What’s Your Tax Issue? Province of Residence

The Tax Issue:

I recently accepted a job position with my current employer which will transfer  me from Toronto to Montreal. Now I love Montreal however I hate Quebec income tax and I was looking for a way to physically work in Montreal (Quebec) however keep paying taxes as a resident of Ontario.  Any advice would help.

The Answer:

Welcome to the club! We Montreal-lovers and Quebec tax-haters have been struggling with this question for years. Some of have moved away never to return. Unfortunately, loving Montreal comes with a price (and I don’t mean Carey :-)).

Individuals are subject to Canadian income taxes in the province where they reside on December 31 of any given year. Residency for income tax purposes is not a choice one makes by ticking a box on a tax return. It is a question of fact, based on your residential ties.

The most important residential ties are where your home (owned or rented) is, and where your spouse or common-law partner or dependants reside. Other ties that may be relevant include social ties, bank accounts, driver’s licence and medicare.

So, unless you’re move is temporary or you plan to commute from Toronto each day, you’re pretty much going to have to set up residential ties in Montreal and pay Quebec taxes.

If you really feel very strongly about staying out of the Quebec tax system (as a resident of Ontario you’d be saving less than 2 per cent in income tax if you’re at the top marginal bracket), you could make your home in nearby Cornwall, Ontario, which is only about a 45 minute commute from Montreal (on a Sunday Morning :-)).

3 thoughts on “What’s Your Tax Issue? Province of Residence

  1. Pingback: Moving Expenses – Stay In Canada « The Tax Issue

  2. What if you have a residence in both Ontario and Quebec? I thought the primary residential tie could still be Ontario even if you are working in Quebec

  3. Pingback: US Residecy for Canadians « The Tax Issue

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