New to Canada? Here is what you need to know when filing your tax return.
Firstly, welcome to Canada! As one of over 300,000 newcomers that immigrated to Canada last year (and there are over 600,000 expected in the next couple of years), there are a few things you need to know. You can expect there to be friendly faces everywhere you look, hockey being played in suburban streets, universal health care and of course our harsh winters. Unfortunately, harsh winters aren’t the only downside, there are also taxes.
It can be a challenge to know which credits and deductions to claim for anyone, let alone when it’s your first time. Fear not new Canucks, there are a lot of benefits to filing taxes, and new Canadians qualify for the same tax credits and deductions as those who are Canadian citizens.
So you’re Canadian now, eh?
Many of your tax obligations are based on your residency status in Canada. Official residency, as determined by the Canadian Revenue Agency (CRA), is when you establish significant residential ties to Canada. Significant residential ties are as simple as having a home, a spouse or children. However, secondary ties, such as a driver’s license, health insurance and personal property such as cars or furniture may also be factored in.
Newcomers to Canada include protected persons, individuals who have applied for or received permanent residency status from Citizenship and Immigration Canada, or individuals who have received approval in principle to stay in Canada.
You also need to obtain a Social Insurance Number (SIN), which you can get from Service Canada so you can file your tax return to get tax credits and benefits as offered provincially and federally.
The reason for the (tax) seasons.
There are many tax deductions and credits you can claim, and all will depend on your unique situation. Although you will need to report any income earned, even if you didn’t have income during the year you may be eligible for benefits.
It can get confusing figuring out what to do but there are some key credits as a first timer you should be on the lookout for.
• Setting roots in Canada: New Canadians may be able to claim the First-Time Home Buyer’s Tax Credit on their first home in Canada. It’s a $5,000 tax credit that can help to offset costs of moving from a new country. You may not be eligible for this amount if you owned a home in the previous five years, regardless of whether it was in Canada or not.
• Canadian kids: New residents who have children under eighteen may qualify to receive the Canada Child Benefit (CCB). This is a tax-free monthly payment for families to help them offset the cost of raising children (and starting a new life in Canada). The payment varies based on the age of the child and the overall income of the family.
• Canada isn’t your only home: In Canada, residents must report all income they earned from anywhere in the world when filing their taxes. However, income from another country may be exempt from Canadian tax or subject to special tax treatment if Canada has a tax treaty with the country in which they earned income. Canada currently has tax treaties with nearly 100 different countries.
• Take credit where credit is due: Newcomers should apply for the GST/HST credit, which is a tax-free quarterly payment. Even those who think their income is above the qualifying limit should apply, because if their income changes, they could be entitled to it. If they meet the requirements, the payment is determined by what they earned the previous year.
Know your (Oh) Canada dates.
It’s always a good idea to note important dates, especially for a new Canadian, as it can get confusing when everything is happening. As a small gift in your Canadian journey, your new friends at H&R Block have you covered.
• Getting your GST/HST credit:
o The credit arrives quarterly, and you should receive your payments during the first two weeks of April, July, October and January.
• Child benefit:
o This benefit is monthly, and you will typically see it arrive midway through the months.
• Deadlines to file:
o April 30, 2019 will be the deadline for most tax returns. If you owe anything, you must pay by this date or you will be charged interest.
o The one exception is for those self-employed. The self-employed file-by date is June 15, 2019.
As you go forth in your new Canadian lives enjoying Tim’s coffee or trying out the local maple syrup, remember if you ever need help you can always talk to an H&R Block Tax Expert. For more information, find an office near you, or get an expert review with our tax software.