Welcome to Canada!
As a newcomer, you’re probably adjusting to all sorts of things, like the weather (sorry) and the fact that Canadians tend to say sorry a lot. Next up: it’s time to talk taxes; specifically, income tax.
You might have paid income tax where you previously lived, but there’s a good chance things work a little differently in Canada. But don’t worry—it’s not hard to learn the basics. Below is all you need to know to start filing your taxes in Canada.
- Canada’s tax system is regulated by the Canada Revenue Agency (CRA), and the deadline to file taxes is April 30.
- Use the tax checklist to make sure you have all your information in one place, which will make filing taxes fast and accurate.
- File a tax return even if you have no income, as doing so will provide you with access to information and benefits.
When do I file my taxes in Canada?
Winter, spring, summer, fall… you might think there are four seasons in Canada. But there’s one more to add: tax season.
For personal taxes, or if you run a business that’s not a corporation, the income tax year matches the calendar year: January 1 to December 31. Then, the following spring, you have to do what’s called “filing your taxes” or “doing your tax return.” This means filling out an income tax return and sending it to the Canada Revenue Agency, or CRA.
Here are some deadlines to pay attention to:
- Personal income tax deadline: The personal income tax filing deadline approaches at the end of April.
- Self-employment tax deadline: If you or your spouse or common-law partner have self-employment income, the filing deadline for self-employed income falls around mid-June.
- Deadline for taxes owed: If you owe income tax to the government, you still have to pay the amount by end of April even if you don’t file your taxes until June.
- Weekend blackout: If deadlines fall on a Saturday or Sunday, the deadline gets pushed to the following Monday.
- Newcomer tax-filing date: When should newcomers file their taxes for the first time? Usually, on the filing deadline for the year when you become a resident for tax purposes. For instance, if you moved to Canada in July 2023, you would file your first tax return by end of April. You may also be able to apply for some benefits and credits earlier than that.
Note: If you file your return later than the due date, you may have to pay penalties and interest on any amounts owing.
Are you interested in saving money on your taxes? Watch our video from our tax expert, Emily, who explains three tax breaks for new Canadian residents.
What is the impact of residency on taxes?
According to the CRA, you are considered to be a resident for tax purposes when you establish significant residential ties in Canada. These ties most often happen on the date when you arrive in Canada. Examples of significant residential ties include:
- Establishing a home in Canada
- Having a spouse or common-law partner in Canada
- Having dependants (such as children) in Canada
The criteria the CRA uses to determine whether you are a resident for tax purposes are not the same as those used for permanent residence status or Canadian citizenship.
If you are considered to be a resident of Canada or a deemed resident of Canada, you should file an income tax return for either the entire tax year or the part of the tax year you’ve lived in Canada.
If you are not sure about the exact date when you officially became a resident, the CRA offers the NR74 Determination of Residency Status (Entering Canada) form, which you can complete and submit. The CRA then issues a decision letter with a date they consider you became a resident of Canada. That date would be the starting date you would use for filing your income tax return.
How do I file my taxes for the first time?
Once you are considered a resident of Canada for tax and benefit purposes, you can file your taxes for the first time. You must report your worldwide income from all sources earned to the CRA on your T1 personal income tax filing (even if you did not receive income during the year, you should file a return so that the CRA can determine if you are eligible for any benefits).
Being new to Canada, you will likely have to mail in your first income tax return to the CRA (unless you use a certified tax preparer, see below). But in future years, you can use electronic filing, if you are eligible. Once you have filed your tax return for the first time, you’ll be able to use that information to complete your registration and access CRA’s My Account, the online system that helps you track and maintain your tax information as well as communicate with the CRA.
In future, here’s how to electronically file your taxes after the first year:
- You can use TurboTax’s Full Service package and hand off your taxes to a TurboTax expert to electronically file your return.
- A certified tax preparer can use EFILE to submit your tax return online on your behalf.
- You can use NETFILE, an electronic tax-filing service, which allows you to use various approved software (like TurboTax) to submit your return directly to the CRA online.
What information do I need to file my return?
Generally speaking, to do your taxes, you’ll have to provide basic personal information, such as your full legal name, your address, and all income from the previous year (the easy stuff).
Other important things to note:
- Make sure you have applied for, and received, your Social Insurance Number (SIN), which is used to identify you for income tax and benefits.
- If you are already employed in Canada, you’ll receive a slip from each employer you worked for during that tax year. The slip is called a T4 – Statement of Remuneration Paid; you should receive it from your employer(s) by the end of February.
- If you recently arrived in Canada, you’ll need to include information about your income earned before arriving.
- If you received employment income from outside Canada after the day you relocated, you’ll need those numbers as well.
- If you have foreign assets over $100,000, you’ll need to report them on Form T1135 on your tax return.
- If you have dependants, such as a spouse, children, or elderly parents, you’ll have to provide all of their details, too.
- Credits and deductions you can claim depend on your own individual tax situation. For example, if you have child care expenses, you may be eligible to claim those on your return. If you paid medical expenses for yourself, your spouse, or your children, you may be able to claim those as well. (Make sure you have official receipts!)
- If you’re bringing any kind of assets to Canada, you will need to include details and market value on the day you arrive. Your capital gains or losses will be calculated based on this amount, if and when you sell them.
- For Québec residents, you must file a tax return with Revenu Québec as well. (Québec is the only province in Canada where you need to file two tax returns.)
- In some cases, any income you have earned from outside of Canada may be exempt from tax in Canada due to a tax treaty with your previous country. You must still report the income on your tax return. You can deduct the exempt part on line 256 of your tax return.
The only tax checklist you need
Get organized and tackle your taxes like a pro. This tax checklist tells you everything you need to file your 2023 return on time and accurately.
What are the steps for filing a tax return?
Don’t stress—it might seem like a lot, but filing taxes by yourself isn’t that hard. It all comes down to these four steps:
- Gather all the documents and information you need, as listed above.
- Choose how you’re going to file your taxes and get prepared. If you want to mail your tax return, request a copy of the paper filing package from the CRA. If you’re a first-time filer, TurboTax can also be used to prepare and print a return to mail in.
- Work through your tax return, filling out the forms step by step. If you’re working on paper, be sure to double-check your math! If you’re doing your taxes online or with an accountant, make sure they’ve included all your income, deductions, credits, and expenses.
- Send in your tax return by the deadline. Once the CRA has processed your return, you’ll receive a Notice of Assessment, which outlines their conclusions and gives you important information on your tax situation; it also lets you know whether you owe money or will receive a refund. Keep this document somewhere safe—you’ll need it again in the future.
How do I declare foreign income?
Any income you earned before you arrived in Canada is not subject to Canadian taxes. However, once you are a Canadian resident, for tax purposes you have to declare all income from anywhere in the world on your tax return.
If you declare foreign income on a Canadian tax return:
- Indicate the country the funds came from.
- Declare the full amount of any income (that is, the amount before foreign taxes were withheld).
In some cases, income you earned from a country other than Canada may be exempt from tax in Canada due to a tax treaty. But you must still report the income on your tax return. You can deduct the exempt part on line 25600 of the form.
How do I declare foreign property?
When you’re a Canadian resident, you have to report any foreign property you own that has an adjusted cost base above $100,000 at any period during the year. This includes bank accounts, stocks, bonds, and real estate. You make the declaration on Form T1135, Foreign Income Verification Statement.
Do refugees pay taxes in Canada?
Yes, refugees pay taxes in Canada. As a refugee, the amount of income tax you pay depends on how much money you make, as well as where you live and any deductions or credits you might have.
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