Canada income tax for non residents

[skrishnappa]

Hi - I was in Canada from July 11 2013 to Oct 19 2013. I was working in Canada temporarily and moved back to USA once i got my visa. I earned about 21000 CAD during my employment in canada and paid about 4700 CAD as taxes. My CPP was about 1000 CAD. I am filing my taxes now. Should i file the returns as non resident? One of the tax accountants says that i will receive only 1600 CAD as tax returns but i am thinking i should receive most of the taxes paid (atleast close to 3000 CAD). In the USA, even if someone stays for a month, the deductions are calculated for the whole year. Is it not so in Canada? Please advice.

 

[Rosie1957]

A lot is going to depend on what your total income from all countries was for the year. If your Canadian income makes up at least 90% of the total, then you're entitled to the full personal amounts. If it's less, then as a non-resident you're entitled to *no* personal amounts, although you can still deduct your CPP and EI amounts withheld as well as the Canada employment amount ($1,117 for 2013). See CRA publication T4058.

Based on the information you've supplied, your EI premiums withheld on $21,000 should have been about $395. The CPP withheld *should* have been $866. So:

15% of ($21,000 - $866 - $395 - $1,117) = 15% of $18,622 = $2,793

Your credits are the $4,700 withheld plus the $134 CPP overpayment.

$4,700 + $134 - $2,793 = $2,041 refund

Non-residents filing US returns, by the way, can't claim the standardized deduction at all and are limited in the itemized deductions they can claim. In either country, there are restrictions in the amounts a non-resident can claim.