If your child doesn’t have a Social Insurance Number, it’s virtually impossible to file a tax return. It’s a good idea for parents to apply for a Social Insurance Number as soon as their child is born. That way, parents aren’t left scrambling later on when their son or daughter gets their first job.
Applying for a SIN
If your child intends to work in Canada someday, it makes a lot of sense to apply for a SIN. There’s no reason not to apply – it’s free. If you live in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island or Quebec, you can expedite your child’s application for a SIN with the Newborn Registration Service. Your child won’t be able to file their income tax return later on without one.
Why Should Your Child File a Tax Return?
Without a SIN, your child won’t be able to file their income tax return and collect tax credits.
Even if your child didn’t earn any income or very little, it makes sense for them to file a return. Here’s why: Although they may not be able to take advantage of Non-Refundable Tax Credits like the basic personal amount, there are other tax credits and benefits they may be able to obtain. This article from TurboTax explains some of those credits and benefits: I didn’t make much this year and don’t owe. Should I file?
When a child is 18, they should file a tax return even if they have no income so they can receive the quarterly GST/HST credit. CRA will issue the GST/HST benefit payment on the first cheque issue date after they turn 19. For example, the quarterly payments are issued in January, April, July and October. If the child turns 19 in September, they should receive the next GST/HST cheque issued in October.
If you’d like to lend your child a helping hand saving towards their education, a Registered Education Savings Plan (RESP) is a great way to do just that. You won’t be able to open an RESP if your child doesn’t have a SIN. The Government has two other programs that will contribute funds to an RESP, so your child will need a SIN to take advantage of the Government contributions.
- The Canada Learning Bond (CLB) is money that the Government adds to an RESP for children from low-income families. No personal contributions to the RESP are needed to receive the funds.
- The Canada Education Savings Grant (CESG) is a program that requires some personal contributions to the RESP, and you may qualify for the regular and additional grant.
What Your Child Should Know
If your child has earned income, they must file a tax return. But before they can work, they must have a SIN.
There are many tax deductions and credits that might be missed by young people, including charitable donations and medical expenses. If your child plans to move away to attend college or university they may be able to claim moving expenses. If they live in a student residence, they might be able to claim student rent, depending on the province where they go to school. Speaking of school, your child can also claim a tax credit for tuition and if they aren’t able to fully use their tuition credits, they can transfer it to you. Again, your child must have a SIN to take advantage. Without one, those tax credits will go to waste.
Non-Residents Can File, Too
If your child is considered a non-resident, they can still file a tax return, but they’ll need an Individual Tax Number (ITN). Your child doesn’t need an ITN if they’re able to obtain a SIN. If they’re applying for an ITN for the first time, they’ll need to fill out a T1261 Application for a Canada Revenue Agency Individual Tax Number for Non-Residents.
Why would you want to file this form?
Your child can apply to waive or reduce Canadian withholding tax on any income they earn. If they’re an international student going to college or university in Canada, for example, they could file a tax return with an ITN and receive a tuition deduction.
If you have a simple tax return and are filing to keep your benefit payments active, why not try filing for free with TurboTax Online Free, a no-charge edition of our software? Or, you can start your return using Free, and if you feel the need for additional assistance, you can upgrade to any of our paid editions or even get Live help from an expert. But don’t worry, while using TurboTax Online, when you choose to upgrade, your information is instantly carried over so you can pick up right where you left off.
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