Living in Gatineau and working in Ottawa: how does income tax work?

Your province of residence on December 31 determines your provincial income tax. Living in Gatineau on that date means paying Quebec provincial tax, even if you work in Ottawa. This is not double provincial taxation.

Employers withhold income tax according to the province of employment. An Ottawa employer therefore withholds Ontario tax, which may not cover the amount calculated on your Quebec return. Many commuters consequently owe Quebec a balance.

There is no official typical amount. Budget for a possible balance rather than assuming payroll withholding will cover it.

On federal line 43800, request a transfer of up to 45% of the income tax shown on slips from payers outside Quebec. Enter exactly the same amount on line 454 of your Quebec return.

Revenu Québec credits the amount only if you requested the transfer on your federal return. It transfers tax already withheld; it is not a second provincial tax.

You can ask for additional income tax to be deducted on your federal TD1; the employer must add it to withholding. Whether an Ontario employer can withhold Quebec tax itself varies: ask payroll.

The CRA instalment threshold is $1,800 for Quebec residents ($3,000 elsewhere). Revenu Québec requires instalments if you expect net Quebec tax owing above $1,800. Quebec instalments are due March 15, June 15, September 15 and December 15.

Quebec residents receive a refundable federal abatement of 16.5% of basic federal tax. This percentage applies to basic federal tax, not to your income.

• Determine your December 31 province of residence and review return instructions.
• Discuss the employment province and extra TD1 withholding with payroll.
• Check federal line 43800 and the matching amount on Quebec line 454.
• Check whether CRA instalments are necessary.
• Check Quebec instalments and their due dates.
• Prepare the other steps for moving from Ottawa to Gatineau.