Treaty tie-breaker rules are the provisions in a tax treaty that assign a single country of residence to a person who would otherwise be a resident of both countries under their domestic laws. In the Canada-United States tax treaty, the tie-breaker for individuals appears in Article IV and applies a sequence of tests until residency is resolved in one country.
The tests are applied in order: where the individual has a permanent home; if a home is available in both countries, where their centre of vital interests lies; then where they have a habitual abode; then citizenship; and finally resolution by the two tax authorities. The analysis is fact-driven, and contemporaneous evidence of ties such as home, family, and economic connections is central. The rules are frequently engaged when a person moves between Canada and the United States or maintains significant connections to both.