To determine whether you’re a resident or non-resident, use the Canada Revenue Agency’s criteria to assess your ties with Canada. Because determinations are made on a case-by-case basis, there are no universally applicable rules to determine your tax residency status in Canada. However, your country of residence will usually be the one that you have the closest ties with.

Determine if you have residential ties with Canada

The most important thing to consider when determining your residency status in Canada for income tax purposes is whether or not you maintain or establish significant residential ties with Canada.

Significant residential ties to Canada include:

• a home in Canada
• a spouse or common-law partner in Canada
• dependants in Canada

Secondary residential ties that may be relevant include:

• personal property in Canada, such as a car or furniture
• social ties in Canada, such as memberships in Canadian recreational or religious organizations
• economic ties in Canada, such as Canadian bank accounts or credit cards
• a Canadian driver’s licence
• a Canadian passport
• health insurance with a Canadian province or territory

The information above is general in nature. For more information on residential ties, see Income Tax Folio S5-F1-C1, Determining an Individual’s Residence Status.

Step 2: Determine your residency status and its tax implications

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
• attending school in another country 

You may be considered an emigrant if you left Canada and established a permanent home in another country and you severed your residential ties with Canada ceasing to be a resident of Canada in the tax year. 

You may be considered a deemed non-resident of Canada if you established residential ties in a country that Canada has a tax treaty with and you are considered a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada. The same rules apply to deemed non-residents as non-residents of Canada.

You are usually considered a factual resident or a deemed resident of Canada if you left Canada and you are a government employee outside Canada, which includes members of the Canadian Forces posted abroad. For more information, see Government employees outside Canada.

Your residency status if you entered Canada

You may be considered an immigrant if you left another country to settle in Canada and established significant residential ties with Canada and became a resident of Canada in the tax year.

You may be considered a deemed non-resident of Canada if you have residential ties in a country that Canada has a tax treaty with and you are considered to be a resident of that country, but you are also a factual resident of Canada because you established significant residential ties with Canada. The same rules apply to deemed non-residents as non-residents of Canada.

You may be considered a deemed resident of Canada if you have not established significant residential ties with Canada to be considered a factual resident, but you stayed in Canada for 183 or more days in the year.

Your residency status if you normally, customarily, or routinely live in another country

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

If you want the CRA’s opinion on your residency status, complete Form NR74, Determination of Residency Status (Entering Canada), or Form NR73, Determination of Residency Status (Leaving Canada), whichever applies.

Contact Abdullah CPA for specialist advice.