Tax in Canada
If you are in Canada as an international student, it is important that you understand what your rights, entitlements, and obligations are under Canada's tax system. It is your responsibility to determine your income tax status, and make sure to pay your required amount of taxes for each year according to the law.
Generally, you must determine your final tax obligation to Canada by completing an income tax return and sending it to Canada Revenue Agency. On the return, you list your income and deductions, calculate federal and provincial or territorial tax, and determine if you have a balance of tax owing for the year, or whether you are entitled to a refund of some or all of the tax that was deducted from your income during the year.
Common information slips received by students
The following information slips are usually distributed to you in February of each year and should be included in your tax return:
-
T4 - Employment income and deductions for the calendar year.
-
T5 - Interest you received from financial institutions. Some banks only provide a T5 for interest over $50. Contact your financial institution for a copy.
-
T2202A - Education deduction form that identifies the number of months you attended university during the calendar year and the tuition you paid.
Documents that should be included in your tax return application
-
Social Insurance Number (SIN) or, if you are not eligible for a SIN, your Individual Tax Number (ITN) form.
-
Your banking information or a void cheque
-
Information slips
-
Rent receipts (available from your landlord)
-
Receipts for donation to a charity
-
Any medical receipts
-
Proof of monthly public transportation costs
-
Any correspondence from the Canada Revenue Agency (CRA) if you have filed taxes in Canada before.
International Students and Income Tax
Canada Revenue Agency has produced a series of informational videos for international students.
Q: As an international student, do I have to file an income tax and benefit return?
A: It depends on your situation. You must file a return if you have to pay tax or if you want to claim a refund. Other situations can also apply. To get a more detailed list of situations where you have to file a return or when you may want to do so, go to the CRA's webpage called Do you have to file a return?
Q: I'm an international student and I have to file a tax return. How do I calculate the taxes I owe?
A: You have to fill out an income tax and benefit return and send it to the CRA. On the return, you list your income and deductions, calculate federal and provincial or territorial tax, and figure out if you owe taxes to the government for the year, or if you are entitled to a refund of some or all of the tax that was deducted from your income during the year.
Q: Let's say I'm an international student who is a resident for tax purposes and I don't have to file a tax return. Are there any situations where I should file a tax return?
A: Yes, in some cases there are. For example, you need to file a return if you want to apply for the GST/HST credit or any related provincial credit or if you, your spouse, or common-law partner want to receive the Canada child tax benefit payments.
You may also want to carry forward or transfer the unused part of your tuition, education, and textbook amounts, report income for which you could contribute to a registered retirement savings plan, or claim the working income tax benefit.
Q: When do I need to file or send my income tax and benefit return?
A: A tax year, like a calendar year, ends on December 31st. You have until April 30th of the following year to file your income tax and benefit return and pay any taxes you owe.
There is one exception. If you or your spouse or common-law partner are self-employed, your return must be filed on or before June 15th. Keep in mind that if you owe any taxes, you still have to pay any amount due by April 30th.
If you don't file on time, or don't pay your taxes owing on time, you could be charged penalties and interest.
Q: Some international students may have been in Canada for a few years but are just now learning that it may be beneficial for them to file a return. Can they still file their previous year's returns?
A: Generally, an individual has three years from the end of the tax year to file a return and to claim a refund.
However, there are some exceptional situations that may allow you to file after the three-year deadline. For more information, see the CRA's Income Tax Information Circular IC07-1 - Taxpayer Relief Provisions.
Q: As an international student, which income tax and benefit package should I use?
A: That depends on your residency status and the income that you are reporting. We discuss the different residency statuses in the segment of this video called Residency and why it's important.
As an international student, you will either use the general income tax and benefit package for the province or territory where you lived on December 31st, or the income tax and benefit package for non-residents and deemed residents of Canada.
Q: Let's say I'm an international student who was a resident of Canada for tax purposes for the whole year. Which tax package should I use?
A: If you were a resident of Canada for a full year, use the general income tax and benefit package for the province or territory where you lived on December 31st.
Q: What types of options do I have for filing my return as a resident of Canada for tax purposes?
A: If you'd like to prepare your return yourself, you can file your return online using one of several tax preparation software packages available for a fee or, in some cases, free of charge. You can find a list of NETFILE certified software at www.netfile.gc.ca/software.
You can also file a paper copy of your return by mailing it to your local tax centre. You can download and print a copy of the tax package from the CRA website or, if you are using the general package, you can pick up a copy at any Canada Post location from February until May.
You can also have a tax professional help you prepare and file your return online.
Whether you prepare your return yourself or have it prepared by a tax professional, remember that filing online means that you get your refund faster. The CRA webpage called Sending a tax return lists all the filing options available to you.
Q: Let's say I am an international student who recently arrived in Canada and became a resident of Canada during the year. Which tax package would I use?
A: As a newcomer to Canada, you use the general income tax and benefit package for the province or territory where you lived on December 31st. Have a look at pamphlet T4055 Newcomers to Canada, for other filing options available to you.
Q: What if I am an international student who is a deemed resident of Canada?
A: Use the income tax and benefit package for non-residents and deemed residents of Canada.
You'll find a complete list of filing options for deemed residents in CRA Guide 5013-G - General Income Tax and Benefit Guide for Non-Residents and Deemed Residents of Canada. See the heading called “How to file your return,” which is in the Refund or Balance owing section of the guide.
Q: Let's say I'm an international student who is a non-resident of Canada for tax purposes. Which tax package do I use?
A: If you are a non-resident of Canada, the type of income you earn affects which return you need to file. Generally, you use the income tax and benefit package for non-residents and deemed residents of Canada. However, if you are only reporting income from employment in Canada, use the general income tax and benefit package for the province or territory where you earned the income. You'll also have to include a schedule D.
It's also good to know that if you're considered a non-resident for income tax and benefit purposes and don't have any taxable Canadian income, you can't file a return for the sole purpose of carrying forward the tuition, education, and textbook amounts. The CRA webpage called Exceptions lists all the situations where a non-resident might file a different return.
Q: What filing options are available for non-residents?
A: All the filing options can be found in Guide 5013-G under the heading “How to file your return.” Returns filed by non-residents are processed by the International Tax Services Office.
Q: Let's say I'm an international student who has just become a resident of Canada for income tax purposes. Do I have to wait until I file or send my first income tax and benefit return to start receiving the GST/HST credit?
A: No, once you become a resident of Canada you can fill out Form RC151 - GST/HST Credit Application for Individuals Who Become Residents of Canada and send it to the tax centre that serves your area.
Important Resources
Certified software for the 2015 NETFILE program