Cross-Border Tax Help for Montreal Residents Moving to the US: The TP-1, Revenu Québec, and the Three-Authority Departure

Quebec is the only province that administers its own income tax, and a Montreal resident moving to the US files three departure-year income tax returns: the federal T1, Revenu Québec's TP-1, and the US 1040. Quebec also has its own pension plan, its own health plan, its own sales tax, and its own forms in French. A cross-border preparer who handles the federal and US sides but not the Quebec one leaves Revenu Québec expecting a full-year resident return. Fairlight works with Montreal clients remotely and prepares all three returns from one office; here is what the Quebec side involves.

Key takeaways

• Two Canadian departure returns, the T1 and the TP-1, with the same departure date on both. The departure tax is reported on both.
• Quebec's combined top rate of about 53.3% is the highest in Canada; on a $300,000 unrealized gain, roughly $80,000.
• RAMQ ends when you leave Quebec to settle outside Canada; QPP is taxable only in the US under the treaty once you are a US resident.
• Quebec's 14.975% combined GST and QST is the largest consumption tax drop of any province on a move to the US.
• Revenu Québec has its own versions of the rental filings (for a kept condo) and the corporate closing filings (for a professional corporation), and its correspondence is in French.

What a Montreal file looks like

The three returns. The federal T1 reports the departure date, the deemed disposition on Form T1243, and the property list on Form T1161. The TP-1 reports the same departure date and the same deemed disposition on Quebec's forms; the 16.5% Quebec abatement reduces federal tax. The US return is dual-status in the arrival year. One departure date, three returns.

RAMQ and QPP. RAMQ coverage ends on departure to settle outside Canada; arrange US coverage to start the same month. QPP contributions stop with the last Quebec-source employment; QPP benefits paid later to a US resident are taxable only in the US under Article XVIII, like Social Security.

The corporation. Montreal's professional and consulting corporations face the same CCPC loss and US controlled foreign corporation exposure as anywhere else, plus a Quebec corporate return (CO-17) to close alongside the federal T2. Wind up before departure.

The condo. Excluded from departure tax. If kept and rented, the federal NR6 and Section 216 have Quebec counterparts; if sold later as a non-resident, Section 116 clearance has a Quebec counterpart (Form TP-1097). A preparer who handles only the federal side leaves Revenu Québec withholding on gross rent.

Equity. Montreal's AI, gaming, and aerospace compensation carries RSUs and options. Vests after the move are split by working days between Canada and the US, and Quebec sources its share for the departure year on the TP-1.

What to expect from a cross-border preparer

• All three departure-year returns from one office, with one departure date.
• Quebec-side rental and corporate filings alongside the federal ones.
• The ability to read Revenu Québec correspondence, which arrives in French.
• A destination-state review: Florida's homestead calendar, New York's residency rules, California's annual RRSP inclusion, Texas property tax.
• Ongoing filings: the Quebec side of Section 216 if the condo is rented, NR4 reporting on RRSP withdrawals, and the annual US return.

Where Montrealers go

Florida (Hollywood, Hallandale Beach, Fort Lauderdale, and increasingly Miami) for retirement and business; New York and Boston for finance and biotech; Texas and California for tech and aerospace; Washington for international organizations. Fairlight's corridor guides cover each Montreal-to-city pair.

Worked example

A Montreal software engineer with $200,000 of unrealized gain in a non-registered account, $400,000 in an RRSP, RSUs vesting after the move, and a Plateau condo kept and rented moves to Austin on June 30.

• T1 and TP-1. June 30 departure date on both; $200,000 gain, $100,000 taxable, roughly $53,000 of tax split across the two returns.
• Condo. NR6 and Section 216 federally; Quebec equivalents filed alongside; agent appointed.
• RSUs. Vests split by working days; Quebec's share on the TP-1 for the departure year.
• RRSP. No tax on departure; federal deferral; no Texas layer.
• US. Dual-status first return; XIII(7) election; FBAR and Form 8938.

Official sources

"The fact that you leave Québec during the year does not release you from your income tax obligations in Québec." — Revenu Québec, Leaving Québec, https://www.revenuquebec.ca/en/citizens/your-situation/residence-status-and-tax-obligations/leaving-quebec/

"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

Quebec files fail on coordination, not on the law. The most common error we correct is a federal T1 with a departure date and a TP-1 filed as a full-year resident, which leaves Revenu Québec expecting tax on worldwide income for a year the client spent in the US. Three authorities, one date, checked three times.

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 T1, the TP-1, the first-year US return, and ongoing cross-border filings for Montreal clients moving to the US. See cross-border pricing or book a call.