Canadian residents going down south

If you are a Canadian who spends part of the year in the United States (U.S.) for health reasons or on vacation, for example, and you still maintain residential ties in Canada, certain income tax requirements may affect you, unless:

• You are a U.S. citizen
• You have been granted permanent resident status by the United States Citizenship and Immigration Services (USCIS) ("green card")
• You have residential ties to a country other than the U.S. and Canada

How Canadian income tax laws apply

If you spend part of the year in the U.S. for health reasons or on vacation, for example, and you maintain residential ties in Canada, the CRA usually considers you to be a factual resident of Canada.

As a factual resident, the CRA taxes your income as if you never left Canada and so you should continue to:

• report all income that you receive from sources inside and outside Canada for the year
• claim all income deductions that apply to you
• claim all federal and provincial or territorial non-refundable tax credits that apply to you
• pay federal and provincial or territorial tax for the province or territory where you keep residential ties in Canada
• claim all federal and provincial or territorial refundable tax credits that apply to you
• apply for the goods and services tax/harmonized sales tax (GST/HST) credit and any related provincial or territorial credits

Completing your Canadian income tax return

As a factual resident, you can find most of the information you need to complete your return in the income tax package for your province or territory of residence. However, this section includes more information that will help you complete your return.

If you are a factual resident, complete and attach Form T1248, Schedule D, Information about your Residency Status, to your return.

Identification and other information

Complete this section on page 1 of your return; however, do not enter a date of entry or departure of Canada. These fields are for immigrants and emigrants only. If you enter a date of entry or departure in these fields, the CRA may reduce your claim for federal and provincial or territorial non-refundable tax credits.

Under "Your province or territory of residence on December 31, 2023," enter the name of the province or territory where you maintained residential ties.

Foreign property

Special rules may apply if you were in any of the following situations:

• You owned or held specified foreign property with a total cost of more than CAD $100,000 at any time in 2023
• You loaned or transferred funds or property to a non-resident trust in 2023 or a previous year
• You received funds or property from, or were indebted to, a non-resident trust you were a beneficiary of in 2023

For more information, see Form T1135, Foreign Income Verification Statement, Form T1141, Information Return in Respect of Contributions to Non-Resident Trusts, Arrangements or Entities, or Form T1142, Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust.

Income

As a factual resident, you will continue to pay tax on your world income (income from all sources both inside and outside Canada) as though you had lived in Canada for the whole year. Report all amounts in Canadian dollars.

NR4 or NR4(OAS) information slip

An NR4 or NR4(OAS) information slip shows income from Canada, such as old age security (OAS) pension, Canada Pension Plan (CPP) benefits and Quebec Pension Plan (QPP) benefits.

As a factual resident, you should not receive slips that begin with "NR" because they apply only to non-residents.

If you receive this type of slip, report the income on your Canadian return. If the slip also shows that tax was withheld on the income, include it on line 43700 of your return.

U.S. lottery or gambling winnings

If you received US lottery or gambling winnings, do not report this income on your Canadian income tax return as this income is not taxable in Canada. Additionally, you cannot claim a credit for any taxes withheld on these winnings.

Rental income from property in the U.S.

If you had rental income from property in the US, keep your records to support your income and expense claims. For more information, see Guide T4036, Rental Income.

Federal tax and credits

To calculate your federal tax and any credits that apply to you, use a federal income tax and benefit return.

Federal non-refundable tax credits

Medical expenses paid in the U.S.

You can claim eligible expenses that were paid for you, your spouse or common-law partner and certain other dependents. You can claim eligible medical expenses paid in any 12-month period ending in the year if they were never claimed in any other year.

For more information, see lines 33099 and 33199 or Income Tax Folio S1-F1-C1, Medical Expense Tax Credit.

Paying premiums to private health-services plans

Generally, you can claim the premiums paid to a private health-services plan as a medical expense on your return.

For more information, see line 33099 or Income Tax Folio S1-F1-C1, Medical Expense Tax Credit.

Donations to a U.S. charity

If you are including U.S. income on your Canadian return, you can claim a credit for donations to U.S. charities that would be allowed on a U.S. return. The total donations to U.S. charities that you can claim cannot be more than 75% of the net U.S. income that you report on your Canadian return.

Federal foreign tax credit

If you paid U.S. tax on U.S. income that you are reporting on your Canadian return, you may be able to claim a federal foreign tax credit to reduce your Canadian federal tax payable. For information on how to claim the foreign tax credit, see line 40500, Form T2209, Federal Foreign Tax Credits, or Income Tax Folio S5-F2-C1, Foreign Tax Credit.

Provincial or territorial tax

You must pay tax to the province or territory where you maintained residential ties.

Provincial or territorial non-refundable tax credits

The province or territory where you maintained residential ties also offers non-refundable tax credits. For more information, see the income tax package for that province or territory.

Refund or balance owing

Provincial or territorial tax credits

For information about the credits available in the province or territory where you maintained residential ties and how to claim them, see the income tax package for that province or territory.

Provincial or territorial health-care coverage

Before you go to the U.S., you should check that your provincial or territorial health-care coverage will continue while you are outside of Canada. You may want to get supplementary health-care coverage.

For more information, contact the ministry responsible for health care in your province or territory. See your provincial or territorial governments webpage for the address and telephone number of your provincial or territorial Ministry of Health office.

How U.S. tax laws apply

As a Canadian resident who spends part of the year in the U.S., it is important for you to determine how U.S. tax laws apply to you. You are considered either a resident alien or a non-resident alien of the U.S. for U.S. tax purposes.

Generally, resident aliens are taxed in the U.S. on income from all sources inside and outside the U.S., and non-resident aliens are taxed in the U.S. only on income from U.S. sources. Therefore, it is important for you to determine if you are a resident alien or a non-resident alien.

For more information on resident and non-resident aliens and if you have to file a U.S. tax return, see International Taxpayers. You will also find information on the tax implications of receiving U.S. gambling or lottery winnings, owning U.S. real property and the transfer of a deceased person's taxable estate.

For more information about U.S. tax laws, visit Let Us Help You.

For more information

If you need more information:

• Contact the CRA about international and non-resident enquiries
• Call the CRA's Tax Information Phone Service (TIPS) if you are calling from the U.S.

Government partners

• Canada Border Services Agency
• Bon voyage, But... Essential information for Canadians travelling outside Canada
• Travel Health (Public Health Agency of Canada)