Form NR73: Residency Determination When Leaving Canada

Form NR73 is a questionnaire a person leaving Canada may submit to the Canada Revenue Agency for its opinion on whether they have become a non-resident for tax purposes. Filing is optional. Residency is decided by the facts — the ties kept or severed; a filed NR73 hands the CRA an inventory of those ties and a hard-to-contest opinion.

On this page

1. What decides residency?
2. What does NR73 ask?
3. Why do most advisers say not to file it?
4. What does a departure require instead?
5. What about NR74?
6. Worked example
7. Frequently asked questions
8. Related guides
9. Official sources
10. Next step

What decides residency?

Canadian tax residency is a question of fact, centered on residential ties. Primary ties: a home in Canada available for your use, a spouse or common-law partner in Canada, and dependants in Canada. Secondary ties: Canadian bank accounts and credit cards, a Canadian driver's licence, provincial health coverage, personal property in Canada (a car, furniture in storage), social and professional memberships, and the length and regularity of visits. A person who leaves with their family, sells or rents out the home at arm's length, and establishes a home abroad is a non-resident from the departure date; a person who keeps a house available and a spouse in Canada is usually still a resident regardless of where they sleep. The Canada–U.S. treaty's tie-breaker rules (permanent home, centre of vital interests, habitual abode, citizenship, and finally agreement between the two tax authorities) resolve cases where both countries claim the person.

What does NR73 ask?

The CRA reviews the answers and replies with its opinion — resident, non-resident, or deemed resident — usually within a few months. The opinion is not binding in law, but it is the CRA's stated position on your file.

Why do most advisers say not to file it?

Three reasons. It is unnecessary: non-residency is established by severing ties and reporting the departure date on the final return; the CRA does not require a determination. It is one-sided: the form asks for every tie, and the CRA's assessment weighs the ties kept — a family cottage, a joint account left open for convenience — more heavily than the taxpayer might expect, producing a "still resident" opinion that then has to be rebutted. And it locks in a position: a taxpayer who receives an unfavorable opinion and proceeds as a non-resident anyway invites the dispute; one who receives a favorable opinion has gained little they could not establish with their own records. The form's value is in genuinely ambiguous cases where the taxpayer wants the CRA's view before structuring — a long-term assignment abroad with the home kept, a spouse staying behind — and in cases where a Canadian payer or plan administrator insists on CRA confirmation before applying non-resident withholding.

What does a departure require instead?

A final resident return for the year of departure, reporting worldwide income to the departure date and Canadian-source income after it, with the departure date entered on the return. The deemed disposition of most capital property at fair market value on the departure date (the "departure tax"), reported on the return, with Form T1243 listing the deemed dispositions and Form T1161 listing reportable property when its total value exceeds C$25,000 (Canadian cash, registered plans, pension rights, and personal-use items under C$10,000 each are left out) (a penalty applies for failing to file T1161 even when no tax is due). An election to defer payment of the departure tax (Form T1244), with security above a threshold. Notification to every Canadian payer — banks, brokers, plan administrators, tenants — of the change of residency so Part XIII withholding begins (the NR301 guide covers the treaty rates). And, going forward, non-resident returns only where required (section 216 for rentals, a return for employment or business income earned in Canada, section 217 elections where beneficial). The Represent a Client authorization for the cross-border preparer is set up before departure (the Represent a Client guide).

What about NR74?

NR74 is the mirror form for someone entering Canada who wants the CRA's opinion on whether they have become a resident. The same logic applies: optional, fact-driven, and usually unnecessary unless the situation is ambiguous.

Worked example

A Montreal couple move to Fort Lauderdale on August 12: they sell the condo, close their Quebec health coverage, cancel their Quebec licences, keep one Canadian bank account for their RRIF deposits and a small Canadian brokerage account, and buy a home in Florida. Their adviser does not file NR73 — the primary ties are gone, the home is sold, and the remaining accounts are routine for non-residents. The departure return reports August 12, the deemed disposition of the brokerage holdings (T1243), the property listing (T1161), and worldwide income to that date; the brokerage and the RRIF administrator receive NR301s. A former colleague in a different situation — transferred to Houston for a "two-year" assignment, house in Ottawa kept and empty, spouse and children staying for the school year — files NR73 because his employer's Canadian payroll needs the CRA's confirmation before treating him as a non-resident: the CRA opines that he remains a resident (a home available and a family in Canada), and he plans around a factual resident return until the family joins him and the house is rented.

Frequently asked questions

Official sources

The CRA states: “Complete this form if you have left or are planning to leave Canada temporarily or permanently and need help determining your residency status for income tax purposes.” — Canada Revenue Agency, NR73 Determination of Residency Status (leaving Canada), https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html

Publication 597 states: “Article IV provides definitions of residents of Canada and the United States, and provides specific criteria for determining your residence (a tie-breaker rule) if both countries consider you to be a resident under their domestic tax laws (a dual-resident taxpayer).” — Internal Revenue Service, Publication 597, Information on the United States–Canada Income Tax Treaty, https://www.irs.gov/publications/p597

Next step

Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle departure planning and returns — residential tie review, the NR73 decision, Forms T1161, T1243, and T1244, payer notifications, and coordination with the first U.S. resident return. See pricing or book a call.