Where to pay tax?

[Dermviser]

Hello

I'm an Ontario resident (ID and driver's license), but am doing my medical residency in Quebec. I was wondering where should I be paying my taxes? Would I be taxed under an Ontario or Quebec resident? Thank you.

[la marzocco]

47 minutes ago, Dermviser said:

Hello

I'm an Ontario resident (ID and driver's license), but am doing my medical residency in Quebec. I was wondering where should I be paying my taxes? Would I be taxed under an Ontario or Quebec resident? Thank you.

You will be taxed as a Quebec resident if you are doing your residency in Quebec as it no longer qualifies as full-time postsecondary studies. 

[rmorelan]

7 hours ago, la marzocco said:

You will be taxed as a Quebec resident if you are doing your residency in Quebec as it no longer qualifies as full-time postsecondary studies. 

yup, it will be the province you are a resident of by their definitions on the last day of the year. 

[shematoma]

22 hours ago, la marzocco said:

You will be taxed as a Quebec resident if you are doing your residency in Quebec as it no longer qualifies as full-time postsecondary studies. 

Are you sure about this? Residents are full time students.

[la marzocco]

1 hour ago, shematoma said:

Are you sure about this? Residents are full time students.

I should clarify as I wrote the above too quickly. 

Residents are both full-time students and full-time employees. As opposed to medical students where they are normally just full-time students. Historical jurisprudence confirms this view: 

• I do not find it illogical in reading Subsection 118(6) that a person can be both a full‑time student and a full‑time employee or even carry on his or her own business on a full‑time basis while a full‑time student. It is not the average person's preference but it is not an infrequent choice that many people, both residents and others, are compelled to make. (Kandasamy v. The Queen, 2014 TCC 47 (CanLII), <http://canlii.ca/t/g3rgl>)

For example, a OOP medical student studying in at a Quebec medical school must retain their home province's health insurance (i.e.,  OHIP for Ontarians going to study medicine at a Quebec medical school) and must retain the driving license from their home province for the during of their medical school studies. All of these facts point to the idea that OOP medical students are not considered residents of the province in which they are doing medical school in, but their own home province. 

However, medical residents are a different story. They are considered both full-time employees and full-time students. They must register for health insurance and driving permit in the province that you are doing your residency in. Also, you are now earning a significant proportion of income in the province you are doing your residency in. All of these facts point to the idea that you are taking up residence in the new province. Hence, should be taxed as such.

[A-Stark]

1 hour ago, la marzocco said:

However, medical residents are a different story. They are considered both full-time employees and full-time students. They must register for health insurance and driving permit in the province that you are doing your residency in. Also, you are now earning a significant proportion of income in the province you are doing your residency in. All of these facts point to the idea that you are taking up residence in the new province. Hence, should be taxed as such.

Actually in NL OOP residents are required to retain their "home" province health insurance, but not license, registration, or tax filing. 

[la marzocco]

2 minutes ago, A-Stark said:

Actually in NL OOP residents are required to retain their "home" province health insurance, but not license, registration, or tax filing. 

Interesting. Is this specifically nuanced for NL OOP medical residents? Broadly speaking, you would line everything up to make it consistent with each other (health, drivers, taxes, etc.) to the province in which you are doing your residency. 

[indefatigable]

57 minutes ago, A-Stark said:

Actually in NL OOP residents are required to retain their "home" province health insurance, but not license, registration, or tax filing. 

I ran into a problem where I no longer had any ties to my "home" province (as a student) - including address to send things to, so in the end switched everything to the new province.  As far as I can tell, there was no other way to stay insured, since without physical presence or a "home" address, I don't think I had a valid claim to health insurance  (and there wasn't any problem with the new province).  I'd be surprised if this weren't allowed for medical residents in the same situation.

[A-Stark]

2 hours ago, la marzocco said:

Interesting. Is this specifically nuanced for NL OOP medical residents? Broadly speaking, you would line everything up to make it consistent with each other (health, drivers, taxes, etc.) to the province in which you are doing your residency. 

