Toronto to Columbus: Banking, the JPMorgan Corridor, and Ohio's Flat Tax Plus City Tax

JPMorgan Chase's Columbus campus is one of the largest bank operations centres in the US, and it recruits from Bay Street. Nationwide, Huntington, and the region's growing tech and data centre sector do too. The move is a large tax cut: Ontario's combined top rate of about 53.5% becomes about 42% in Columbus, including the city's 2.5% income tax.

Key takeaways

• Ontario's roughly 53.5% top rate, including the provincial surtax, sets the departure tax. On a $300,000 unrealized gain, about $80,000.
• Ohio's flat 2.75% state tax plus Columbus's 2.5% city tax, about 5.25% combined.
• Ohio follows the treaty's RRSP deferral.
• 13% HST becomes 7.5% sales tax.
• OHIP ends on permanent departure. Keeping the Toronto home means NR6, Section 216, and the Vacant Home Tax if empty.

The Ontario departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Ontario real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 for illiquid assets. The Toronto home: sell it, rent it under NR6 and Section 216, or face the Vacant Home Tax.

Columbus's side

Flat 2.75% state income tax; 2.5% Columbus municipal income tax, with suburbs charging their own; 7.5% sales tax in Franklin County; property tax near 1.5% to 2%; no estate tax.

The RRSP in Ohio

Federally deferred under Article XVIII of the treaty and deferred for Ohio. Canadian withholding is 25% on lump sums, 15% on periodic RRIF payments within the treaty limit, with a US foreign tax credit federally. Municipal tax generally does not apply to retirement income.

Who makes this move

Bay Street operations and technology staff to JPMorgan Chase's Columbus campus, Toronto insurance professionals to Nationwide, Toronto software engineers to the region's tech employers and data centres, and Ontario corporate staff to Columbus's headquarters.

Worked example

A Toronto bank technology manager moves to Columbus on June 30 with $200,000 of unrealized gain in a non-registered account, $500,000 in an RRSP, RSUs vesting after the move, and a Toronto condo sold in the departure year.

• Departure tax. $200,000 gain, $100,000 taxable, at about 53.5%: roughly $53,500.
• Condo. Sold as a resident under the principal residence exemption.
• RSUs. Vests split by working days; Ohio and Columbus tax their share.
• RRSP. No tax on departure; federal and Ohio deferral.
• Columbus. Combined top rate about 42%. HST 13% becomes sales tax 7.5%.

Official sources

"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

Ohio's individual income tax rates and brackets are published by the Department of Taxation. — Ohio Department of Taxation, Annual Tax Rates, https://tax.ohio.gov/individual/resources/annual-tax-rates

There are 5 Ontario income tax brackets and 5 corresponding tax rates. — Government of Ontario, Personal income tax, https://data.ontario.ca/dataset/personal-income-tax-rates-and-credits

Practitioner note

Toronto-to-Columbus is usually an employer relocation with equalization, and the Ohio municipal tax is the line the equalization provider most often gets wrong. We reconcile the settlement against the actual Ohio and Columbus returns.

See also: Weighing Florida instead? See the Canada-to-Florida guide, or the same city's Toronto to Miami guide.

Next step

Fairlight prepares the Ontario departure return, the equalization reconciliation, and the first-year federal, Ohio, and municipal returns. See cross-border pricing or book a call.