Who Must File Canadian Income Taxes?

In Canada, most individuals are required to file an income tax return if they earned income in 2024 and maintained some form of residence in the country. This includes many temporary residents such as foreign workers, international students, and certain visitors who may still be considered Canadian residents for tax purposes.

Who is Considered a Tax Resident of Canada?

Your tax residency status is determined by your personal and residential ties to Canada. Key residential ties include:

• A home in Canada
• A spouse or common-law partner in Canada
• Dependents living in Canada

The Canada Revenue Agency (CRA) also considers secondary ties, such as:

• Personal property (e.g., car, furniture)
• Social connections (e.g., memberships in clubs or religious organizations)
• Financial ties (e.g., Canadian bank accounts, credit cards)
• Health insurance in a Canadian province or territory
• A driver’s license or Canadian passport

While your immigration status does not directly impact your tax residency status, if you live primarily in Canada, you are likely considered a resident for tax purposes. As a resident, you are subject to taxation on your worldwide income.

For more information on determining your residency status, you can consult the CRA’s Income Tax Folio S5-F1-C1, Determining an Individual’s Residence Status or contact them at 1-800-959-8281.

Who Must File a Tax Return?

If you’re deemed a resident of Canada for tax purposes, you are legally required to file a tax return in the following circumstances:

• You have to pay taxes.
• You earned more than $3,500 in the year.
• You sold or disposed of capital property, including your principal residence.
• You realized a taxable capital gain.
• You need to repay Employment Insurance (EI) benefits.
• You withdrew from a Registered Retirement Savings Plan (RRSP) under the Home Buyers’ Plan or Lifelong Learning Plan and haven’t fully repaid it.
• You are paying EI premiums on self-employment income or other eligible earnings.
• You need to repay Old Age Security (OAS) benefits.

If none of these situations apply, you may not be legally obligated to file, but there are several reasons you might want to do so.

Reasons to File Even if Not Legally Required

Filing a tax return can unlock several benefits, even if you’re not obligated to file. These benefits include government credits and subsidies, some of which are only accessible through tax filings. Here are a few examples:

1. Canada Carbon Rebate

Eligibility: Individuals 19 years or older, residing outside of BC or Quebec.
Amount: $380 – $900 (varies by province).

2. Canada Child Benefit (CCB)

Eligibility: Individuals with children under 18 (including temporary residents who’ve lived in Canada for 18 months).
Amount: Up to $7,787 per child under 6 years; $6,570 per child aged 6-17.

3. Canada Workers Benefit (CWB)

Eligibility: Low-income workers (aged 19 or older, excluding full-time students).
Amount: Up to $1,590 (single) or $2,739 (family).

4. GST/HST Credit

Eligibility: Individuals aged 19 or older.
Amount: Up to $519 (single) or $680 (married).

These are just a few examples; other credits and benefits may also be available depending on your circumstances. First-time newcomers to Canada can also apply for these benefits in their initial year.

How to File Your Canadian Income Tax Return

You can file your tax return in two main ways: on paper or online. The majority of Canadians opt for online filing using specialized tax software. You can either prepare your tax return yourself or hire a professional tax preparer. Additionally, volunteer tax clinics are available for those seeking assistance at no cost.

While it’s possible to file taxes on your own, many Canadians prefer professional help due to the complexity of the tax system. Knowing how to navigate the system effectively can help you reduce your tax burden and maximize potential refunds.

Conclusion

Filing taxes in Canada is a legal obligation for residents and temporary residents with specific income or financial activities. Beyond fulfilling a legal requirement, filing your taxes can also help you access valuable government benefits. If you’re unsure about your tax residency or filing obligations, consider reaching out to the CRA or seeking help from a tax professional.

For a consultation about Immigration options, reach out to the CAD IMMIGRATION today!