when did i become a Resident?

[agrisiva]

hi,

my wife and i landed in Canada last May. After staying couple of weeks to help her settle down in Canada, I went back to US (just myself) and continued working for 3 more months. Then i came back to Canada in August and got my first Canadian job and my Canadian drivers license. So i am kind of confused, to figure out which month i became a Resident.

(If i became a resident in May, my 3 months salary in US is taxable to Canada right?  although i get some tax credit for US taxes paid!  )

[Baloo]

You became a permanent resident when you landed.

Check these pages at the CRA
http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nwcmr-eng.html

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html


I suggest that a call to the CRA would be a good idea.

[agrisiva]

ok,  i just got off the phone with CRA. As i never lived in Canada before May 2010, stayed only couple of weeks in May to help my wife settle in Canada, and continued to maintain the rented place in US, and have no children, i become resident only in August 2010. Just because my wife started living here from May, i am not becoming a resident - automatically. Thanks.

[m_alihussain]

Hi !

I am Permanent resident landed in May 2010 and went back to home country to settledown personal matters like to resign from my empolyer and came back to Canada on Mar 2011. I just want to know that during this period b/w May 2010 and Mar 2011 i had empolyed at foreign employer and earn income so should may i disclose to CRA that i earn income pertaining to 2010 in 2010 return.

One more thing i would like to add here that during that period i have not taken or applied for benefits of Canada like Health card, GST/HST Credit etc but earn some income on saving account from canadain bank which i am going to add in 2010 return through T5 and i am living alone in canada no spouse and no dependents.

anyone give me comments on this issue.

[agrisiva]

With no residential ties, you may have to file the return for 2010 as a non-resident. It should be pretty easy with your bank interest as the only income. More info here...

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

bank accounts and drivers license are secondary ties. Ideally the best choice would be to submit NR74 form, but you got no time now. So just file it as non-resident and see if they ask you for more info later.

[scylla]

I have a moronic question. I should probably know the answer - but I don't. And I can't seem to find it on any government web sites.

My husband landed in October of last year (2010) and has been living in Canada since then. He is a US citizen. He had income last year that would be classified as "worldwide income" from a Canadian tax standpoint.

When completing his Canadian tax return, does he report is worldwide income for all of 2010? Or only his landing date (October) forward?

[agrisiva]

check out....

http://www.cra-arc.gc.ca/E/pub/tg/t4055/README.html

Income:
You have to report your world income for the part of the year that you were a resident of Canada. World income is income from all sources, both inside and outside Canada...

[scylla]

Thanks!!!!

[toby]

ok,  i just got off the phone with CRA. As i never lived in Canada before May 2010, stayed only couple of weeks in May to help my wife settle in Canada, and continued to maintain the rented place in US, and have no children, i become resident only in August 2010. Just because my wife started living here from May, i am not becoming a resident - automatically. Thanks.

That's interesting!  The advice you got on the phone contradicts the advisories that CRA publishes. 

As of May (not August), you seem to satisfy two of the three main criteria declaring someone a Canadian taxpayer. You have a dependant in Canada (your wife), and you presumably have access to the same home she occupies throughout the year.  So May would seem to be the month you became a taxpayer.

CRA is notorious for giving bad advice to some taxpayers, and then covering themselves by saying you legally are not entitled to rely on their advice; you must consult  an independent tax adviser.

I would advise you to try to get their advice in writing for your file.  Some day  in the future you may be audited, and CRA will want to at least charge you  interest on unpaid taxes on foreign income between May and August 2010 (if not levy a penalty, depending on the auditor`s mood)-- but their letter advising August instead of May may help you  negotiate a better deal.

If they won`t put it in writing, carefully note name and title of the person who advised you, so you can at least cite your àuthority`for using August as your landing date.

[agrisiva]

thanks Toby for your response. You make sense to me, I was having the same second thought in my mind, we cannot solely rely on a customer service agent on the phone. If its not too much of a difference in $, I am going to go with May as start date, as it will be consistent with my wife's Return and my landing document. That will avoid unnecessary confusion/questions for a reviewer at CRA as well.

[Felix07Richerd]

As a permanent resident, you receive certain rights and privileges, even though you remain a citizen of your home country.

[toby]

You became a permanent resident when you landed.

Check these pages at the CRA
http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nwcmr-eng.html

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html


I suggest that a call to the CRA would be a good idea.

I'm going to post a separate topic to Jonboy, titled Different tax laws for newcomers and possible trap for non-taxpayers??

[Jonboy]

That's interesting!  The advice you got on the phone contradicts the advisories that CRA publishes. 

As of May (not August), you seem to satisfy two of the three main criteria declaring someone a Canadian taxpayer. You have a dependant in Canada (your wife), and you presumably have access to the same home she occupies throughout the year.  So May would seem to be the month you became a taxpayer.

CRA is notorious for giving bad advice to some taxpayers, and then covering themselves by saying you legally are not entitled to rely on their advice; you must consult  an independent tax adviser.

I would advise you to try to get their advice in writing for your file.  Some day  in the future you may be audited, and CRA will want to at least charge you  interest on unpaid taxes on foreign income between May and August 2010 (if not levy a penalty, depending on the auditor`s mood)-- but their letter advising August instead of May may help you  negotiate a better deal.

If they won`t put it in writing, carefully note name and title of the person who advised you, so you can at least cite your àuthority`for using August as your landing date.

I agree with toby.  It is not as clear cut as the representative is making out.

There is no legislation that sets out how to determine tax-residency.  The nearest without research through case law is the CRA`s own interpretation bulletin.  See here http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html#P123_18961 and look at paragraph 16 (and 5 and 6).

It is a grey area.