(Explained by a CPA in Ottawa) What Is CRA Form RC687? Provincial Residency Examination

If you’ve received CRA Form RC687 – Provincial Residency Examination, don't panic.

CRA sends this form when they question your province of residence on December 31st of the tax year. This matters because each province has its own tax rates and credits, and CRA wants to make sure you didn’t claim residency in a lower-tax province without genuinely living there.

Form RC687 is triggered when something in your tax return doesn’t match CRA’s expectations based on your address, income, or life situation. This could include:

• Filing with an address in a province where you have no family, job, or lease
• Recently moving across provinces but not updating all personal or financial records
• Drastic differences from prior year tax filings
• A mismatch with CRA’s third-party data (e.g. T4s, tuition slips, property records)

Reference:

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CRA has been sending out more of these audit-style questionnaires in recent years. See full list of review forms here at VideoTax News and Knowledge Bureau's summary.

What the Form Asks

The RC687 form asks you to prove where you were actually living on December 31 of the tax year. CRA wants documentation like:

• Lease agreements or property ownership
• Utility bills
• Government-issued ID with your address
• Employment records
• Location of spouse and children
• Health care registration
• Drivers license and vehicle registration
• Banking and mailing addresses

If your ties to the province you claimed are weak (or non-existent) CRA may deny your residency claim and reassess your taxes under your previous province.

Real Example From a Client File

A client tried to claim they moved from Ontario to Alberta in July to take advantage of Alberta’s lower tax rates (Alberta has no provincial income tax above the federal).

He spent about 6 months sleeping on a friend’s couch in Calgary and changed his mailing address to Alberta, but:

• His spouse and children stayed in Ontario
• His driver's license and OHIP remained in Ontario
• He had no lease, no Alberta ID, and no proof of daily life there
• His work was remote, but his employer’s T4 still showed Ontario

CRA flagged the change automatically and sent Form RC687. He had nothing substantial to prove Alberta residency, no tenancy agreement, no Alberta health coverage, and no utility bills. CRA denied the change and reassessed him as an Ontario resident.

Sleeping somewhere temporarily is not enough. CRA cares about your “primary ties” where your family, home, and legal life are based.

Key Takeaways

• You must live in a province with enough evidence to prove it. It’s not just where you are physically, it's where your life is centered.
• Changing your mailing address is not enough.
• Moving in the middle of the year doesn’t matter for taxes. it’s your province on December 31 that counts.
• CRA has access to your T4s, health records, and prior returns, they can easily cross-check.

What to Do If You Get This Form

1. Do not ignore it. a reassessment is coming if you don’t respond properly.
2. Gather documentation, proof of where you lived and where your significant ties were.
3. Get a professional to respond, an experienced CPA can prepare the response with the right tone, documents, and explanation.

Final Word

If you’re trying to change your tax residency for provincial tax savings, be prepared to back it up with documentation. CRA has caught on, and the RC687 form is one of the many ways they’re reviewing claims more closely.

If you've received this form, or are planning a provincial move, I can help assess whether your situation holds up under CRA scrutiny.

As a CPA in Ottawa, I handle CRA reviews and tax filings for clients across Canada, including physicians, digital workers, and content creators, many of whom move between provinces and want clarity on the rules.

Need help responding to CRA’s RC687? Reach out before responding.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194

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