Non-Resident Tax

What is a Non-Resident Tax?

A non-resident is an individual who belongs to one region or jurisdiction but has interests in another area. In the part where they do not primarily live, they will be classified by government authorities as a non-resident. A non-resident tax is also applicable for someone who has worked in a state where they are a non-resident for more than 184 days. However, the classification of non-residency status depends on the terms set by each region. This classification depends on where the person resides and does not focus on citizenship. 

Things you should know about Non-Resident Tax

Non-resident rental income tax is applicable for a resident of Canada but get a rental income from a Canadian property. The tax consequences of earning rental income from Canadian property are as follows:

NR4 Slips (with Canadian agent)

NR4 is a record that shows the amount that is paid to a non-resident. As non-resident rental income tax is withheld and remitted, you are settling your tax obligation to CRA on the rental income. The payer has to present non-resident NR4 slips, including the gross rental income and the Tax withheld on an NR4 slip. 

Section 216 Tax Return

Electing Section 216 gives the possibility to decrease the expenses and capital cost allowance from the rental income and calculate and remit taxes on net rental income instead of gross income. This would help with cash flow due to fewer tax payments. 

Minimize the Tax withheld amount (NR6 Form)

Once the CRA approves your NR6 form, the payer can submit monthly taxes on net rent income rather than their gross rental amount. The tax amount must be remitted on or before the 15th day of the following month.

How can HAP CPA Inc. help you with Non-Resident Tax?

At HAP CPA Inc., we will help you file non-resident tax, and help you understand the dos and don’ts. Our focus makes sure that all our clients are satisfied with our services as we hope to build great business relationships with them.