Determining Whether You Are Required to File
International students are required to file a tax return if they owe taxes or if they want to claim a refund or credits.
Since Canadian-earned income is always taxable in Canada, employment with a Canadian company is a clear indication that you should file a tax return, for both a residents and non-residents. As such, international students employed in Canada may find themselves either owing tax or being owed a tax refund.
Credit and benefit eligibility as an international student depends on residency status, which in turn is based on several factors.
Claiming Benefits and Credits
Students who have established significant residential ties to Canada can be considered residents of Canada. Significant residential ties include a home, whether owned or rented, a Canadian bank account or driver’s license, living with a spouse or dependants, or other significant social ties to Canada.
Students who spend less than 183 days (six months) in Canada, and who do not establish residential ties in Canada, are generally considered to be non-residents. Non-residents are not eligible for benefits and credits, and are only required to file a tax return to pay taxes or to receive a refund if too much tax was paid on income from Canadian sources.
This also applies to deemed non-residents, who are students who have established significant residential ties with Canada, but are considered residents of other countries with which Canada has a tax treaty agreement.
Residency status is determined by the Canada Revenue Agency (CRA) on a case by case basis. If you aren’t sure of your status, it is best to contact CRA directly for guidance.
Filing a Tax Return
The first step to filing a tax return is to obtain a Social Insurance Number from Service Canada, or an individual Tax Number from the Canada Revenue Agency.
Canadian residents should then complete their tax return with the General Income Tax and Benefit package of the province in which resided on Dec. 31 of the tax year. Complete the return by stating your income from both Canadian and international sources. As a resident, you will be taxed on income from all sources, but you will be able to claim any taxes paid to a foreign government as a foreign tax credit. Non-residents and deemed non-residents will complete an income tax package specifically for non- and deemed non-residents.
Finally, keep in mind that, as a student, you are eligible to claim tuition credits using the T2202/T2202A form, which is given to you by your school.