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Leaving Canada is not the same as ceasing to be resident.
The CRA decides your residency on ties rather than the date you flew out, and the US decides yours on a weighted count across the current and two preceding calendar years. It is entirely possible to be treated as resident in both at once, which is where the expensive mistakes start.
Two countries, two different tests
Answering one of these correctly tells you nothing about the other, which is how people end up resident in both at once.
How the US decides
How Canada decides
What this means in practice
The two systems ask different questions, and answering one correctly tells you nothing about the other.
Ties, not dates
Canada looks at where your life is based: a home available to you, a spouse, dependants, memberships and accounts. People who left years ago are sometimes still filing, and people who thought they had left cleanly find out otherwise.
The US applies a formula
Substantial presence uses the current calendar year and the two preceding calendar years, weighted, rather than a simple count of current year days. It catches people who commute, and people who split time without tracking it.
A deemed disposition may apply
Ceasing Canadian residency can trigger a deemed sale of certain assets on the day you leave, taxed as though you sold them. Planning before departure changes that number. Planning afterwards generally cannot.
The CRA weighs where your life is genuinely centred. Establishing that position deliberately, at the time, is far cheaper than arguing it four years later.
Where it usually goes wrong
Three patterns account for most of the corrections we handle on this side.
Assuming the move ended it
A house kept for family, a spouse who stayed behind for a school year, or a car and bank account left in place can be enough for the CRA to treat you as never having left. That position is far cheaper to establish deliberately than to argue about later.
Ignoring the RRSP
A registered plan does not disappear because you moved. It has US reporting attached and its withdrawals are taxed differently depending on where you are resident at the time, which makes the sequence of withdrawals worth planning.
Selling Canadian property unadvised
Disposing of Canadian real estate as a non resident brings a clearance certificate process and withholding on the sale price rather than the gain. Starting that process after closing is the version that ties up your money for months.
The forms that usually apply
Which of these applies turns on your residency position, so that gets settled first.
United States
- 1040 if resident for tax purposes
- 1040NR if not
- 8833 treaty based return positions
- 8840 closer connection statement
- FinCEN 114 and 8938 for Canadian accounts
- W-9 if you are a US person, W-8BEN only where you are not, and NR301 or equivalent for Canadian treaty withholding
Canada
- T1 final or part year return
- T1161 list of properties on departure
- T1243 deemed disposition of property
- NR73 determination of residency status
- Section 217 election on certain income
- NR4 withholding on Canadian payments
Ongoing
- RRSP reporting while non resident
- Section 216 for Canadian rental income
- Section 116 on selling Canadian property
- Pension and CPP coordination
- Cross border investment account rules
- Provincial residency wind down
Questions Canadians in the US ask
This is general guidance rather than advice on your situation.
How do I know whether the CRA still considers me resident?
It is a weighing exercise rather than a checklist, based on where your life is genuinely centred. Primary ties carry the most weight, meaning a home available to you, a spouse or partner, and dependants. Secondary ties such as accounts, licences and memberships matter when the primary ones are unclear. It is worth documenting the position at the time you leave.
Can I be resident in both countries?
Under each country's domestic rules, yes. That is exactly what the treaty tie breaker exists to resolve, and it works through a sequence of tests to land you in one country for treaty purposes. Claiming it requires filing a position rather than simply asserting it.
What is departure tax and will I pay it?
On ceasing residency, Canada treats certain assets as sold at market value on that date and taxes the resulting gain. Some assets are excluded, including Canadian real property and registered plans, and it is possible to elect to defer the payment with security. Whether it bites depends entirely on what you hold.
I am on a work visa and may return. Does that change things?
It often does, because intention and the likelihood of return feed into the residency analysis on both sides. A secondment of a fixed length is a different position from an open ended move, and the treaty may help you keep it simple.
Other situations we handle
If more than one applies, they are handled together.
Settle your residency position before it settles itself.
Twenty minutes, no charge, and a written fixed quote afterwards. Evening slots on both time zones.
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