Factual residents – Temporarily outside of Canada (2024)

This page offers information for Canadians who are temporarily outside of Canada.

Topics

  • Residency status
    Residential ties andsituations where you are considered a factual resident
  • Your tax obligations
    Reporting income, claiming deductions, eligibility for certain credits, and what happens to your residency status if your situation changes
  • Entitlements to benefits and credits
    Canada childbenefit, universal child care benefit, and foreign tax credit

Residency status

You are a factual resident of Canada for income tax purposes if you keep significant residential ties in Canada while living or travelling outside the country.

The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes.

Notes

If you have established ties in a country that Canada has a tax treaty with andare considered to be a resident of that country, but you are otherwisea factual resident ofCanada (meaning you maintain significant residential ties with Canada), you may be considered a deemed non-resident of Canada for income tax purposes.

You become a deemed non-resident of Canada when your ties with the other country become such that, under the tax treatythat Canada has with the other country, you would be considered a resident of that other country. As a deemed non-resident, the same rules apply to you as a non-resident of Canada.

Situations where you could be considered a factual resident

You may be considered a factual resident of Canada if you are:

  • working temporarily outside Canada
  • teaching or attending school in another country
  • commuting (going back and forth daily or weekly) from Canada to your place of work in the United States (U.S.)
  • vacationing outside Canada
  • spending part of the year in the U.S., for example, for health reasons or on vacation

Note

If you are a missionary in another country and you meet certain requirements, you can choose to be considered a factual resident even if you do not keep residential ties in Canada. To make this choice, you must satisfy all of the following requirements:

  • be a Canadian citizen or a permanent resident of Canada
  • be in the service of a religious organization that has its national ministry office in Canada
  • be sent out of Canada for5 years or less
  • file an income tax and benefit return and report all income you receive from sources inside and outside Canada for each year you are absent from Canada

In this case, contactthe CRAfor more information.

Your tax obligations

As a factual resident, your income is taxed as if you never left Canada. As such, you will continue to:

  • report all income you receive from sources inside and outside Canada for the year, and claim all deductions that apply to you
  • claim all federal and provincial or territorial non-refundable tax credits that apply to you
  • pay federal tax and provincial or territorial tax for the province or territory where you keep residential ties in Canada
  • claim any federal andprovincial or territorial refundable tax credits that apply to you
  • be eligible to apply for the GST/HST credit (goods and services tax/harmonized sales tax) and Canada child benefit

Example

You are an industrial designer. Your employer has sent you to work in Hong Kong for 18months. Your spouse and children stay at the family home in Saskatchewan during your absence. The CRA considers you to be a factual resident of Canada for income tax purposes because of your residential ties in Canada.

When you file your Canadian return, you will report your income from sources inside and outside Canada, and claim deductions that apply to you. You will pay federal tax and Saskatchewan provincial tax. You can reduce both federal and provincial taxes by claiming federal and provincial non-refundable tax credits that apply to you.

Which tax package should you use?

For each tax year that you're a factual resident of Canada for income tax purposes, use the Income Tax Package for the province or territory where you keep residential ties. Generally, this is the province or territory where you lived before you left Canada.

Filing due date

Generally, your income tax and benefit return must be filed on or before:

  • April 30 of the year after the tax year
  • June15 of the year after the tax yearif you or your spouse or common-law partner carried on a business in Canada (other than a business whose expenditures are mainly in connection with a tax shelter)

Note

A balance of tax owing must be paid on or before April 30 of the year after the tax year, regardless of the due date of the tax return.

What happens to your residency status if your situation changes?

If your circ*mstances change, you may no longer be considered a factual resident of Canada for income tax purposes. This could happen, for example,if you:

  • decide to stay permanently in the country where you are working
  • sell your house in Canada
  • move your spouse or common-law partner and dependent children with you to your new country

Generally, you are considered to be an emigrant in the year that you sever your residential ties with Canada. For all following years, you will be considered a non-resident of Canada.

