Moving from Quebec to Texas: Taxes, the TP-1, and the Biggest Rate Drop

Quebec and Texas sit at the two extremes of the entire province-to-state matrix. Quebec’s combined federal-plus-provincial top rate runs about 53.31%, the highest of any province. Texas charges no state income tax at all. Nothing else in the matrix, no other province paired with any other state, produces a larger drop. Quebec also runs the one departure that touches three tax authorities instead of two, because Quebec administers its own income tax separately from the CRA. The rate drop is real, but the TP-1, the exit tax, and Revenu Québec’s own clock all have to clear before Texas’s zero actually applies to you.

Why does Quebec’s rate drop so much in Texas?

Because the two ends of the corridor are built opposite each other. Quebec’s own bracket structure tops out at 25.75% provincially, and stacked on federal tax that produces a combined top marginal rate near 53.31%, the highest combined rate in Canada. Texas has no personal income tax, no state capital gains rate, and the Texas Constitution, Article VIII, Section 24-a requires voter approval before the legislature could create one. A Texas paycheck’s only income tax is the federal bracket, 10% to 37%.

• No other pairing in the matrix, Ontario to Washington, Alberta to Florida, anything else, closes a wider gap than this one.

	Quebec	Texas
Income tax (province/state)	Up to 25.75% provincial	None
Combined with federal top rate	About 53.31%	About 37% (federal only)
Sales tax	QST 9.975% + GST 5%, about 15% combined	6.25% state, up to 8.25% combined with local
Property tax (typical effective rate)	Below 1% of assessed value in most Quebec municipalities	1.6% to 2.5% of assessed value
Business tax	Quebec corporate tax plus federal	No corporate income tax, but a franchise tax on gross margin
Estate tax	None (deemed disposition at death instead)	None at the state level; federal estate tax can still apply

Do I file with Revenu Québec as well as the CRA?

Yes, and this is the piece unique to a Quebec departure. Every other province has its tax calculated directly on the T1, administered by the CRA. Quebec runs its own agency: it issues Relevé slips instead of T4 and T5, assesses independently of the CRA, and requires a final TP-1 reporting worldwide income to the departure date and Quebec-source income for the rest of the year. The Quebec abatement, a 16.5% reduction to federal tax that offsets Quebec collecting its own, gets prorated in a departure year rather than dropped outright.

• In the year you leave you are dealing with the CRA, Revenu Québec, and the IRS, three separate authorities, three separate clocks.

• The federal mechanics, including the T1161 and T1243 forms, are covered in the departure tax forms guide; the full sequence sits in the leaving-Canada checklist.

• A clean CRA assessment does not mean the TP-1 side is closed. Revenu Québec assesses on its own timeline, and Relevé 1 (employment) and Relevé 3 (investment income) are the slips you need, separate from the federal T4 and T5.

What happens to the departure tax at Quebec’s rate?

Quebec’s departure tax is the heaviest provincial exit in the country, because the deemed disposition, a sale of most capital property at fair market value on the date Canadian residency ends, gets taxed at Quebec’s own top bracket. The ITA 128.1(4) deemed disposition applies for both federal and Quebec purposes, and the resulting gain lands on both the T1 and the TP-1. Texas has no state return to offset against, since none exists, so the entire exit tax is a Canadian-side event that the eventual foreign tax credit on the US return has to absorb in full.

Does QST disappear the moment I leave?

Yes, for personal filings. QST at 9.975% stacks with the 5% GST to a combined rate near 15%, close to what an HST province charges. That consumption tax stops applying to your own purchases once Quebec residency ends, though a business still registered for QST needs a formal deregistration step separate from the personal departure filings. Texas replaces it with a lower combined rate, 6.25% state plus local, up to about 8.25%, and no equivalent to a provincial QST layered on top.

What happens to my RRSP in Texas?

This is the cleanest RRSP math among the major US destinations. The treaty defers US federal tax on RRSP growth until withdrawal, automatically, with no election required for an eligible individual. Because Texas charges no state income tax, there is no state-level addback to plan around, unlike a New York or California file where the state taxes the same growth the treaty defers federally. The eventual withdrawal faces federal US tax plus Canadian withholding, 15% periodic or 25% lump sum under the treaty, and the foreign tax credit only has one system on the US side to absorb it against.

• A TFSA still creates the same US reporting question regardless of state: potential Form 3520/3520-A exposure and PFIC treatment on the underlying investments. Most people collapse it before the move.
• The US-Canada treaty is what makes the deferral automatic; nothing about that mechanism changes because the destination is Texas rather than any other state.

What happens to RRQ and RAMQ once I’m in Texas?

The Régime de rentes du Québec, Quebec’s version of CPP, keeps paying on the same schedule regardless of where you live once you qualify. Payments to a US resident are taxed under the treaty rather than under Quebec or federal Canadian rules, the same mechanics covered for CPP and OAS recipients generally. RAMQ is different: reciprocal coverage provisions can carry a tail of roughly three months after residency ends, but that tail is not automatic. You have to notify RAMQ of a permanent departure directly, and the provincial health insurance wind-down guide covers what to line up before that window closes.

Where do Quebec movers to Texas actually work?

The corridor is smaller than Ontario’s or Alberta’s, but it is a real one. Quebec’s hydroelectric and engineering talent, trained on some of the largest generation and transmission projects in the country, moves into Houston’s energy sector, where that background transfers directly to power generation, LNG, and grid engineering work. A smaller stream of Montreal tech workers moves into Austin and Dallas on the same equity-heavy packages that draw talent from every other Canadian city.

• Neither flow matches the volume of the Ontario-to-Texas or Alberta-to-Texas corridors, but the rate math driving it is identical, and for the energy-sector movers it is arguably a closer professional fit.

What should I do before I file?

Start with the departure date, since it fixes the TP-1, the T1, and the deemed disposition together, all keyed to the same day. Confirm which slips you’re waiting on from Quebec employers or payers, Relevé rather than T4, and get both the CRA and Revenu Québec filings moving on the same timeline rather than treating the TP-1 as an afterthought. Notify RAMQ directly rather than assuming coverage lapses on its own.

• Model the departure-year gain against Quebec’s top rate before you pick a departure date, and confirm the FTC on the eventual US return is large enough to absorb both the federal and Quebec portions of the Canadian tax.

• The general Quebec-to-US corridor

• Moving from Quebec to Florida, the other no-income-tax destination for comparison

• Moving from Quebec to New York, the high-tax-to-high-tax comparison

• Moving from Quebec to California, the double-high-tax comparison

• Moving from Quebec to Washington State, the capital gains excise corridor from Quebec

• The generic Canada-to-Texas corridor

• Moving from Ontario to Texas, the larger volume version of this same corridor

• Moving from Alberta to Texas, another no-provincial-tax-to-no-state-tax move

• Canada’s departure tax, T1161 and T1243

• Leaving Canada permanently: the checklist

• RRSP and TFSA after moving to the US

• The US-Canada tax treaty explained

• Your first US tax return as a Canadian immigrant

• How CPP and OAS are taxed once you live in the US

• Provincial health insurance rules on leaving Canada

• State income tax for cross-border filers

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.