel them both at the same time.

[zyggy 9]

Ok, sorry to jump in here, but if you are recieving CTB and UCCB, isnt it a good idea to mail in the NR73??

Or continue to keep having the payments come for the rest of the year, and stash it in savings until they ask for it back?

I was researching this yesterday for after I enter with a K1... at what point I lose the CT amounts and the UCCB, and from what I read, you lose it the day you receive a greencard, since you are not a resident of the US yet

Those payments are based on your tax return.

If you state on your tax return that you ceased to be a resident on such and such a date you won't receive them following that.

As for current, say you have a GST cheque coming to you in October but you left the country in September, you need to call them in September and say - I am leaving the country on September 15th, don't send me any more money.

I don't think there is any Canadian tax law that says in black and white that if you meet this one criteria (for instance getting your green card) you are no longer a resident of Canada.

Residential Ties Elsewhere

The Courts have indicated that an individual must be resident somewhere, but they can also have more than one residence at the same time. Therefore, the fact that the individual is considered a resident of some other country does not preclude a finding that he or she is still resident in Canada.

From this article - which I think is very well written.

Canadian Tax Considerations for Canadians Moving Permanently to the United States

Determination of Residence for Canadian Income Tax Purposes

The term resident is not defined in the Canadian Income Tax Act so we need to refer to case law. Canadian Tax Courts (the "Courts") have held that an individual is resident in Canada for tax purposes if Canada is the place where he, in his settled routine of his life regularly, normally or customarily lives. Canada Customs and Revenue Agency ("CCRA"), formerly Revenue Canada, has indicated that the determination of an individual's residence status is a question of fact and is based on a number of factors that have been set out by the Courts. These factors are discussed below:

Permanence and Purpose

CCRA considers the degree of permanence. For example, if the individual has been absent for less than 2 years, it is presumed that he or she has retained Canadian residence unless all ties to Canada have been severed. If the emigrating individual's return to Canada is foreseen before his or her departure, CCRA will conclude that the individual never ceased to be a resident of Canada.

Residential Ties to Canada

Residential ties to Canada may include the following:

A home which may be kept vacant or leased to a non-arm's length person or for a short term period;

Spouse and dependants who may stay behind unless separated;

Personal property such as furniture, clothing, automobile, driver's license, bank accounts, credit cards, debit cards, etc.;

Provincial medical coverage, cottage, professional memberships, child care benefit payments and GST payments; and

Social memberships in clubs, charities & volunteer organizations.

Residential Ties Elsewhere

The Courts have indicated that an individual must be resident somewhere, but they can also have more than one residence at the same time. Therefore, the fact that the individual is considered a resident of some other country does not preclude a finding that he or she is still resident in Canada.

Regularity and Length of Visits to Canada

An individual can make the occasional return visits for business or personal reasons but if visits are on a regular basis then this may indicate that the individual continues to be a resident of Canada.

If the individual leaves Canada for two years or less, CCRA's administrative policy is that the individual is presumed to have retained their Canadian residence during their absence, unless he or she can establish that the return to Canada was unforeseen at the time of departure. Any evidence of intent to return to Canada within two years of departure, will cause CCRA to conclude that the individual was a continuing resident of Canada, for tax purposes, during the two years that he or she was absent. This two-year rule is only an administrative policy of the CCRA and has no basis in law.

CCRA has centralized the determination of residence in its International Tax Services Office in Ottawa, and has established procedures to allow the determination of non-residence in advance of an emigrant's departure. An emigrant is not required to obtain this prior determination, but it may be advantageous if he or she requires residence status to be clarified prior to departure. Form NR73 should be completed to request a determination of residence status.

Some of the steps that an emigrant should take in order to be considered a non-resident of Canada are:

Close all Canadian bank accounts if possible or inform the banks of the change in residence.

Inform Canadian remitters of income, such as mutual funds and securities brokers, of their non-residence status to ensure that they withhold tax on payments of certain types of income. Canadian Registered Retirement Savings Plan ("RRSP") and Canadian Registered Retirement Income Fund ("RRIF") accounts are included.

Advise social clubs and professional associations of the change in their status from a resident member to a non-resident member or have them discontinue the memberships if they don't allow non-resident members.

Ensure that a residence is not available in Canada for personal use during the period of non-residence by either selling or leasing his or her home.

Cancel provincial health care coverage.

Termination of Canadian Residence

Date of Departure

The date of departure is generally considered to have occurred on the latest of:

The date the individual leaves Canada;

The date the individual's spouse and/or dependants leave Canada; or

The date the individual becomes a resident of a country to which he or she is immigrating.

Dual Residence

An individual can be a dual resident if he or she creates residential ties in the United States but does not sever all ties in Canada. In such a situation an individual could be subject to double taxation. Relief from this situation is provided by the Canada–U.S. Income Tax Convention. This Convention for the most part will provide a determinacy of residence between Canada and the United States that will override domestic tax law. When an individual is considered a resident of both countries by virtue of domestic law, an individual's residence status is determined by considering which country to which the individual has a closer connection. This is determined by considering the following factors in the following order:

Whether the individual maintains a permanent home in the country;

Whether the country is closer in relation to the individual's personal and economic relations;

Whether the country is the individual's habitual abode; and

Whether the individual has citizenship in the country.

Canadian Income Tax Implications of Ceasing to be a Canadian Resident

Reporting Obligations

Canada's taxation system is based on residence. Residents of Canada are subject to taxation on their worldwide income while non-residents are only subject to taxation on certain types of Canadian source income. When an individual ceases to be a resident, the provisions of the Canadian Income Tax Act attempts to tax the individual on all his or her income earned up to the date that residence terminates (date of departure), especially the income that will not be taxable once the individual becomes a non-resident. This tax is referred to as the "departure tax".

Ok, so are you saying that when I get to the U.S with my K1 visa, I call the CRA and let them know I moved out of Canada, and to stop issuing me CTB/UCCB & GST checks? Were going the K1 route, so I wont be putting on my tax return this year that Im moving this upcoming year, since it wont be till early next year anyways. Or do I continue getting CTB until the end of the year that I moved?

Actually you can try to send CRA anything you want to tell them you moved and they won't stop sending the checks. We called and sent our tax center a letter and nothing stopped. You just have to put it in a savings account somewhere and pay it back when they send you the invoice after you file the leaving Canada return. If they have gotten better at it since when we came over on the K-1, well all the better. But don't be surprised if it doesn't stop.

Do not send an NR-73. It will not stop the checks and only has the potential to get you into trouble as I have explained.

Edited January 8, 2009 by zyggy

[zyggy 9]

Ok, sorry to jump in here, but if you are recieving CTB and UCCB, isnt it a good idea to mail in the NR73??

Or continue to keep having the payments come for the rest of the year, and stash it in savings until they ask for it back?

I was researching this yesterday for after I enter with a K1... at what point I lose the CT amounts and the UCCB, and from what I read, you lose it the day you receive a greencard, since you are not a resident of the US yet

Be careful how you read things. Actually you lose it when you are no longer a resident of Canada. That is not the same as the date you get a Greencard. The date you enter the US on the K-1 is generally considered to the date you ceased to be a resident of Canada.

Edited January 8, 2009 by zyggy