Revenue Canada

[NiceGrL 0]

Hello,

Do we need to inform Revenue Canada about our move to the U.S.? If so, how do we address them - by phone, mail, fax or email???! What is their contact information? And how will it affect us in terms of health benefits, filing taxes, etc. Please please advise. Your help is greatly appreciated! Thanks so much .

[Joel Halfwassen 0]

Submit a change of address for yourself via the website...http://www.cra-arc.gc.ca/eservices/tax/individuals/menu-e.html

You will need to file taxes for the time you were living in Canada. You will need to file US taxes for the time you are in the US. Revenue Canada will send you forms and things to your new address. What you REALLY need to make sure of is that the tax forms your employers send to you gets to the right place. As for the rest...I honestly have no idea.

Edited July 13, 2006 by Joel Halfwassen

[Jersey Girl 2]

I'm a dual citizen who has been dealing with Canada-U.S. returns for years, and can say, it's best to get the complete facts. good place to start

I thought it was going to be a simple matter of moving to the States and filing an exit (or departure) income tax return to Rev Can, complete with my new, U.S. address. But there are issues that may make you taxable in Canada even after your move.

For one thing, you have to cut all financial ties, returning your credit cards, etc. You also have to turn in your health card, drivers license, and the list goes on. I got a big surprise to find that a year after my move to the States, I'm still considered taxable in Canada because my husband is living in Toronto while he waits for his visa. Oh Canada!

[ceriserose 1]

I'm a dual citizen who has been dealing with Canada-U.S. returns for years, and can say, it's best to get the complete facts. good place to start

I thought it was going to be a simple matter of moving to the States and filing an exit (or departure) income tax return to Rev Can, complete with my new, U.S. address. But there are issues that may make you taxable in Canada even after your move.

For one thing, you have to cut all financial ties, returning your credit cards, etc. You also have to turn in your health card, drivers license, and the list goes on. I got a big surprise to find that a year after my move to the States, I'm still considered taxable in Canada because my husband is living in Toronto while he waits for his visa. Oh Canada!

This is a bit misleading and not necessarily the situation for the average person emigrating. Per Revenue Canada's International Tax office there is a list of criteria that they use to determine residency under the US-Canada Tax treaty. I know most assuredly that one does NOT have to sever all financial ties...if that were the case then why would there be a 25% non-resident tax?

Finances are considered a 'secondary' measure of residency. The 'primary' measure is if you own vacant property that you could conceivably return to (established resident) or if you have a spouse/immediate family living in Canada while you live in the US. Note that owning property in Canada that is rented out to someone else is not considered a primary measure. In the situation described above, with a spouse in Canada, permanent residency is established per those terms.

There are plenty of Canadians even on this board who have maintained their financial ties to Canada while living in the US...bank accounts with balances, credit cards, loans (not to mention being able to collect EI and pensions!).

If a person emigrating leaves Canada, as far as letting 'officials' know, you need to let Revenue Canada know your change of address now and when you file taxes the next year indicate the date you left. If you maintain a bank account in Canada you need to advise your bank of your change of address to the US (they will manage informing the government on your non-resident status from their end). As for loans, credit cards and the like, ask them individually. I changed my address with my last credit card in Canada and they mail me my statement here...absolutely no issue.

Oh, and the surprise I got, if you have 'borrowed' against any RRSPs for the Home Buyers Plan or Lifelong Learning Plan, that money is required to be repaid (in full!) within 60 days your Canadian departure date. If you don't, it counts as income for that tax year.

Revenue Can International Tax Office #: 1-800-267-5177

Oh, and the driver's license thing varies from state to state. I didn't have to turn mine in when I left and in Washington could have driven on it for a year before switching over (which I understand is more the norm than not). Check with the DOL for the state you're moving to.

[Jersey Girl 2]

This is a bit misleading and not necessarily the situation for the average person emigrating. Per Revenue Canada's International Tax office there is a list of criteria that they use to determine residency under the US-Canada Tax treaty. I know most assuredly that one does NOT have to sever all financial ties...if that were the case then why would there be a 25% non-resident tax?

You're right, every case is different. That's why I used the services of a cross-border investment advisor as well as tax preparer. I realize there are Canadians who move to the States and hold onto financial assets (bank accounts, RRSPs) as non-residents. But the advice I was given was to have a systematic, tax-conscious plan to move all assets to the States.

The objective is to have no financial ties (or reason return) and after withdrawing RRSPs, no obligation to pay the 25% non-resident tax. As you point out, it's not a requirement to cut all financial ties. It's a financial strategy designed to prove I'm no longer a resident or likely to become one again.

If Rev Can wanted to make a case that I'm still liable for tax on worldwide income, even though I live in the States, I wouldn't want to have an OHIP card in my wallet or an Ontario driver's license. Again, it's not a rule, just a good rule of thumb.

[ceriserose 1]

This is a bit misleading and not necessarily the situation for the average person emigrating. Per Revenue Canada's International Tax office there is a list of criteria that they use to determine residency under the US-Canada Tax treaty. I know most assuredly that one does NOT have to sever all financial ties...if that were the case then why would there be a 25% non-resident tax?

You're right, every case is different. That's why I used the services of a cross-border investment advisor as well as tax preparer. I realize there are Canadians who move to the States and hold onto financial assets (bank accounts, RRSPs) as non-residents. But the advice I was given was to have a systematic, tax-conscious plan to move all assets to the States.

The objective is to have no financial ties (or reason return) and after withdrawing RRSPs, no obligation to pay the 25% non-resident tax. As you point out, it's not a requirement to cut all financial ties. It's a financial strategy designed to prove I'm no longer a resident or likely to become one again.

If Rev Can wanted to make a case that I'm still liable for tax on worldwide income, even though I live in the States, I wouldn't want to have an OHIP card in my wallet or an Ontario driver's license. Again, it's not a rule, just a good rule of thumb.

I can appreciate the difference between a sound financial strategy to achieve an end goal, and a government requirement, mainly because I can read through the lines of your post. A person completely unversed in any of this might not see the distinction. Especially when you use words like "have to".

Sometimes answering beyond the question only leads to more confusion. I just wanted to clear that up.

Thanks for your reply.