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New to Canada and filing your first tax return?
As a newcomer, filing your income tax return for the first time in Canada may be intimidating. You’re not alone if you feel this way. Many people dread “tax season.”
But there’s good news: Unless your finances are complicated, filing your taxes in Canada can be simple and straightforward.
This guide will take you through the basics of how to file your first income tax return in Canada.
We will walk you through how it works
If you’re a newcomer or resident of Canada for income tax purposes, you’ll need to file tax returns for any tax year in which you have to pay taxes.
Federal and provincial personal income tax returns in Canada are administrated by the Canada Revenue Agency (CRA). If you are a resident of Quebec, you need to file a separate provincial personal tax return.
You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada. These include if you have:
- A home in Canada
- A spouse or common-law partner in Canada
- Dependents in Canada
According to the CRA, you usually establish residential ties on the date you arrive in Canada.1
Do you have to file a tax return?
You may have to file a personal income tax return even if you’ve only been in Canada for part of the year.
File a return if you:
- have to pay tax for the year
- want to claim a refund
- want to get benefits and credit payments
What you need to file a tax return
Here’s what you’ll need to file your tax return. First, you’ll need to provide basic information, such as your name and address. Among others, you will also need the following information.
Social Insurance Number (SIN)
A SIN is a nine-digit number that’s used to access government programs and benefits. Your SIN is not the same as a temporary tax number (TTN) or an individual tax number (ITN).
If you are employed in Canada at any time during the tax year, your employer will issue you a T4 slip. This slip outlines your total remuneration and deductions for the year (such as EI, CPP, and income tax withheld).
If you have investment income, you may receive a T5 slip and or a T3 slip.
If you are self-employed, you will need to keep business receipts and invoices to accurately report your income and claim deductions. It is important to keep these receipts in case CRA has any follow-up questions.
These are receipts for childcare expenses incurred to have someone look after an eligible child so that you can work or study.
If you have dependents, such as a spouse, children, or elderly parents, you’ll need to provide information details about them in your tax return. You may be eligible for certain tax credits.
If you owned property before your arrival in Canada
There are rules that apply to the property you owned before you immigrated to Canada, such as shares, jewelry, or artwork. Under these rules, this property is deemed to have been sold and reacquired by you for its fair market value on the date you became a Canadian resident.
You’ll need to keep a record of this fair market value because you’ll need this information to determine any taxable gain or loss if you dispose of the property in the future.
When you need to file your return
Unless you’re self-employed, you must file your tax return for any tax year by April 30 of the following year. If April 30 falls on a Saturday, Sunday, or holiday that year, returns will be considered filed on time if the CRA receives them or they are postmarked on the first business day following April 30. This means for the 2022 personal tax return, you need to file your return on or before May 1, 2023.
If you’re self-employed, the due date for your personal return is June 15 of the following year. But if you owe any taxes for the tax year, that amount must be paid by April 30.
How to file your tax return
There are three different ways to file your return:
- EFILE. If you had an accountant or tax preparer prepare your tax return, they’ll likely file your return electronically using EFILE.
- NETFILE. Certain brands of tax software allow you to file your return electronically using NETFILE.
- Mail. You can mail a paper return to the CRA. You will be deemed to have filed the return on the postmarked date.
If you need help completing and filing your return, meet with a tax professional or tax filer. You may also be able to get assistance and tax tips from free tax clinics run by the Community Volunteer Income Tax Program (CVITP).