Determining Canadian tax residency is not always straightforward.
Many Canadians moving to the United States find themselves asking a simple question:
“Am I still a Canadian tax resident?”
When the answer is unclear, one option available is the CRA’s NR73 form.
What Is Form NR73?
Form NR73, Determination of Residency Status (Leaving Canada), allows individuals to request an opinion from the CRA regarding their residency status after leaving Canada.
The form asks detailed questions about:
- Family ties
- Property ownership
- Financial accounts
- Employment arrangements
- Social connections
- Travel patterns
The CRA uses this information to assess whether you have sufficiently severed your residential ties with Canada.
When Should You Consider Using NR73?
The form may be useful when your circumstances are unclear.
Examples include:
- Family members remain in Canada
- You continue to own a Canadian home
- You maintain significant Canadian investments
- You frequently travel back and forth between countries
In these situations, obtaining guidance can provide additional certainty regarding your tax position.
Why Many Advisors Treat NR73 as a Secondary Option
While the form can be helpful, many cross-border tax professionals prefer to first analyze residency using existing CRA rules and case law.
The reason is simple: once submitted, the CRA reviews all of the information you provide and reaches its own conclusion.
For that reason, many taxpayers first evaluate their primary and secondary residential ties before deciding whether a formal determination request is necessary.
Canadian Residency and U.S. Residency Are Different Tests
One area that creates confusion is the difference between Canadian and U.S. residency rules.
Canada primarily focuses on residential ties.
The United States generally applies the Substantial Presence Test at the federal level, while individual states may have their own residency standards.
As a result, it is possible to trigger residency considerations in both countries at the same time.
The Bottom Line
Canadian tax residency is one of the most important issues to resolve when moving to the United States.
Whether through a careful analysis of your residential ties or, in certain cases, the use of Form NR73, obtaining clarity on your residency status can help you avoid unexpected tax obligations and create a smoother cross-border transition.