Returningresident Posted April 26 Report Share Posted April 26 Hi everyone Until mid 2022, my family and I had been living abroad for 9 years (and filing taxes annually as non residents). This year, I am trying to figure out how to report my worldwide income (that was taxes in a tax-treaty country) and my Canadian income (that I earned after returning to Canada). If I report my worldwide income in line 10400 then I get taxed again on the income. However, I am not sure if it's appropriate to report this income in T1135, as this wasn't business income (just a standard salary). Would love some help! Returning resident Quote Link to comment Share on other sites More sharing options...
clw Posted April 26 Report Share Posted April 26 In a transition year between two countries, CRA allows only declaring Canadian Income, not worldwide. Similarly, income from the other country is only declared in that country. Quote Link to comment Share on other sites More sharing options...
Returningresident Posted April 27 Author Report Share Posted April 27 Thanks @clw - do you have any reference or link to information for this? Would love to just be able to have something from CRA with this detail. Quote Link to comment Share on other sites More sharing options...
clw Posted April 27 Report Share Posted April 27 This is the CRA ‘International Tax and non-resident’ phone number: 1-800-959-8281. My understanding is that it is a ‘pragmatic rule’, since calculating foreign tax credits in a partial year is not advantageous, and can be penalizing to the taxpayer. Officially, you should be paying tax on your worldwide income for the portion of the year you were resident in Canada, and taxes as a non-resident for the other portion of the year. This usually results in substantial overtaxation, hence the ‘pragmatic rule’. Quote Link to comment Share on other sites More sharing options...
Geo123 Posted April 27 Report Share Posted April 27 Hello Returningresident, Returning resident If our understanding is correct, you were a non-resident for part of the 2022 taxation year and subsequently return to Canada (immigrated) at some time during 2022. Please note, that as a non-resident of Canada you are only taxed on your Canadian source income during which time if your Canadian source income comprises of 90% or more of your worldwide income then you are also entitled to 100% of your non-refundable tax credits for this period. To complete your return, you need to indicate your immigration date (the date you reestablished residential ties to Canada) and report your worldwide income your earned after this date. Your non-refundable tax credit will prorated according to the number of days you resident in Canada over 365 days for this period. For Form T1135 it must be filed by a resident of Canada at the moment you’ve acquired foreign property (including foreign securities held with a Canadian broker) at the moment the cost was $CAD 100K or more (i.e. even before April 30th). Link (CRA Non-resident guide)https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/non-residents/5013-g/income-tax-benefit-guide-non-residents-deemed-residents-canada.html Quote Link to comment Share on other sites More sharing options...
Returningresident Posted April 28 Author Report Share Posted April 28 Thanks so much for this advice! Quote Link to comment Share on other sites More sharing options...
Geo123 Posted April 28 Report Share Posted April 28 Hello Returningresident, You are welcome. Quote Link to comment Share on other sites More sharing options...
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