If you think your residency status for income tax purposes may have changed, see Determining your residency status for more information.

Entitlements to benefits and credits

Canada childbenefit

If you are eligible to receive the Canada childbenefit (CCB), you will continue to receive it and any related provincial or territorial benefits that you are eligible forduring your absence from Canada. However, you will have to file a return each year so that the CRA can calculate your CCB.

If you have a spouse or common-law partner, they will also have to file a return each year. If your spouse or common-law partner is a non-resident of Canada, they will have to file Form CTB9, Income of Non-Resident Spouse or Common-Law Partner for the Canada child benefit.

If you have a child while outside Canada, you can apply for the CCB by sendingthe CRAa completed FormRC66, Canada Child Benefits Application (includes federal, provincial, and territorial programs). For more information, see BookletT4114, Canada Child Benefit and related provincial and territorial programs.

Foreign tax credit

You may be able to claim a foreign tax credit (FTC) on your Canadian income tax return if you paid tax on income or profits to a foreign country on income from that country that you report on your Canadian income tax return.

The FTC may reduce the federal and provincial/territorial tax you have to pay on the foreign income.

In most cases, the FTC you can claim for each foreign country is the lower of the following two amounts:

  • the foreign income tax you paid
  • the tax otherwise due in Canada on your net income from that country

Note

You generally cannot claim a foreign tax credit for taxes that you paid to a foreign country on income you earned in Canada.

To claim this credit, complete Form T2209, Federal Foreign Tax Credits, and attach it to your return.

Formore informationon how to calculate the foreign tax credit, see line 40500or Income Tax FolioS5-F2-C1,Foreign Tax Credit.

Forms and publications

  • Income Tax Folio S5-F2-C1, Foreign Tax Credit
  • Income Tax Folio S5-F1-C1, Determining an Individual's Residence Status
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Factual residents – Temporarily outside of Canada (2024)

FAQs

What is factual residents temporarily outside of Canada? ›

Your residency status if you left Canada

You may be considered a factual resident of Canada if you maintain residential ties with Canada and 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.

What is a factual resident of Canada for tax purposes? ›

Residency status

You are a factual resident of Canada for income tax purposes if you keep significant residential ties in Canada while living or travelling outside the country. The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes.

What is a factual resident of Canada Turbotax? ›

Types of Residency Status

Individuals who leave Canada temporarily for purposes such as work, vacation, or to attend school, are often considered factual residents of Canada. Immigrants to Canada who have established significant residential ties with Canada may be considered residents.

What is the tie breaker rule between US and Canada? ›

The tie-breaker rule in the income tax treaty between Canada and the United States allows a taxpayer treated as a tax resident of both the United States and Canada under their domestic tax rules to only be treated as a resident of the country to which they have stronger ties to.

How long can you stay outside of Canada without losing benefits? ›

Your provincial or territorial health plan will cover only part, if any, of medical expenses outside Canada and will not pay up front. Furthermore, it will become invalid if you live elsewhere beyond a certain length of time – generally six to eight months, depending on your province or territory.

How many days can you be out of Canada in a year? ›

How long are you welcome to visit another country? A Canadian can stay for up to 182 days per calendar year (without paying U.S. income tax). Visitors can stay for maximum of six months in each 12 months (not a calendar year, but counting backwards 12 months from your date of entry).

What is considered temporary resident status in Canada? ›

A foreign national has temporary resident status when they have been found to meet the requirements of the legislation to enter and/or remain in Canada as a visitor, student, worker or temporary resident permit holder. Only foreign nationals physically in Canada hold temporary resident status.

Can you have dual residency in USA and Canada? ›

As for the "dual citizenship" aspect of this inquiry, there is no separate application procedure by which one must apply for it. If you're already a citizen of either the U.S. or Canada and become a citizen of the other without taking active steps to renounce your original citizenship, you are a dual citizen.

