A Guide to Tax Return for new Immigrants to Canada

by Immigration Team March 7, 2023

written by Immigration Team March 7, 2023 0 comments

If you are a newcomer to Canada, it’s important to understand the basics of Canadian tax returns to ensure that you comply with tax laws and regulations. Here are some key things you need to know:

Tax residency: As a newcomer to Canada, it’s important to determine your tax residency status. Your tax residency status will determine whether you are required to file a Canadian tax return and report your worldwide income. If you are a resident of Canada for tax purposes, you must report your worldwide income on your tax return. If you are a non-resident for tax purposes, you only need to report income earned in Canada.
Filing deadline: The deadline to file your tax return is April 30th of the following year. If you or your spouse or common-law partner carried on a business in Canada, the deadline is June 15th, but any balance owing is still due by April 30th. It’s important to file your tax return on time to avoid penalties and interest charges.
Social Insurance Number (SIN): You will need a SIN to file a tax return in Canada. If you do not have a SIN, you can apply for one through Service Canada. You will need to provide proof of identity and status in Canada, such as a work permit or permanent resident card.
Forms: The main form for filing a tax return in Canada is the T1 General form. The form is used to report your income, deductions, and credits for the year. You can file your tax return electronically using NETFILE or by mail. If you are filing your tax return for the first time, it may be helpful to get assistance from a tax professional or use tax preparation software.
Tax deductions and credits: As a newcomer to Canada, you may be eligible for certain tax deductions and credits. For example, if you have children under the age of 18, you may be eligible for the Canada Child Benefit, which is a tax-free monthly payment. You may also be eligible for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit, which is a tax-free quarterly payment to help offset the cost of the GST/HST. Make sure to review the available tax deductions and credits to see if you qualify.
Income tax rates: Canada has a progressive income tax system, which means that the more you earn, the higher your tax rate. Make sure to check the current federal and provincial tax rates to ensure that you are paying the correct amount of tax. The tax rates may vary depending on your income level, so it’s important to review the rates for your specific situation.
Filing taxes for previous years: If you are a newcomer to Canada and have not filed taxes for previous years, it’s important to do so as soon as possible to avoid penalties and interest charges. You can file your tax return for previous years using the same T1 General form. If you need assistance, you can contact the Canada Revenue Agency (CRA) or consult with a tax professional.

Overall, filing a Canadian tax return as a newcomer can be complex, but it’s important to understand the basics to ensure compliance with tax laws and regulations. Make sure to review the available tax deductions and credits, and consult with a tax professional or the CRA if you have any questions or concerns.