Canadian residents pay tax in the province in which they are resident at December 31. If you were to have been living in Alberta all year and then move to Nova Scotia in the middle of December, you will pay Nova Scotia tax for the entire year. The Nova Scotia personal tax rates are higher than the Alberta rates, so you will owe income tax when you file. The better strategy is to move from a high tax rate province to a low tax rate province late in the year, so that you will get a refund of the higher tax that was withheld during the year. Consider your options, there is no prorating of personal income tax, wherever you are living on New Year’s Eve that is the province that will charge you income tax for the whole year.
Written by: Debi J. Peverill