How to report income earned outside of your province on a tax return

If you've found a way to earn money outside of your province of residence, here's how to properly report it when filing your tax return.

How to report income earned outside of your province on a tax return

If you currently reside in one province and work in another, you will need to report income earned outside your province of residence.

  • When it’s time to pay your taxes, you’ll need to make sure to file your taxes with the proper province. This is important, because the income taxes paid in Canada make up the majority of revenues for the Government of Canada and for each province.

Due dates

The taxes collected are used to fund essential services available to the people of in your province. It is up to each taxpayer to calculate and assess the amount of taxes they owe or are owed.

  • You are given until April 30th to file your personal income taxes.
  • The due date is June 15th if you are self-employed, but if you owe money, you’re subject to interest charges, as of April 30th.

Determine which province you need to file a tax return for

Your first step to reporting the income you earned while outside your province of residence, is to figure out which province are you liable for taxes.

  • You will need to file taxes for the province where you reside on December 31st of the taxation year. This means you are considered a resident of that province.
  • You’re considered a resident of a province even if you’re just temporarily living in the province.

You can also be determined a resident in a province if you have the most significant ties to that province. There are a few factors involved:

  • Which province is home to your place of dwelling?
  • Where does your spouse or common-law partner live?
  • Where do any of your dependents reside?

You’re a resident of more than one province

You may now have a clearer idea in your head of which province you need to file income taxes for, but there is another important fact you need to think about.

  • In some cases, you may be determined to be a resident of two or more provinces.
  • This type of case is clarified in section 1.3 of the Canada Revenue Agency (CRA) Income Tax Folio S5-F1-C1: Determining an Individual's Residence Status.

How it can happen

According to the Canada Revenue Agency, this can happen when you physically reside in one province, other than the one you usually live in on December 31st of the tax year.

This happens when you take a job opportunity or go to school in another province and it happens to overlap December 31st of the tax year.

Residential ties

Does this all sound confusing? Not to worry.

  • If you are one of those people who are determined to be a resident of two provinces, for your income tax purposes, you are only a resident to the one province where you have the most significant residential ties.
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