The following instructions are taken from the form.
Information on Form T3MJ, T3 Provincial and Territorial Taxes for 2023 – Multiple Jurisdictions
Provincial or territorial income tax relating to business income is generally payable to the province or territory where the permanent establishment generating that income is situated.
There are situations where, at the end of the year, a trust resides in a province or territory of Canada, but all or part of the trust's business income for the year was earned and is allocated to permanent establishments outside that province or territory of the trust's residency, or outside Canada. If this is the case, the trust has to determine the part of its total provincial or territorial tax that is payable to the jurisdiction where it resides and to the other jurisdictions in Canada. In such cases, complete Form T3MJ, T3 Provincial and Territorial Taxes – Multiple Jurisdictions, do not complete the provincial or territorial T3 form applicable to the trust's residency.
The same rules apply if the trust was a non-resident of Canada throughout 2023 and it carried on a business in more than one province or territory in Canada.
Tax and multiple jurisdictions
When tax is payable to multiple jurisdictions, provincial or territorial tax rates are applied to the taxable income from all sources. Certain credits, such as the provincial dividend tax credit, are only allowed if the trust resides in the province. Other credits may be prorated. From this, a basic provincial or territorial tax is calculated. The basic tax is then prorated by applying the percentage of income allocated to that province or territory.
Form T3MJ accommodates this calculation for the province or territory of residence of the trust and for all jurisdictions where business income was earned.
Form T3MJ
There are four parts to Form T3MJ. Complete and attach to your tax return only the parts of this form that apply to you.
Part 1 – Allocating income to multiple jurisdictions
Common to all, complete in all cases.
Part 2 – Federal surtax on income the trust earned outside Canada, and refundable Quebec abatement
Complete if income is allocated to "Other" or to Quebec.
Part 3 – Provincial or territorial tax (multiple jurisdictions)
Complete this part for each province and territory (except Quebec) that you have income allocated to.
Part 4 – Provincial or territorial taxes summary
Complete this part to summarize your total provincial and territorial taxes (except Quebec).
Form T3MJ and Taxprep for Trusts
Parts 1, 2 and 4 in Form T3MJ, Provincial and Territorial Taxes – Multiple Jurisdictions (Jump Code: T3MJ) are accessible from the Form Manager in Taxprep for Trusts. Part 3 is divided in twelve forms, i.e. one for each province and territory (except for Québec). The jump code for each of these forms is made up of MJ and of the province or territory code (e.g. MJ BC for British Columbia).
The Québec tax calculation for a trust in a multi-jurisdictional tax situation is performed in the Québec Multiple Jurisdiction Workchart (Jump Code: QMULT) or in Form TP-750, Income Tax Payable by a Trust Resident in Québec That Carries On a Business in Canada, Outside Québec, or by a Trust Resident in Canada, Outside Québec, That Carries On a Business in Québec (Jump Code: Q750).
Please also note that, in the event where a trust residing outside Québec earns income from Québec sources and where all income is allocated to the beneficiaries, you should enter the allocation of income sources of the trust in Form T3MJ in order for the Québec Trust Income Tax Return (TP-646) to become applicable.
You must file a TP-646 return even if the trust has no income tax payable.