How to File Taxes if You Left Canada During the Tax Year

The decision to leave Canada isn’t one to be taken lightly. Whether you’re a snowbird travelling to the United States during the winter months or working overseas in Europe on a temporary work permit, being out of the country has tax implications. You’ll need to figure out your residency status before you can determine your tax filing requirements.

To File or Not File a Tax Return

You’re required to file a tax return in the year you leave Canada if you have a tax balance owing or you’d like to receive a tax refund. In the tax year you leave, complete the general income tax and benefit package for your province or territory of residence on the day you emigrated from Canada. Your tax filing deadline is the same; you’ll have to file on or before April 30, or if you have a business in Canada, you have until June 15 to file your tax return.

You need to report your worldwide income earned on your tax return during the time you were a Canadian resident. Once you ceased to be a resident, you only need to pay income tax on income earned in Canada. For example, if you move to Australia and you’re receiving a Canadian pension, you’ll still need to pay income tax on that even if you’re not a resident since the income came from Canada.

Reporting Income in the Year You Leave

If you emigrate from Canada during the tax year, you must report any property holdings to the CRA if the fair market value of all the property you own is over $25,000 on the date you leave Canada. Please note this rule doesn’t apply for personal-use property with a value under $10,000, bank deposits, pension plans, Registered Retirement Savings Accounts and deferred profit sharing plans.

Regardless of whether the above rule applies to you, you are required to complete Form T1161, List of Properties by an Emigrant of Canada. Filing T1161 is a requirement even if you don’t need to file a tax return in the tax year you left Canada. Make sure you file the form before the April 30 tax filing deadline, otherwise you’ll face the same late filing penalties and interest as Canadian residents.

Canada Revenue Agency: Leaving Canada (Emigrants)

• Canada Revenue Agency: Individuals – Leaving or Entering Canada and Non-Residents
• Canada Revenue Agency: Dispositions of Property
• Canada Revenue Agency: Determining Your Residency Status
• Jason Heath, certified financial planner; Objective Financial Partners, Inc.; Toronto, Ontario