Moving from the US to Ontario: What Changes on Your Taxes
Moving from the US to Ontario combines the federal Canadian tax obligations with Ontario’s specific provincial rules: the Ontario income tax brackets and surtax, the Ontario Health Premium (OHP), the OHIP enrollment and 3-month waiting period, Ontario’s land transfer tax (plus Toronto’s municipal LTT if you buy in the city), and the Ontario Trillium Benefit. If you are a US citizen, you continue filing US returns on worldwide income, and the FTC coordinates the two countries’ taxes. If you are not a US citizen (you are abandoning a green card or were on a visa), the US filing obligations may end, but the exit tax and Form 8854 may apply.
Ontario’s combined federal-provincial marginal rates hit 53.53% at the top bracket ($220,000+), compared to 37% federal plus state in the US (0% state in Florida/Texas, up to 13.3% in California). The rate difference means Canadian tax consistently exceeds US tax at most income levels, generating excess FTC on the US return. OHIP coverage starts after a 3-month waiting period from the date you establish Ontario residency, during which you need private insurance. Ontario’s land transfer tax is graduated and adds 1.5-2.5% to the cost of buying a home (higher in Toronto with the municipal LTT).
What are Ontario’s income tax rates?
Ontario uses a surtax system on top of its basic provincial tax rates. The 2025 brackets:
| Taxable income (Ontario) | Provincial rate |
|---|---|
| Up to $51,446 | 5.05% |
| $51,446 to $102,894 | 9.15% |
| $102,894 to $150,000 | 11.16% |
| $150,000 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
The Ontario surtax adds 20% on basic provincial tax over $4,991 and 36% on basic provincial tax over $6,387. This effectively increases the marginal rate at higher income levels beyond the posted bracket rates.
Combined with federal rates, Ontario’s top marginal rate of 53.53% applies to income above $235,675. At $100,000 of employment income, the combined effective rate is roughly 30%.
What about the Ontario Health Premium?
The Ontario Health Premium (OHP) is an additional levy based on taxable income, assessed on the Ontario return:
| Taxable income | OHP |
|---|---|
| Up to $20,000 | $0 |
| $20,001 to $36,000 | 6% of income over $20,000 |
| $36,001 to $48,000 | $480 to $600 |
| $48,001 to $72,000 | $600 to $750 |
| $72,001 to $200,000 | $750 to $900 |
| Over $200,000 | $900 |
The maximum OHP is $900. It is not a medical insurance premium; it is a tax. It does not affect OHIP eligibility.
When does OHIP coverage start?
OHIP (Ontario Health Insurance Plan) coverage begins after a 3-month waiting period from the date you establish Ontario residency. During the waiting period, you are not covered by OHIP and need private insurance. The waiting period starts on the date you move to Ontario and establish a permanent address, not the date you apply for OHIP.
- Apply for OHIP at a ServiceOntario office as soon as you arrive, with proof of identity, proof of Ontario residency (lease, utility bill, or home purchase), and immigration documents. The OHIP card is issued during the waiting period, with the effective date 3 months out.
- If you are moving from a US state that had state health insurance (Massachusetts, for example), that coverage ends when you leave the state. Bridge the gap with private insurance or COBRA continuation coverage from your US employer.
What about buying a home?
Ontario charges a land transfer tax on the purchase of real property. The rates are graduated:
| Value | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Toronto Municipal Land Transfer Tax. If you buy in the City of Toronto, a second land transfer tax applies at similar rates. A $1,000,000 home in Toronto owes approximately $32,200 in combined provincial and municipal land transfer tax.
First-time homebuyer rebate. Ontario offers a rebate of up to $4,000 ($4,475 for Toronto) on land transfer tax for first-time homebuyers purchasing a property valued at $368,000 or less (the rebate reduces for higher values). If you have never owned a home anywhere in the world, you may qualify.
What about US retirement accounts?
If you are bringing US retirement accounts to Ontario, the treatment depends on the account type.
- 401(k) and traditional IRA. The RRSP has treaty protection (Article XVIII), but the 401(k) and IRA do not flow into the Canadian system. Withdrawals from a 401(k) or IRA while living in Canada are taxed in both countries (US withholding at the treaty rate of 15%, plus Canadian tax on the full amount, with an FTC for the US tax). Consider Roth conversions before the move to lock in the US tax at the lower US rate.
- Roth IRA. The Roth IRA is tax-free under the treaty if you file the one-time election on your first Canadian return. Without the election, Canada taxes the Roth growth.
- HSA. The HSA is not recognized in Canada. It becomes a regular taxable account for Canadian purposes. Consider liquidating before the move.
What should I do next?
Before the move, model both returns (the final US return and the first Canadian return) to understand the rate difference and the FTC position. Apply for OHIP on arrival. If buying a home, budget for land transfer tax. If a US citizen, set up the dual filing process and track the FTC limitation from year one.
- Moving back to Canada from the US, the general guide
- Pre-move tax planning, the planning window before the move
- Dual-status return vs full-year election, the US filing choice for the year of the move
- Moving from Ontario to Florida, the reverse direction
- Ontario probate fees, the estate-planning consideration for Ontario property
The Cross-Border Assessment is a fixed $250. You get a written, CPA-reviewed plan covering the Ontario tax rates, OHIP setup, retirement account treatment, and the FTC coordination for your first year.
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Yarik Yarosh, CPA. "Moving from the US to Ontario: What Changes on Your Taxes." Blue Cloud CPA, August 30, 2026. https://bluecloudcpa.com/guides/moving-from-us-to-ontario-taxes
This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.