T1 help: emigrated from Canada in 2020

[bastiaandg]

Hi guys,

Last year I've moved back to my home country due to COVID. That means I would have been a non-resident for the second half of the year, but I was a resident in Canada for the first half.

According to the CRA site, I should fill out the income package for BC (where I was) and then provide the date I ceased to be a resident for tax purposes. I should not fill out the income package for non-residents, as that's for people who were a non-resident the entire year.
So far so good, just filling out the normal package (and calculating the credits etc).

However, on the first page, how do I fill that in? There is no Country box for mailing address (which is now a Dutch one) and under "Information about your residence" it says: "Enter your province or territory of residence on December 31, 2020:". Which would have been BC for tax purposes until July, but The Netherlands afterwards. Do I just fill in "Other" here and then indicate the date I ceased to be a resident below.
And what do I do with my mailing address? Do I use my last known Canadian one? I can't receive any mail there anymore and I've already changed my address in MyCRA to my Dutch one, but I can't enter any country here on the T1 form. So I can't enter my Dutch one?

Hope someone here can help me!

 

[canuck78]

Assume you have checked with CRA that you are a non-resident for tac purposes even though you moved. Just moving to another country does not mean you are a non-resident for tax purposes. Things like property, bank/investing accounts, immediate family, etc. are some of the reasons you may remain a tax resident. Establishing that you are actually a non-resident would be the first thing to do. CRA will determine this. Did you receive support like CERB from the government? Did you receive any money from the Canadian government after leaving?

Your current residential address will be in the Netherlands. If you were living in Canada until July you'll end up being a tax resident for the entire year since you were in Canada for over 6 months. Would suggest speaking with CRA although they are unfortunately unreliable but they will at least declare your tax residency status for 2020 and then for 2021.

 

[bastiaandg]

Thanks for your reply. I won't need to ask the CRA to declare my residency status as I already know I will be classified as an emigrant for tax purposes, Meaning I will be a tax resident until the day I left and will be a non-resident after as I had a job in the Netherlands then and am considered a resident here from the day I landed, according to the tax treaty with Canada.
In that case the 183 rule does not apply. I also don't have any property, family or other residential ties, except for one bank account and TFSA, but this is allowed for a non-resident. And since I don't have any Canadian income from after I left Canada, I won't need to do any taxes for the second part of the year, just the first part of the year (and credits will be pro rated).

This is also why, according to the CRA site, I must complete the normal T1 package, not the non-resident one, and indicate the day of departure there.

My problem is that I don't understand how to put my residential address in the Netherlands on the first page, as there is no box for country.
And what to put under 'province of residence on Dec 31st 2020'. It seems to me that it would always conflict if you have to put a Canadian province there, but can also check the box stating you ceased to be a resident at date X. But I can't find out if it's just that the second box will override the first date or not.

Maybe you're right and I should call the CRA, I was hoping someone here might know so I won't have to make the long distance call.

 

[Naheulbeuck]

If I remember correctly how we used to file those, it was the last address in Canada, since you've updated your address online (we use to file a change of address but now online does the same thing) and you inform that you've left Canada (on the section specific for that), they know that the information you provide is related to when you were in Canada.

You will have to determine though if filing as an emigrant is the best decision for you, there are tax implications and the thought is that you move back to your country permanently. If that is not the case, and you just moved during Covid and plan to come back next year for example, it may not make sense tax wise to file such (it could still be the best option but needs to be determined). It tends to invite more scrutiny.

Overall, it is probably best to call CRA to best determine your options and the implications as well as confirming the way you should file your tax return (it is not a simple regular tax return with no consequence). Depending on your assets at the time as well, it may be best to get a professional to file your tax return.

 

[bastiaandg]

Luckily, I don't have any assets for tax purposes, property or complicated investments or anything, so that makes it easier.
Basically I just had a bank account and nothing else at the time of departure.

I've contacted the CRA and for the mailing address I should put my current Dutch address and apparently I'm allowed to just make my own box for country.
Then for the residency question, I should put the province (BC) as the date of December 31st really means 'end of tax year', which in my case is the date of emigration, which I can declare further on the same page.
You could also use a Canadian address as mailing address and then put the country in the box about where you currently reside.
Apparently it doesn't really matter, it really is just a mailing address in case they need to contact you (in my case I can't use any Canadian mailing address anymore, so I just put my Dutch one).

Other than that, the agent confirmed I should be an emigrant for taxes from that date since I don't have any Canadian source income after that date, also no Covid support. And I have no residential ties to Canada, no assets like property to declare etc.
It just means that certain tax credits are prorated and some credits I can no longer claim (BC sales tax credit), but that's fairly straightforward.

For me this way is easier than remaining some sort of resident for tax purposes, mainly becuase Dutch taxes would then probably be even more complicated than they already are now.
I may go back to Canada again in the future, but that likely wouldn't be before 2023 and definitely not this year, so I would have at least 1 or 2 full years here with only Dutch income.
That means it is easier to just switch (tax) countries like this, especially since going back to Canada again should be easy for Canadian taxes. Just the same thing as when I landed last time . Unless my situation changes, of course, and I would have various assets.

After having confirmation on this information, I could do my taxes within a few hours.
Now to do my Dutch taxes, which are nearly 60 pages of 'Ifs', 'Provided thats', 'Unlesses' and 'If nots'...