Are you an international student studying in Canada? If so, you need to be aware of certain tax filing requirements to make sure you remain compliant with Canadian tax laws. Filing your taxes correctly is essential for avoiding any potential penalties, so it’s important to understand the rules and regulations governing international student tax filing in Canada.
To begin, you must determine your residency status. If you have been in Canada for 183 days or more, you are considered a Canadian resident for tax purposes. This means that you are required to pay taxes on all the income you earn in Canada, regardless of the source of the income. On the other hand, if you have been in Canada for less than 183 days, you are considered a non-resident and must file your taxes in your home country.
Once your residency status is established, you must determine how to file your taxes. Generally, international students are required to file a Canadian tax return if they are considered a resident of Canada. Filing a tax return is the process of sending a completed form to the Canada Revenue Agency (CRA), which is the federal government body responsible for collecting taxes. It’s important to note that filing a tax return is different from paying taxes, as the CRA will determine the amount of taxes you owe based on the information you provide in your tax return.
When filing a tax return as an international student, you must make sure to include any income you earned in Canada, such as wages from employment, scholarships or bursaries, and other sources. You may also be eligible to claim deductions, such as tuition and education credits, to reduce the amount of taxes you owe. Furthermore, if you have a spouse or common-law partner, you may be able to benefit from tax credits or deductions that are available to couples.
Finally, it’s important to remember that filing a tax return is a time-sensitive process, as there are deadlines that must be met. If you miss the deadline, you may be subject to fines and other penalties. To make sure you don’t miss your deadline, it’s a good idea to start preparing early and ensure that all your documents are in order.
Filing taxes as an international student in Canada may seem complicated, but it’s important to be aware of the requirements and take the necessary steps to remain compliant with the law. By understanding the rules and regulations governing international student tax filing in Canada, you can make sure you don’t miss any deadlines and avoid any potential penalties.
International students are encouraged to file a tax return even if they don’t have any income. The Canada Revenue Agency (CRA) has a list of reasons why you should file a tax return.
Most international students completing a degree in Canada on a study permit are considered residents of Canada for income tax purposes; however taxes are based on an individual’s specific circumstances. It’s very important that you consider the significance of your residential ties to Canada and determine your residency status prior to submitting an income tax return.
For more information about Canadian taxes, please see filing an income tax return as a student on the Government of Canada’s website or contact the Canada Revenue Agency (CRA).
The tax year runs from January to December each year and the deadline to file an income tax return is April 30 of the year after.
Whether you hire an accountant or complete your own tax return, you’ll need to prepare the following documents (if applicable):
Student Financial Services also has information on tax receipts and where to find them.
Residents of Canada are required to indicate any income earned from both inside and outside of Canada. If you worked in another country, your income tax return, including residency status for tax purposes, could be impacted by a tax treaty.
Once you’ve submitted an income tax return, you should receive a response from the CRA in the form of a notice of assessment. Keep any correspondence you receive from the CRA in a safe place for your records.
Once you’ve filed at least one income tax return, received one notice of assessment, and have a valid Social Insurance Number (SIN), you can create a MyAccount on the CRA website. Your account allows you to receive correspondence from the CRA electronically, set up direct electronic bank deposits for any refunds or benefits you may receive, and keep your personal information, address and banking information up-to-date with CRA.
You can attend the free AFSA Tax Clinic in March held by the Accounting and Finance Student Association (AFSA) at Waterloo to have a volunteer complete your income tax return for you. You need to bring them the documents listed on the website and meet their requirements to attend.
Pay an income tax professional or accountant to complete your income tax return for you. If you would like a professional tax preparer to do your income tax return, you can search online for a reputable firm in the city. Make sure you verify that the professional you’ve chosen has experience filing tax returns for international students. Or you can use the Community Volunteer Income Tax Program (CVITP) or other free tax clinics in Waterloo Region and have a volunteer complete your income tax return for free.
You can use tax preparation software to complete and submit your own income tax return online. The CRA website has a list of tax preparation software that you can use. If you’re filing for the first time and/or don’t have a Social Insurance Number, you must print out, sign, and mail your income tax return to the CRA with all of your supporting documents.
Join a representative from the CRA for our annual Filing Your Taxes in Canada information session. You’ll learn the basics of how to file your own income tax return and understand more about the Canadian tax system. This session is open to undergraduate and graduate international students. Please note that sessions are held during the end of winter term every year.
Join the Graduate Student Association (GSA) for free income tax aid. Free consultations are available to graduate students in March and April of each year. You can book a free appointment with the Graduate Student Association (GSA) accountant. The accountant will not complete your income tax return for you, but can help you understand how to complete the forms and answer questions.
Deductions: Your income can be reduced to a lower tax bracket by deducting the amount you paid into pension plans, registered retirement savings plans (RRSP), union and professional dues, child care expenses, and other deductions. Moving expenses may be claimed against certain income if you moved for work purposes only and meet other conditions.
Non-refundable tax credits: Residents of Canada receive a basic personal amount of non-refundable tax credits. Tax credits can help reduce the amount of tax that you’re required to pay. You may therefore receive a refund from CRA of the income tax already deducted from your pay. If you were not taxed enough initially, you may be required to pay additional taxes.
If you didn’t have any income in the tax year you’re filing, you most likely have no reason to claim tax credits, other than your tuition fees (as these can carry forward to a future tax year) and rent paid for the Ontario trillium benefit.
The GST/HST credit is paid to individuals with low or modest incomes to help offset part of the GST/HST paid on the purchasing of goods and services. You can complete the Credit Application for Individuals who become Residents of Canada the first year you become a resident of Canada. You can then apply for the GST/HST credit when you file your income tax return each year.
The Ontario Trillium Benefit is paid to individuals with low or modest incomes, who are residents of Ontario, to help offset part of the Ontario sales tax on goods and Ontario property tax or rent paid.
The Canada child benefit is a tax-free monthly payment made to eligible families to help them with the cost of raising children under the age 18.
See the CRA website for an overview of all child and family tax benefits and other tax benefits you may be eligible for based on your situation.
The tax year runs from January to December each year and the deadline to file an income tax return is April 30 of the year after. If you miss the April 30 deadline, you can still submit a late income tax return. However, there could be daily interest charges and a late penalty if you owe the government taxes.
Resource: University of Waterloo Website
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