I don't think it makes any sense. For med students, maybe, but I filed taxes as an NL resident all through residency and had everything else moved to NL. But it actually says on the application that you need to declare whether you're a "medical resident". 

1 hour ago, tere said:

I ran into a problem where I no longer had any ties to my "home" province (as a student) - including address to send things to, so in the end switched everything to the new province.  As far as I can tell, there was no other way to stay insured, since without physical presence or a "home" address, I don't think I had a valid claim to health insurance  (and there wasn't any problem with the new province).  I'd be surprised if this weren't allowed for medical residents in the same situation.

It probably depends on the province, but NS let me keep my MSI card since I was still a "student". 

 

[indefatigable]

35 minutes ago, A-Stark said:

It probably depends on the province, but NS let me keep my MSI card since I was still a "student". 

 

Yeah - maybe that would have worked (but I’d still feel iffy about the situation given absolutely no ties)..  as it occurred, I had switched  my license anyways (which  has a printed  address) and QC (new province) doesn’t generally easily process OOP health cards, so thought it made sense.

[shematoma]

On 7/29/2018 at 12:32 PM, la marzocco said:

I should clarify as I wrote the above too quickly. 

Residents are both full-time students and full-time employees. As opposed to medical students where they are normally just full-time students. Historical jurisprudence confirms this view: 

• I do not find it illogical in reading Subsection 118(6) that a person can be both a full‑time student and a full‑time employee or even carry on his or her own business on a full‑time basis while a full‑time student. It is not the average person's preference but it is not an infrequent choice that many people, both residents and others, are compelled to make. (Kandasamy v. The Queen, 2014 TCC 47 (CanLII), <http://canlii.ca/t/g3rgl>)

For example, a OOP medical student studying in at a Quebec medical school must retain their home province's health insurance (i.e.,  OHIP for Ontarians going to study medicine at a Quebec medical school) and must retain the driving license from their home province for the during of their medical school studies. All of these facts point to the idea that OOP medical students are not considered residents of the province in which they are doing medical school in, but their own home province. 

However, medical residents are a different story. They are considered both full-time employees and full-time students. They must register for health insurance and driving permit in the province that you are doing your residency in. Also, you are now earning a significant proportion of income in the province you are doing your residency in. All of these facts point to the idea that you are taking up residence in the new province. Hence, should be taxed as such.

It's not necessarily true that residents have to register for health insurance and driving license in the province where they're doing residency. You could come to this conclusion based on the same decision you cite above. If you're both a full time student and full time employee then it's a gray area. By your reasoning, a full time undergrad student studying outside of their home province who also happens to work full time, should be a resident of that province, but that's not necessarily true.

If this had to be argued in court, it might be pointed out that a resident is a full time employee only insofar as they're a full time student. The two come part and parcel. The resident is a trainee and has a fixed term employment contract. It's not indefinite and it's not a permanent job. I don't think there's a definite answer to this question until it goes to court, and the court's interpretation is ultimately the only one that matters.

[la marzocco]

8 hours ago, shematoma said:

It's not necessarily true that residents have to register for health insurance and driving license in the province where they're doing residency. You could come to this conclusion based on the same decision you cite above. If you're both a full time student and full time employee then it's a gray area. By your reasoning, a full time undergrad student studying outside of their home province who also happens to work full time, should be a resident of that province, but that's not necessarily true.

If this had to be argued in court, it might be pointed out that a resident is a full time employee only insofar as they're a full time student. The two come part and parcel. The resident is a trainee and has a fixed term employment contract. It's not indefinite and it's not a permanent job. I don't think there's a definite answer to this question until it goes to court, and the court's interpretation is ultimately the only one that matters.

It is important to take note that residency for tax purposes can be different from residency for other social benefits and privileges (such as health insurance and driver's licence). 

To answer's OP's question on whether or not they will be taxed as an Ontario or Quebec resident, you need to look "ties."

