Answers Archive

What is the deal here???

Hi Michèle, Thank you for your question! You raise an important point about tax compliance when leaving Canada and living abroad. 1. Departure Tax & Residency Rules When a Canadian taxpayer permanently leaves Canada, they may be considered a non-resident for tax purposes. This means they are required to: ✔ File a final tax return … Continue reading

Cost of reporting FHSA in the US

Hi Ivan, Thank you for reaching out! Given your FHSA (First Home Savings Account) and your U.S. tax obligations, here are a few key considerations: 1. Reporting FHSA in the U.S. The U.S. does not recognize the FHSA as a tax-deferred account, which means: ✔ Any income (such as GIC interest) earned within the FHSA … Continue reading

work as an intern in the uS

Hi, You should file Form 1040NR (Non-Resident Alien Income Tax Return) to report your U.S. income, even if your employer withheld the correct amount of tax. The filing deadline is April 15, 2025. As a Canadian tax resident, you’re required to report your worldwide income, including any foreign income earned in the U.S., on your … Continue reading

Signing a lease as a non-resident

Hi Michele, You will continue to be a resident of Canada if you sign a lease agreement with your son to rent an apartment/home in Canada. A home in Canada available for your use is a primary tie to Canada.

My tax software shows two tax balances owing – Federal and Provincial. I assume I add these together for putting in line (9990)?

Hi Jonny, Record the current income tax expense (federal + provincial) on GIFI code 9990. Note that the corporate income tax payable can be different from the income tax expense if you made installment payments during the year

Empoyee loan

Hi Kam, In this case, the family member is using the loan for a personal investment. The key question here is whether the loan is used for a purpose that is tied to the corporation’s business or personal activities. Since this loan is being used for a personal investment (not related to the business), the … Continue reading

Departure tax in Canada

Hi Cari, Yes, you will pay departure tax to the CRA on your Spanish property. Canada imposes a departure tax on individuals who cease to be Canadian tax residents. This tax is applied to the deemed disposition of most of your assets when you leave Canada, which includes properties, investments, and other assets. The deemed … Continue reading

I made 3k in ebay canada store

Hi Hakan, Even though you are not a Canadian resident, because you have earned income from a Canadian eBay account, the CRA will want you to report this income, especially because your earnings are from Canadian-based sources. To report income to the CRA, you generally need a Social Insurance Number (SIN) or an Individual Tax … Continue reading

Tax implications of moving RRSP to Australia

Hi Joy, You can’t directly transfer an RRSP into an Australian superannuation fund (super fund), as the tax treatment and account structures differ significantly between Canada and Australia. You could withdraw the funds from your RRSP and then transfer the cash to an Australian superannuation fund or other investment vehicle. However, this would trigger Canadian … Continue reading

Canadian Departure tax on a property abroad that is not yet fully acquired

Hi Michele, 1. Deposit on Property Abroad Before Departure If you put a deposit on a property abroad before leaving Canada but the property completes after you depart, you will not owe departure tax. 2. Buying Property in the Same Year as Departure If you buy property abroad in the same year you leave Canada, … Continue reading

NR4 slip questions

Hi Sam, Here are the answers to your NR4 slip-related questions: 1. Exemption Code for 15% Withholding (Due to Treaty) If you deducted 15% withholding tax instead of the standard 25% on dividends, you should use the appropriate exemption code from the Canada-U.S. Tax Treaty. The specific code you should use is “01”, which applies … Continue reading

Leaving Canada and Cross border planning.

1. Maintaining Non-Resident Status in Canada Yes, it’s possible to maintain non-resident status in Canada if you have no primary residential ties (e.g., no spouse or children in Canada, no significant property, etc.). However, secondary ties (e.g., rental property, bank accounts, visits) can be scrutinized. If you’re a non-resident, your non-Canadian income (like from the … Continue reading

Sale of Vacation home in US and tax Implications

Hi Randy, Since the property was never rented out and is not connected with a business or trade, the gain from the sale would not be treated as effectively connected income with a U.S. trade or business. It would typically be reported on Schedule D (Form 1040NR) instead of Form 4797, as it is considered … Continue reading

FICA witholding for non-resident aliens after 2 years of presnse in the US

Hi Max, You’re correct that J-1 visa holders (trainees) may remain exempt from FICA taxes if they continue to qualify as non-resident aliens (NRAs) under the U.S.-Canada tax treaty, even after the two-year period generally used to determine the Substantial Presence Test (SPT). As you pointed out, the key factor is the treaty-based position, which … Continue reading

US tax for TN status Holders

Hi Ron, The first step is to determine if you and your wife meet the US Substantial Presence Test (SPT). If you meet the US SPT, you will be treated as resident aliens for tax purposes and must file a dual-status return with the IRS. If you do not meet the US SPT requirement, you … Continue reading

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