All the Numbers

Where you live on 31 December

From the All the Numbers wiki · Tax

Your tax year is the calendar year.[1] The province you live in on 31 December is the one whose income tax applies to that year: provincial income tax is due where you live on that day, not where you lived for most of the year, unless you also have business income earned in another province.[2] A move in the middle of the year therefore does not split that year's provincial tax between two provinces.

Federal tax is the same wherever you live. The provincial part, with its own brackets and credits, is set out in income tax brackets and in each province's entry, such as Quebec income tax.

What the plan does with it

  • One province for the household. The plan has one province, and every year of the plan is worked out under its rules. A plan that has not been given a province is worked out under Ontario's, and the run says so until one is chosen under Household.[3] Each person's return is filed once, at the end of the year.[4]
  • No move in the middle of the plan. Because the province does not change, a plan does not carry the household from one province to another.
  • A cottage elsewhere. A cottage can sit in another province from the one the household lives in. Its land transfer tax and property tax follow that province, but the income tax on its rent and on a gain when it is sold stays with the household's own province.[5] See buying a cottage.

What it deliberately does not do

  • Years of residence. The engine's people model can hold a province for each stretch a person lives in Canada, and can read the province at each 31 December. The tax run does not use those periods, so a move is not modelled and a year spent outside Canada is not treated differently.
  • Each person's province. Each person's own tax return is worked out under the household's province. The plan does not put two people in two provinces. See taxes are per person.

See also

  • Buying a cottage · A cottage is a second home for you and your family, kept alongside the home you live in. It can be bought with as little as 5% down if it is usable all year, or 10% if it is seasonal, but first-time buyer help, the Home Buyers' Plan and the FHSA cannot pay for it.
  • Income tax brackets and your marginal rate · Federal and Ontario tax are each charged in slices of income at rising rates, then reduced by credits, with an Ontario surtax and health premium on top. The marginal rate is what the next dollar costs; the average rate is total tax over income.
  • Income tax in Quebec · A Quebec resident files two returns, a federal one and a Quebec one. The federal tax is cut by an abatement of 16.5%, because Quebec runs programs the federal government pays for elsewhere.
  • Taxes are per person · Canada has no joint return, so each of you is taxed on your own income with your own brackets and credits. The routes that do move income between partners — pension splitting, spousal RRSPs, prescribed-rate loans — are not modelled, so a couple's real bill may be lower than this.
  • Who the plan is about · A plan covers one person or two. Where a birth year is missing the plan assumes the person is 40 and born on 1 January, says so on the page, and uses that age for tax, pension and account rules until the real one is entered.

References

  1. ↑Income Tax Act s.249(1)(c): a taxation year is, "in any other case, a calendar year" · An individual's taxation year is the calendar year · effective 1972-01-01
  2. ↑Income Tax Regulations s.2601(1): "If an individual resides in a particular province on the last day of a taxation year and has no income" from a business with a permanent establishment outside it, the income earned in that province is the individual's income for the year · Provincial income tax: an individual who lives in a province on the last day of the year and has no business income from a permanent establishment elsewhere is taxed by that province on all of the year's income · effective 1972-01-01
  3. ↑CRA — the province of residence on 31 December decides the provincial return; our convention · A plan that names no province is taken to be in Ontario, as every plan was before the province could be chosen; reported on the run until a province is chosen · effective 2026-10-03
  4. ↑ITA 249(1): "a taxation year is … (c) in any other case, a calendar year" (an individual's taxation year, read 2026-10-22) · Each person's return is filed once a year, in December, on the whole calendar year. January to November the tax withheld so far (pay, pensions, registered withdrawals) is counted as the year's tax, so monthly net worth does not treat withholding as savings; tax on income with nothing withheld (rent, investment income, gains) appears in December. The year's tax, refund and balance owing are the same as assessing every month · effective 2026-10-22
  5. ↑CRA — Your province or territory of residence ("enter the province or territory where you lived, or were considered to be a factual resident, on December 31") · A cottage can be in another province or territory than the one the household lives in: its land transfer tax, any tax on buyers from outside the province and its property tax are that province's; income tax on its rent and on a gain on its sale stays the household's province's, since provincial income tax is due where the person lives on 31 December; a home the household lives in is always in its own province (moving is its own event) · effective 2026-10-26