What Canadians Abroad Need To Know About Filing Taxes | 2023 TurboTax® Canada Tips (2024)

FAQs

Do Canadians living in the US have to file Canadian taxes? ›

As both a resident of the US and Canada—meaning you have a home in and are considered a resident of both countries—you'll likely file both Canadian and US tax returns, which could lead to double taxation.

You can file your completed tax return with the Canada Revenue Agency (CRA) online or by mail. If you are a non-resident, you can only send your tax return by mail.

Your tax obligations. As a non-resident of Canada, you pay tax on income you receive from sources in Canada. The type of tax you pay and the requirement to file an income tax return depend on the type of income you receive. Generally, Canadian income received by a non-resident is subject to Part XIII tax or Part I tax.

The 183 day rule states that if you spend less than 183 days in Canada in a calendar year, you are not considered a resident for tax purposes. This means you do not have to pay Canadian income taxes on your worldwide income. Instead, you only pay tax on income earned in Canada.

How to avoid double taxation. Canadian taxpayers avoid double-taxation by making a claim on their return for a foreign tax credit (FTC). That is to say, you get to claim a credit on your Canadian return for an amount of tax paid to a foreign country.

Federal law requires U.S. citizens and resident aliens to report their worldwide income, including income from foreign trusts and foreign bank and other financial accounts.

If you don't meet the 90% rule, several credits must be pro-rated based on your date of entry. You meet the 90% rule if, in the part of the year before you moved to Canada: you didn't earn any foreign-source income, or. 90% or more of your income was Canadian-sourced.

The 90% rule refers to at least 90% of a non-residents income from the tax year being sourced in Canada. If you have earned at least 90% of your net income in the tax year in Canada you will be entitled to claim non-refundable tax credits, allowing you to earn up to $15,705 tax free income in Canada.

No matter the visa, the CRA still considers you a Canadian resident and taxes you as though you never left. So file as you normally would, being sure to report all sources of income, no matter where in the world you earned it.

As long as they want. A Canadian citizen never loses their citizenship or right to live in Canada not matter how long they stay out of the country. They will generally lose their provincial health care after 6 months absence ( depending on the province ).

What income is not taxable in Canada? ›

lottery winnings, and raffle prizes, unless the circ*mstances deem that the proceeds are considered income from employment, business or property, or a prize for achievement. For instance, prizes from employer-promoted contests could be considered employment income.

Any income earned in offshore accounts has to be declared by Canadian residents. Failure to do so is tax evasion and can lead to jail time. Is a gift from a foreign person taxable? There is no gift tax in Canada.

In actual fact, you can be absent from Canada as long as you want. The Canadian government recognizes that citizens may travel extensively, work or study abroad. You will always maintain your Canadian citizenship. What absentia may affect is your Canadian health care coverage and income tax.

Canada's residency obligation for permanent residents requires a person to be physically present inside of Canada for at least 730 days within a five-year period or to fall under one of several exceptions.

If you entered Canada

The same rules apply to deemed non-residents as non-residents of Canada. You may be considered a deemed resident of Canada if you have not established significant residential ties with Canada to be considered a factual resident, but you stayed in Canada for 183 or more days in the year.

Yes, if you are a citizen or resident alien of the United States, you have a U.S. tax obligation, even if you're a dual citizen of the U.S. and Canada. The U.S. is one of two countries in the world that taxes based on citizenship, not place of residency.

You Must File an Income Tax Return, if:

You owe tax to the CRA. You are self-employed and have to pay your Canada Pension Plan (CPP) premiums. Same for paying Employment Insurance (EI) premiums on your self-employment earnings. You and your spouse/common-law partner want to split your pension income.

You must file a return if: You owe income tax to the government (e.g., you earn significant income in Canada). You're asked by the CRA to file a return.

If you are considered a non- resident of Canada, you are subject to income tax on Canadian-source income only. The income tax may be collected through non-resident withholding tax that is withheld at source or the requirement to file Canadian non-resident tax returns.