What is the 183 day rule in Canada? ›

If you sojourned in Canada for 183 days or more (the 183-day rule) in the tax year, do not have significant residential ties with Canada, and are not considered a resident of another country under the terms of a tax treaty between Canada and that country, see Deemed residents of Canada for the rules that apply to you.

Why is my bank asking for tax residency Canada? ›

CRS requires financial institutions to identify clients who are residents of foreign countries other than the United States. CIBC identifies such clients by obtaining client attestation of foreign tax residency as part of the account open process. CIBC reports client information and account details to the CRA.

What form do I need to declare non-resident Canada? ›

Pros and Cons of Form NR73

If you are leaving Canada, you have the option of filling out the Determination of Residency Status form (Form NR73) with the CRA. Pros: By completing this form, the CRA can provide you with a notice of determination on your residency status.

Can I use TurboTax for non-resident Canada? ›

Yes, you can use TurboTax to prepare your tax return. However, as a non-resident, you will not be able to use NETFILE to file your return online. Instead, you'll need to printout your return and mail or fax it to the Canada Revenue Agency (CRA).

Does going to Canada count as leaving the US? ›

The authorisation permits you to stay in the United States for up to 90 days. If you leave the United States to visit Mexico or Canada, your time there will count toward your 90-day limit.

What are the rules for returning to Canada from the US? ›

For all travellers entering Canada by air, land or marine mode:
  • Proof of COVID-19 vaccination is not required.
  • Pre-board testing is not required.
  • COVID-19 pre-entry and arrival tests are not required.
  • Quarantine after you enter Canada is not required.
  • Using ArriveCAN is not required, but.
May 10, 2023

How many times can a Canadian enter the US? ›

Typically, Canadians can enjoy a visit to the United States for a maximum of six months per trip. During this time, they can partake in several visitor-approved activities, such as tourism, vacationing, visiting friends or relatives, medical treatment, and attending social events, among others.

What happens if you are out of Canada for more than 6 months? ›

In actual fact, you can be absent from Canada as long as you want. The Canadian government recognizes that citizens may travel extensively, work or study abroad. You will always maintain your Canadian citizenship. What absentia may affect is your Canadian health care coverage and income tax.

How long can a U.S. citizen live in Canada? ›

Most visitors can stay for up to 6 months in Canada. If you're allowed to enter Canada, the border services officer may allow you to stay for less or more than 6 months. If so, they'll put the date you need to leave by in your passport.

How long can seniors stay out of Canada? ›

If you do not qualify to receive your Old Age Security pension while outside of Canada, your payments will stop if you are out of the country for more than 6 months after the month you left. You cannot collect the Guaranteed Income Supplement if you are outside Canada for more than 6 months.

Can I stay in Canada for 6 months then leave and come back? ›

You can leave and come back to Canada multiple times as long as your visitor visa has not expired.

Can a US citizen stay out of the country for more than 6 months? ›

If you plan to stay outside of the United States for more than one year but less than two years, you will need a re-entry permit for readmission. You must be physically present in the United States when you file the Form I-131 to apply for the permit.

Can I keep my Canadian bank account if I move abroad? ›

Note: You can keep a Canadian bank account and it can be really useful while living in the U.S. or overseas to have one! But change your address on this account to your new non-Canadian address. Do not change it to a family member's address in Canada, even though it may seem convenient to do so.

What is the difference between temporary resident permit and temporary resident visa in Canada? ›

A Temporary Resident Permit (TRP) is a travel document allowing people who are inadmissible to Canadato visit the country on a short-term basis. A Temporary Resident Visa (TRV) is an official document placed in your passport proving you have met the requirements to enter Canada as a temporary resident.

Who is considered a temporary resident? ›

A temporary resident is a foreign national granted the right to stay in a country for a certain length of time (e.g. with a visa or residency permit), without full citizenship. This may be for study, business, or other reasons.

