What happens if Form T1244 is filed late?
Two exposures sit side by side. The departure-year return the election belongs with is late, and for the 2025 tax year the late-filing penalty on that return is five per cent of the balance owing plus one per cent of that balance for each full month, to a maximum of twelve months. Separately, the election is what holds the departure amount over, so until it is in place and the security is accepted the amount is simply owing, and interest compounds daily on an unpaid balance. On a deferral file the second exposure is usually the larger of the two.
Can I make the deferral election after the filing date has passed?
It is worth putting to the CRA rather than assumed to be gone. A late election is a request, and it is judged on the substance as much as on the timing: whether the departure computation is complete, whether there is a genuine liability on property that cannot readily be sold, and whether acceptable security can be offered now. A submission that arrives with the computation finished and a security proposal attached asks the CRA to approve something concrete. One that arrives as a bare request to be allowed in late asks them to hold a file open while it is assembled.
Is there a penalty when the tax is deferred rather than paid?
The deferral affects when the amount is collected, not whether the return was filed on time. The late-filing penalty attaches to the return, and for the 2025 tax year it is five per cent of the balance owing plus one per cent for each full month it is outstanding, capped at twelve months. So a deferral accepted on a late return does not clear the filing exposure behind it. The two are worth keeping separate on an old file: one is fixed by the delay and capped, the other is an arrangement about collection that continues while the property is held.
Does interest run while the deferral election is outstanding?
Until an arrangement is in place, the departure amount is an ordinary balance, and interest is charged on an unpaid balance and compounds daily. That is why a late election is urgent rather than merely untidy: the exposure grows while the paperwork and the security are being assembled. On an old file we therefore deal with the computation and the security proposal together rather than in sequence, and where the arrangement may not be accepted at all we look at what the client can realistically settle now, so the compounding element is not left running on the whole amount.
Will the CRA want security before accepting a late election?
Security is the substance of the election, not an afterthought, and on a late submission it is the part that decides the outcome. The deferred amount has to be secured by something the CRA is willing to look to, and what is acceptable, how it is valued and which documents create the charge are all negotiated. On a late election there is a further question: whether anything has changed since departure, because holdings sold or encumbered in the meantime alter what can be offered. We establish what is available before making the submission.
I already settled the departure tax, can I still defer?
Once an amount has been settled, the question changes shape. There is no longer an outstanding balance to hold over, so what is being asked for is an adjustment to a position already closed rather than a deferral going forward. Whether that is available depends on the year, the assessment and what the records show about the property the tax was computed on. It is worth examining rather than abandoning, particularly where the funds originated in selling something the client would rather have kept. The starting point is the assessment history and the original computation.
Do I owe state income tax if I live abroad?
Possibly, and it is the part Americans abroad most often miss. States are not parties to tax treaties, several do not follow the federal foreign earned income exclusion, and liability generally follows domicile rather than physical presence. A driver's licence, a voter registration, a home kept available and a mailing address are the facts a state weighs. Some states have no income tax at all, which is why the last state you were domiciled in matters so much. See state residency and domicile.
When does my Canadian tax residency actually end?
On the day your residential ties are severed, which is a question of fact rather than of the date on the boarding pass. The CRA weighs the significant ties first — a dwelling available to you, a spouse or common-law partner, and dependants in Canada — then secondary ties such as licences, memberships, accounts and provincial coverage. Keeping a home available while your family stays is the pattern that most often means residency never ended at all. See departure tax on leaving Canada.
