What sort of return to file as a PR - Resident or Non-resident

[dbag]

Hello,
I along with family (total 2 adults and 2 children) landed as PR in early August 2013 in Canada. We stayed for approx. 3 months during which we applied for SIN cards, Health cards, CCTB, UCCB, GST/HST credits and PR cards (all recvd./started before departure). We also opened bank accounts, credit cards and entered into 11-month sub letting agreement for part of a house starting Sept. 2013. I had applied for leave from my job here in India and since I didn't get a job there and my leave was not extended, I had to return back to my job in late Oct. 2013. However there was no formal termination of the agreement for the house there and on return, I intimated my Indian address to CRA only recently.

Now I am trying to return to Canada permanently (in 2nd half 2014) after quitting my job here but the due date (May 5?) for tax return filing date is almost here, I wanted to get some valuable opinion from the members regarding my status for filing my returns for 2013 urgently. Do I file as a resident or non-resident of Canada in the tax return : and if as non-resident, should I refund the overpayment of CCTB etc. along with my returns immediately? My bank interest income in Canada is v. less (less than $10) since I didn't put much money in taxable accounts there. Your inputs are v. much appreciated.

Rgds,
DBag

 

[steaky]

I don't think you need to file any tax return if you and your family had left Canada and returned to India in late Oct 2013. You should have refund the overpayment of CCTB etc immediately. But I suggest you to retain a professional accountant soon to provide you expert advices and professional needs.

 

[torontosm]

Hello,
I along with family (total 2 adults and 2 children) landed as PR in early August 2013 in Canada. We stayed for approx. 3 months during which we applied for SIN cards, Health cards, CCTB, UCCB, GST/HST credits and PR cards (all recvd./started before departure). We also opened bank accounts, credit cards and entered into 11-month sub letting agreement for part of a house starting Sept. 2013. I had applied for leave from my job here in India and since I didn't get a job there and my leave was not extended, I had to return back to my job in late Oct. 2013. However there was no formal termination of the agreement for the house there and on return, I intimated my Indian address to CRA only recently.

Now I am trying to return to Canada permanently (in 2nd half 2014) after quitting my job here but the due date (May 5?) for tax return filing date is almost here, I wanted to get some valuable opinion from the members regarding my status for filing my returns for 2013 urgently. Do I file as a resident or non-resident of Canada in the tax return : and if as non-resident, should I refund the overpayment of CCTB etc. along with my returns immediately? My bank interest income in Canada is v. less (less than $10) since I didn't put much money in taxable accounts there. Your inputs are v. much appreciated.

Rgds,
DBag

Dbag, your situation is a bit of a mess. As you know, you are not eligible for CCTB and UCCB unless you are a resident of Canada. So, unless your entire family has been residing here without you, you have been claiming those benefits illegally. If your family has been living here, then you are classified as a resident for tax purposes and must report and pay tax on your global income (including your salary and income in India). Either way, you must report the CCTB and UCCB income on your tax return and I'm sure the CRA will figure this out pretty quickly.

 

[cmathslu]

I don't think you need to file any tax return if you and your family had left Canada and returned to India in late Oct 2013. You should have refund the overpayment of CCTB etc immediately. But I suggest you to retain a professional accountant soon to provide you expert advices and professional needs.

You are right, filling taxes determines where are you in Dec 31,2013. And if you are resident of Canada working abroad.

 

[dbag]

Thanks for your replies, Steaky, torontosm and cmathslu.

@Steaky,
I also thought that no tax return was reqd. but from other posts even ppl. who have been 1 month in Canada have been asked to file returns by CRA (is
Dec. 31 location in Canada the reason?). Also having so many secondary ties with Canada and with intention to return there, I think filing non-res. return
will be best for me. I am planning to contact CRA reg. the same and how to refund the CCTB etc for ppl. who don't have 'My Account' with CRA.

@torontosm,
Yes I am in a tricky situation but I am still not 100% sure whether I was res. or non-res. for tax purposes in Canada for 2013. My family returned with me but
the lease agreement was not annulled formally and coupled with so many sec. ties in Canada, along with the fact that I didn't know that non-res. were not entitled to
benefits I am still confused and therefore going to contact CRA as stated above.

@cmathslu,
Is Dec 31 res. in Canada the only deciding factor for non-res./res. determination for tax purposes? How about intention to return to Canada in the next yr...

Rgds
DBag

 

[torontosm]

@ torontosm,
...along with the fact that I didn't know that non-res. were not entitled to
benefits I am still confused and therefore going to contact CRA as stated above.

I'm not sure how this could be confusing, given it is spelled out very clearly on the CRA website, and on the forms where you have to apply for the benefits. Did you honestly believe that the Government of Canada would give you "spending money" for free while you were living in India?

The factors that influence your status as a resident or non-resident for tax purposes include (from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html):

The most important thing to consider when determining your residency status in Canada for income tax purposes is whether or not you maintain, or you establish, residential ties with Canada.

Significant residential ties to Canada include:

a home in Canada;
a spouse or common-law partner in Canada; and
dependants in Canada;
Secondary residential ties that may be relevant include:

personal property in Canada, such as a car or furniture;
social ties in Canada, such as memberships in Canadian recreational or religious organizations;
economic ties in Canada, such as Canadian bank accounts or credit cards;
a Canadian driver's licence;
a Canadian passport; and
health insurance with a Canadian province or territory.


Your residency status if you left Canada
If you are working temporarily outside Canada, vacationing outside Canada, commuting (going back and forth daily or weekly) from Canada to your place of work in the United States, or teaching or attending school in another country, and you maintain residential ties with Canada, you may be considered a factual resident of Canada.
If you left Canada and established a permanent home in another country and you severed your residential ties with Canada and ceased to be a resident of Canada in the tax year, you may be considered an emigrant.
If you established ties in a country that Canada has a tax treaty with and you are considered a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada, you may be considered a deemed non-resident of Canada. The same rules apply to deemed non-residents as non-residents of Canada.
If you left Canada and you are a government employee outside Canada, which includes members of the Canadian Forces posted abroad, you are usually considered a factual resident or a deemed resident of Canada. For more information, see Government employees outside Canada.

 

[cmathslu]

Thanks for your replies, Steaky, torontosm and cmathslu.

@ cmathslu,
Is Dec 31 res. in Canada the only deciding factor for non-res./res. determination for tax purposes? How about intention to return to Canada in the next yr...

I am not really sure but I have a situation when I did taxes for specific family, they give a notice to Cra when they left around 2010, so they did not file their tax back then, and then they came back in Sept of 2013. They only filed 2013 after leaving Canada in 2010. They stop receiving all benefits in 2010 and pay back some of it. They started receiving benefits back again when they give a notice to CRA. This family are all Canadian Citizen.

Hope this situation appliesnto you.