How long does temporary residency last in Canada? ›

Validity of a temporary resident permit (TRP)

Under section 63 of the Immigration and Refugee Protection Regulations (IRPR), an initial or subsequent temporary resident permit (TRP) may be valid from 1 day to 3 years.

Do US citizens living in Canada pay taxes? ›

Taxes: As a US expat in Canada, you'll need to file a US tax return each year and a Canadian tax return if you have Canadian income. However, the US and Canada have a tax treaty to avoid double taxation.

Can you be a Canadian citizen and a U.S. citizen at the same time? ›

Every country decides whom it considers to be a citizen. If more than one country recognizes you as a citizen, you have dual citizenship. You don't apply for dual citizenship, and there is no related certificate. Canadians are allowed to take foreign citizenship while keeping their Canadian citizenship.

Can a U.S. citizen be a dual citizen of Canada? ›

Dual or multiple citizenship is legal in Canada. However, it may not be legal in the other country or countries where you hold citizenship.

Do Canadian banks report to the IRS? ›

Since 2014, Canadian financial institutions are required under Canadian law to identify and report information to the CRA on reportable financial accounts held in Canada by US Persons. The CRA then exchanges this information with the IRS.

Can the IRS seize a Canadian bank account? ›

The IRS can issue a levy to any bank within the US. If you're an account holder of a foreign bank that has a branch in the US, the IRS can easily issue a levy notice to the US office and empty your account overseas.

Can you keep a bank account in Canada as a non resident? ›

You may be able to open a bank account with the proper identification in Canada even if: you're not a Canadian citizen. you live in another country.

Do I need to declare non residency in Canada? ›

Generally, the non-resident withholding tax is considered your final tax obligation to Canada on that income. However, you can choose to report this income on a Canadian tax return for 2022 by electing under section 216.1 of the Income Tax Act (see Find out which tax package is for you).

What documents do US Residents need to enter Canada? ›

Entry into Canada: Canadian law requires that all persons entering Canada carry proof of citizenship and identity. A valid U.S. passport, passport card, or NEXUS card satisfies these requirements for U.S. citizens. Children under 16 only need proof of U.S. citizenship.

What do I need to fill out before entering Canada? ›

Pre-arrival: Complete a Declaration Card

The Declaration Card tells us what we need to know about you, your travels and what you are bringing into the country. Instructions on how to complete the card are attached to help you. Please note that everyone arriving in Canada must complete a Declaration Card.

What is a factual resident of Canada? ›

You are a factual resident of Canada for income tax purposes if you keep significant residential ties in Canada while living or travelling outside the country. The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes.

What is the difference between a non-resident and a resident of Canada? ›

You may be considered a non-resident of Canada if you did not have significant residential ties with Canada and: You lived outside Canada throughout the year (except if you were a deemed resident of Canada) You stayed in Canada for less than 183 days in the tax year.

How long can you stay in Canada without paying taxes? ›

We have this 183 days rule that simply means if you stay in Canada for 183 days or more in one tax year, you're deemed a resident and have to pay taxes.

Can I leave Canada and return? ›

If you have a single-entry temporary resident visa, you will generally need a new single-entry visa to come back to Canada. You can request to return to Canada on your original single-entry temporary resident visa, if: you will only visit the U.S. or St.

How to leave the US and go to Canada? ›

If you are coming to Canada with a valid US passport you do not need a Canadian visa or an electronic travel visa (eTA). You will need a visitor visa to enter Canada if you are not a Canadian citizen or permanent resident, or from a visa-exempt country, such as the US.

How long do I have to wait before I can come back to the US after a 6 month stay using a tourist visa? ›

If their presence was more than 180 days but less than a year, they will have to wait 3 years to re-enter the country on a tourist visa. Having been present illegally for more than a year, they will have to wait 10 years to re-enter the country on a tourist visa.

Can I bring back groceries to Canada from the US? ›

Travellers coming into Canada can carry food with them for their own personal use, provided the food is imported within the specified personal exemption limits of the Safe Food for Canadian Regulations and there are no restrictions in place under other federal legislation, such as the Health of Animals Act or the Plant ...

