Author Topic: Date of becoming Canadian Resident for tax purposes  (Read 400 times)

ygarg

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Date of becoming Canadian Resident for tax purposes
« on: June 26, 2018, 08:02:14 AM »
I landed in Canada as a permanent resident on December 24th, 2016 and left after 8 days on January 1st 2017. In the 7 days here, I got the SIN number, opened a bank account and credit card. I lived in the USA for entire 2017 and returned to Canada on December 30th 2017 and since then I've been living here. I started a new job in Canada on January 8th 2018. I've not filed any Canadian tax returns because I didn't earn any income here and lived here only for 8 days in 2016 and 3 days in 2017 and neither have I've received any benefits. To apply for any benefits now like child benefit, what is the date that I became a Canadian resident for tax purposes ? I'm an Indian citizen. I was resident alien for US tax purposes in 2017.

Thanks.

Phil Hogan, CPA, CA, CPA (Colorado)

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Re: Date of becoming Canadian Resident for tax purposes
« Reply #1 on: June 27, 2018, 01:53:36 PM »
Hi Ygarg

The date where you will become a Canadian resident will be a matter of fact. There is an argument that you were a resident of Canada in December of 2016, however considering you were in the US for most of 2017 subsequent to this you may have a strong argument that you were not a resident until your return in December of 2017.

How much did you earn in the US during 2017? Are you a US citizen?

Phil
Phil Hogan, CPA, CA, CPA (Colorado)
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ygarg

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Re: Date of becoming Canadian Resident for tax purposes
« Reply #2 on: June 28, 2018, 10:52:01 AM »
I'm not a US citizen. I'm an Indian citizen. I was resident alien for US tax purposes in 2017 because that was my 6th calendar year in the US. I earned $160K USD in 2017.

Phil Hogan, CPA, CA, CPA (Colorado)

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Re: Date of becoming Canadian Resident for tax purposes
« Reply #3 on: June 29, 2018, 07:52:56 AM »
That may be tough. You'll need to make a strong argument that you were not yet a resident of Canada for 2017 before you made the $160k as this amount would be taxable as worldwide income on your Canadian return. That being said, you would get a credit for any US taxes paid to the extent that you paid tax in the US

Phil
Phil Hogan, CPA, CA, CPA (Colorado)
250-381-2400
Hutcheson.ca
phil@hutcheson.ca
* The information contained in these posts should not be construed as professional advice and is for informational purposes only.

ygarg

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Re: Date of becoming Canadian Resident for tax purposes
« Reply #4 on: June 29, 2018, 08:44:16 AM »
Thanks. That means it's just better to wait and apply for benefits starting next year, because otherwise I'll pay more in taxes for 2017 than what I'll get in benefits. I don't need to file Canadian taxes for 2017 because I lived here less than 183 days in 2017, right ?

Phil Hogan, CPA, CA, CPA (Colorado)

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Re: Date of becoming Canadian Resident for tax purposes
« Reply #5 on: June 29, 2018, 08:51:49 AM »
Not necessarily. The 183-day rule most often applies to those that are in and out of the country, not those that potentially move to Canada to maintain residency. CRA would assess residency based on ties and not the 183 day rule. It will be up to you to argue that you were not a resident for all of 2017.

Phil
Phil Hogan, CPA, CA, CPA (Colorado)
250-381-2400
Hutcheson.ca
phil@hutcheson.ca
* The information contained in these posts should not be construed as professional advice and is for informational purposes only.