A Cross-Border Tax Accountant in South Florida: What Canadians in Miami, Fort Lauderdale, and Palm Beach Actually Need

South Florida has the largest concentration of Canadians in the US, and the tax work they need is specific: no state income tax to file, but a US federal return that has to coordinate with a Canadian departure return, a snowbird history that may have made them US residents before they moved, and a set of Canadian accounts and properties that need ongoing filings on both sides. Fairlight is based in Brickell and sees these files daily. Here is what the work involves.

Key takeaways

• Florida has no state income tax, no state estate tax, and no state layer on RRSP withdrawals. The US side of a Florida file is federal only.
• The Canadian side carries the departure tax, the final T1 (and TP-1 for Quebecers), and ongoing filings for any Canadian property, RRSP withdrawals, and pension income.
• Most Florida arrivals met the US substantial presence test before the move; the first US tax year, the FBAR start, and the TFSA exposure are often earlier than the client thinks.
• Florida's homestead exemption runs on a January 1 / March 1 calendar and doubles as domicile evidence for the CRA.
• The Quebec community in Hollywood, Hallandale Beach, and Fort Lauderdale adds Revenu Québec's TP-1 to the departure year.

The three Florida files

The snowbird going permanent. A retiree who has wintered in Florida for years and now stays. The first question is the three-year day count: 130 days a winter for three winters meets the substantial presence test, and if no Form 8840 was filed, the client may already be a US resident for a prior year. The work: reconstruct the day count, determine the first US tax year, file the Form 8840s or the streamlined catch-up, then the Canadian departure return, the RRIF conversion and periodic withdrawal plan at the treaty's 15% rate, NR301 on any pension, the CPP and OAS treaty position, and the homestead application.

The professional who moved for the job. A Toronto or Montreal finance, tech, or healthcare professional recruited to Brickell, Coral Gables, or Fort Lauderdale. The work: the corporate wind-up if there is a professional corporation, the departure tax with pre-departure loss harvesting, the equity sourcing for RSUs vesting after the move, the Toronto home decision (sell, rent under NR6, or face the Vacant Home Tax), the dual-status first return with the Article XIII(7) election, and a Florida domicile file (declaration of domicile, driver's licence, homestead).

The Canadian with a Florida property who has not moved. A resident of Canada with a condo in Naples or Fort Lauderdale rented part of the year. The work: the section 871(d) election on a 1040-NR so the rent is taxed on net rather than 30% of gross, Florida's tourist development tax on short-term rentals, the T776 and T1135 on the Canadian side, and FIRPTA planning for the eventual sale.

Florida-specific items

• Homestead. Own and occupy as your permanent residence on January 1, apply by March 1, for up to $50,000 off assessed value and a 3% cap on annual assessment increases. Buying in the wrong month costs a year.
• Declaration of Domicile. Filed with the county clerk under Florida Statute 222.17; useful evidence for the CRA that Canadian ties were severed.
• Documentary stamp tax. 0.7% of the price on a purchase deed (0.6% on single-family homes in Miami-Dade).
• Sales tax. 7% in Miami-Dade, Broward, and Palm Beach.
• No state estate tax. But a Canadian who becomes a Florida domiciliary enters the US federal estate tax system on worldwide assets above $15 million; a Canadian who does not is subject to US estate tax on Florida real estate above the treaty-prorated exemption.

What the ongoing work looks like

Every year after the move: the US 1040 (federal only), the FBAR and Form 8938 on remaining Canadian accounts, NR4 reporting on RRSP and RRIF withdrawals with the 15% treaty rate, Section 216 returns if a Canadian property is rented, and Section 116 clearance when it is sold. For Quebec clients, the Revenu Québec side of the rental filings. For clients with a surviving Canadian corporation, Form 5471.

Worked example

A Toronto couple who have wintered in Boca Raton for six years decide to stay permanently on September 30, with $250,000 of unrealized gain in a non-registered account, $1.1 million in RRSPs, a $90,000 TFSA, and a Toronto home they will sell.

• Day count. 130 days a winter; substantial presence test met three years ago; no Form 8840 filed. First US tax year is three years back. Streamlined catch-up for the prior years' returns and FBARs.
• TFSA. Taxable in the US since the first US tax year; closed now.
• Departure. Final T1 with a September 30 departure date; $250,000 gain, $125,000 taxable, roughly $67,000 of tax.
• RRSP. RRIF conversion; periodic withdrawals at 15%; no Florida tax.
• Home. Sold under the principal residence exemption.
• Florida. Homestead applied for in January; declaration of domicile filed; no state income tax.

Official sources

"No tax upon estates or inheritances or upon the income of natural persons who are residents or citizens of the state shall be levied by the state, or under its authority." — Florida Constitution, Article VII, Section 5(a), https://www.flsenate.gov/Laws/Constitution#A7S05

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

Practitioner note

The South Florida file that goes wrong is the snowbird who 'moved' this year but became a US resident three winters ago. The fix is a streamlined catch-up, and it is far cheaper than the FBAR penalties it prevents, but it has to be done before the IRS asks. We count the days first.

Corridor guides

• Calgary to Miami: Energy Finance, Departure Tax, and Alberta's Cleanest Exit
• Montreal to Miami: The TP-1, Revenu Québec, and the Biggest Rate Drop in the Country
• Ottawa to Miami: What Happens to a Federal Pension When You Move to Florida
• Toronto to Miami: Ontario Surtax Out, Florida Homestead In
• Vancouver to Miami: Tech Money, the Substantial Presence Test, and the BC Property You Leave Behind

See also: Planning the move? Start with the Canada-to-US tax checklist and browse every corridor by city, province, and state.

Next step

Fairlight prepares the day count and any catch-up filings, the Canadian departure return, the first-year US return, and ongoing cross-border filings for Canadians in South Florida. See cross-border pricing or book a call.