Canadian Tax Returns For Different Tax Residencies

When Canadians move abroad or spend extended time outside the country, their tax obligations don't automatically end. Depending on their ties to Canada and where they live, they may fall into one of several residency categories—factual resident, deemed non-resident, or emigrant—each with different tax filing requirements.

You are a factual resident if you live abroad but maintain significant residential ties to Canada—such as a home, a spouse or dependents in Canada, provincial health care, or a Canadian driver's license.

Tax Obligations:

• File a T1 General tax return as a Canadian resident.
   
• Report worldwide income.
   
• Claim applicable foreign tax credits (Form T2209) to avoid double taxation.
   
• Disclose foreign property over CAD $100,000 using Form T1135 (Foreign Income Verification Statement).
   

You're a deemed non-resident if you're a factual resident of Canada but are considered a resident of another country under a tax treaty (e.g., with the U.S. or Mexico).

Tax Obligations:

• File a Section 217 or non-resident return (Form 5013-R) depending on income type.
   
• Pay tax only on Canadian-source income (such as rent, pensions, or dividends).
   
• May need to file Form NR73 (Determination of Residency Status) to clarify your status.
   

You become an emigrant when you sever most or all residential ties with Canada and establish permanent residency in another country.

Tax Obligations in Year of Departure:

• File a T1 General and indicate the date of departure from Canada.
   
• Report worldwide income up to the departure date.
   
• May be subject to departure tax on certain assets (capital gains deemed disposition).
   
• Must file Form T1161 (List of Properties at Departure) and Form T1243/T1244 if departure tax applies.
   

Residency for tax purposes is not always the same as immigration status or physical presence. It's critical to determine the correct status to avoid penalties or missed obligations.