How do I determine residency?
Under film and television tax credits, eligible labour expenditures are based on residency in Ontario for purposes of the provincial credits, and residency in Canada for purposes of the federal credits. CRA provides guidelines to assist companies in determining whether individuals are resident in Canada. An individual may be a “factual resident” or a “deemed resident” of Canada. Factual residents of Canada are those who have established significant residential, economic and social ties to Canada. They are subject to Canadian and provincial/territorial income tax on worldwide income throughout the year. Labour expenditures paid to factual residents may qualify for both federal and provincial film and media tax credits. CRA’s guidelines have a list of documents that are evidence of strong ties to Canada for purposes of establishing if someone is a factual resident of Canada. For more information see Residency status determination. The same principles can be applied in determining if an individual is Ontario-based individual or a resident of another Canadian province.
This is distinguished from “deemed residents” who have not established significant ties in Canada but were in Canada for 183 days or more in a calendar year. They are subject to Canadian income tax on worldwide income throughout the year and are subject to federal surtax instead of provincial tax. For more information see Residency status determination. Labour expenditures paid to “deemed residents” may qualify for federal film and television tax credits but do not qualify for provincial film and television tax credits.