Transferable Portions of the Income Tax Withheld for Another Province

Transferable Portions of Income Tax Withheld for Another Province apply when you were employed or earned income in a province other than Quebec, and income tax was withheld there. Certain amounts of that tax withheld may be transferred or credited to reduce your Quebec tax payable, avoiding double taxation. To claim this, you must report the withheld amounts on your TP-1 return and follow the instructions for transferring or claiming a credit for taxes paid to another province.

Report income and tax

On your federal T1 tax return, report your total income from all sources, including the income and tax withheld by your out-of-province employer. This information is typically found on your T4 slip.

Calculate the transfer

Enter the amount of the provincial tax withheld by the out-of-province employer on Line 43800 of your federal T1 return. The Canada Revenue Agency (CRA) will then calculate the transfer amount. The maximum transferable portion is 45% of the total provincial tax withheld by the employer outside Quebec. You cannot transfer tax if your taxable income on your federal return is zero.

Report on Line 454

Enter the same transfer amount you reported on your federal return on Line 454 of your Quebec provincial TP-1 tax return.

Example

Juliana of Quebec worked in Ontario for part of the 2024 tax year. During this time, $2,000 in income tax was withheld by their employer.

• Federal return: The individual reports the income and tax withheld from the Ontario T4 slip. They then enter the $2,000 income tax withheld on Line 43800. The CRA calculates the transferable portion.
• Quebec return: The individual enters the same amount calculated by the CRA on Line 454 of their Quebec TP-1 return. The Quebec provincial tax payable is then reduced by this transferable portion.

Maximum benefit

The total amount from this transfer is capped at 45% of the tax withheld. So, the maximum credit would be $2,000 × 45% = $900.