How many times can I visit Canada in one year? ›

A single entry visa allows foreign nationals to enter Canada for one-time only. A multiple entry visa allows holders to enter and leave Canada as often as they want as long as the visa is valid.

How long can a Canadian citizen stay out of Canada? ›

How long are you welcome to visit another country? A Canadian can stay for up to 182 days per calendar year (without paying U.S. income tax).

Can I buy a house in USA as a Canadian? ›

Yes. Canadians can own real property in the USA. In fact, anyone may own property in the United States, regardless of their citizenship. It is important to note that if you buy property in the U.S., you still must abide by laws about the length of your stay in America.

What happens if a Canadian overstay in the USA? ›

They can be barred from returning to the U.S. for three years, and those who overstay for longer than a year face a 10-year ban. For more information, visit the U.S. Customs and Border Protection website. A criminal record will prevent you from entering the USA or obtaining your USA immigration status.

How many times a year can I visit USA? ›

There is no limit on the number of times you may enter the U.S. under either ESTA of a visa.

Is temporary resident considered a resident in Canada? ›

Temporary residency is an immigration status in Canada given by an immigration officer to a foreign national that permits the foreign national to stay in Canada for a limited period of time. When a foreign national has been granted temporary residency status, they become a temporary resident in Canada.

Can Canadian temporary residents travel to US? ›

Canadians require nonimmigrant visas for temporary travel to the United States for these purposes: Foreign government officials (A); officials and employees of international organizations (G); and NATO officials, representatives, and employees assigned to the United States (NATO) Treaty traders (E-1)

Can I live outside of Canada as a permanent resident? ›

When you become a Permanent Resident, there are some circ*mstances where you can live overseas and maintain your Permanent Resident status in Canada. To maintain your status as a permanent resident, you must live in Canada for at least 2 years - 730 days - within a 5 year period.

How long can an immigrant stay outside Canada? ›

Immigration, Refugees and Citizenship Canada (IRCC) will look back at your time in Canada over the previous 5 years. This means that you can spend a total of up to 3 years outside of Canada during a 5-year period.

What is proof of temporary residence in Canada? ›

a letter of invitation or an explanation for the purpose of the trip. evidence of ties to the applicant's home country. proof of current immigration status in the country of application.

Can a temporary resident leave and return to Canada? ›

Yes, you can come back to Canada, if you have a multiple-entry temporary resident visa and it has not expired.

Can I enter Canada with temporary green card? ›

A Temporary Resident Permit can enable a US resident with a criminal record to go to Canada for a short amount of time (can be valid for multiple entries up to three years), but requires a specific reason to visit Canada such as a business trip to Vancouver or family in Toronto.

Can I leave Canada after 6 months and come back? ›

You can leave and come back to Canada multiple times as long as your visitor visa has not expired.

Can you be a resident of Canada and another country? ›

Individuals can be residents for tax purposes in more than one country at the same time. In such cases, where there is a tax treaty between Canada and the other country, individuals will be considered residents where they have the strongest social and economic ties.

Can you have permanent residency in two countries? ›

FAQ Transcript: The question here is can I have permanent residency in more than one country? Yes. You can.

How long can a permanent resident stay out of the country? ›

U.S. immigration law assumes that a person admitted to the United States as an immigrant will live in the United States permanently. Remaining outside the United States for more than one year may result in a loss of Lawful Permanent Resident status.

How long can I stay in Canada as a US green card holder? ›

U.S. law holds that a resident alien (Green Card holder) MAY NOT stay outside the U.S. for the period of one year without losing his/her legal permanent resident status.

What to do if you are out of status in Canada? ›

A visitor who is out of status may apply to restore their status as a temporary resident. Temporary residents who are eligible to apply in Canada for a work or study permit [R199 or R215] may do so when restoring their temporary resident status.

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