I'm moving from Canada to the US for work and plan to keep my house in Ontario to rent out. How do taxes work in this situation? Will Canada tax my US employment income or just the rental income, and how do I report the rental income in both countries?
Canada will not tax your US employment income after you move. However, both countries will tax your Canadian rental income. You avoid double taxation on the rent by claiming a foreign tax credit on your US return for the taxes you pay to Canada.
You can cross double taxation off your worry list. The tax treaty and foreign tax credit rules are specifically written to protect you from paying taxes twice on the same money.
When you move to the US and shift your primary ties, you become a part-year resident of Canada for tax purposes.
Under Section 114 of Canada's Income Tax Act, a part-year resident does not have to pay Canadian tax on foreign income earned after they become a non-resident. This means your US employment income is safe from Canadian taxes once you move.
