A client lives in Edmonton, Alberta and has a house there but came to Ontario for a job contract (Construction) and has been here since February 2021. His wife and three children joined him here in September 2021.
According to the Tax Package, it says - "Enter the province or territory where you lived or were considered to be a factual resident on December 31, 2021."
Also in the section where it says “Which tax package should you use?” - it says “if you have residential ties in more than one province, use the package where you had most important residential ties.”
When completing his tax return, would he be considered a factual resident of Alberta or Ontario?
He has residential ties in Alberta (house) and in Ontario (wife and children) and he is planning to go back to Alberta once his contract ends.
I thank you in advance for your help and comments.
That is a tricky one. If you look at the treaty tie breaker rules for determining residency between countries there are two main considerations with #1 being more important than #2. For example if someone has a house in Canada that they leave empty they can not break residency even if all other considerations point firmly to non-residency. The house must be rented out on long term lease or sold to counter #1.
where do you have a house available for your use - with owned houses being generally more important than rented houses so this would tend to lean strongly towards Alberta. Is his house in Alberta empty awaiting his return (or he has family members live it or check on it regularly) or has he rented it out?
Center of vital interests - which is where is your family/job/social life centered. In his case it’s clearly Ontario. One consideration is how long the contract is - when does he expect to be back in Alberta?
If he has rented out his house in Alberta to arm’s length renters under long term lease (at least a year) I’d say he’s resident in Ontario as of Dec 31, 2021. If not, a strong argument could be made for Alberta which is likely to have lower taxes for him and his family.