• You may be considered a resident of more than one province on December 31 of a particular year. This can happen if you ordinarily reside in another province or a territory of Canada, but are physically residing in Québec on December 31 of that year. If you are a resident of more than one province on December 31 of a year, you will be considered to be a resident only of the province or territory with which you have the most significant residential ties, for purposes of calculating provincial or territorial income tax.
• Residential ties can be broken down into significant residential ties, secondary residential ties and other residential ties.
  • Significant residential ties
    • Significant residential ties you can have with Québec are your:
      • dwelling place or places;
      • spouse; and
      • dependants.
  • Secondary residential ties
    • We may also consider secondary residential ties you have with Québec in determining your residence status for tax purposes. Secondary residential ties you can have are:
      • personal property in Québec (such as furniture, clothing, automobiles and recreational vehicles);
      • social ties with Québec (such as membership in a recreational or religious organization);
      • economic ties with Québec (such as employment with a Québec employer, active involvement in a Québec business, or a Canadian bank account, retirement savings plan, credit card or securities account);
      • permanent resident status or an appropriate work permit in Canada or Québec;
      • provincial hospitalization and medical insurance coverage;
      • a driver's licence from a province or territory of Canada;
      • a vehicle registered in a province or territory of Canada;
      • seasonal dwelling place in Québec or a leased dwelling place, as referred to above;
      • a Canadian passport; and
      • membership in a Canadian union or professional organization.
    • Generally, secondary residential ties must be looked at collectively in order to assess the significance of each of them. It would be unusual for us to consider a single secondary tie with Québec to be significant enough, in and of itself, to conclude that you are a Québec resident for tax purposes.
  • Other residential ties
    • Other residential ties that we may consider include the retention of a mailing address, post office box or safety deposit box in Québec or Canada, letterhead or business cards with a Québec address or telephone number, and local newspaper or magazine subscriptions.
    • Such residential ties are generally of limited importance unless taken with other residential ties.

When you move to Quebec for your medical residency, it would make sense to assume that you would need an a "dwelling place" - this can be a rental or a purchased home; though I am sure a purchased home suggests stronger ties than a rental, but that's a dwelling place nonetheless. If your spouse or kids also move with you (as a medical resident) to Quebec, again this would further be a significant indicator that you should be taxed as a Quebec resident. 

Moving onto secondary ties. You should have some personal effects (e.g., clothing, maybe a car depending on need/frugality, some furniture for your dwelling place). Economic ties will most likely exist when you are paid a salary for your work during medical residency. Membership in a Canadian union or a professional organization - OP will likely need to join the FMRQ and presumably not PARO. Fine, you can stretch it and be like OP doesn't have provincial health insurance with Quebec or does not have a driver's licence from Quebec. But these are secondary ties and they too must be weighed against the other secondary ties (economic, membership, etc.) and the significant tie of having a dwelling place in Quebec. 

Also.. if you're doing a 5-yr residency, it is somewhat awkward to renew your old province's health card annually (should you even qualify) for full-time OOP studies and have the hassle of having some services not covered while you're OOP. Knowing that OHIP does not cover some services and how most docs in Quebec do not accept the Ontario health card can becoming annoying. Adding to that the administrative headache that comes with filling out forms and getting your money back from OHIP.. I am not sure why anyone would be inclined to deal with that for 5 years and not just get the RAMQ coverage.. Sure if you land a full-time job in Ontario after residency.. sign back up for OHIP.. but life is fluid.. even Canadians who are not medical residents migrate for work (I know a friend who is from Nova Scotia and worked in Alberta for 2 years, then Sask for 2 years then Ontario for 2 years ongoing.. he had updating his health card every time because it would be annoying for the doc to be have to make him pay upfront and get it reimbursed later. Sure, med residents are "unique" in that we are both students and employees, but from the lens of moving provinces, we are all in the same as other fellow Canadians moving across the country for opportunities. 

 

[NLengr]

Go to an accountant (one who deals with medical professionals). Let them deal with taxes and the headaches associated with them.

When I was a resident and fellow I paid taxes in the province I was working in, as opposed to my "home" province.