Canadian Immigrants Filing Income Tax Returns
Helping New Residents of Canada Understand Taxes
Feb 4, 2009
The Canadian tax system can be overwhelming for new immigrants because of its many rules and detailed requirements. The system is in place to collect money from individuals and businesses to finance the activities of the municipal, provincial and federal levels of government.
Canada is considered to have high taxes compared to other countries, but these taxes help pay for the country’s many public services like health care and public education.
Who Has to Pay Taxes?
Some newcomers believe that only citizens have to file taxes and not permanent residents. But the truth is, all adult Canadian residents must file, even if they do not earn an income. If you are unemployed, on social assistance or on a pension, you still need to file taxes.
If a new resident arrives in Canada by Dec. 31 (and even on that day) of last year, they are required to file a tax return this year. If they arrived in January of this year, they do not have to file until next year. According to the Canada Revenue Agency, a resident of Canada must report income from both inside and outside Canada; must pay the correct amount of taxes according to the law; have the right and responsibility to verify their income tax status each year; and is able to claim all deductions, non-refundable tax credits, and refundable federal, provincial, or territorial credits that apply to them.
Not paying taxes is against the law and can result in penalties or even jail time.
How to Obtain and File Income Tax Forms
Tax preparation forms can be obtained from any post office, Canada Revenue Agency (CRA) tax services office or downloaded from the CRA website.
There are many different ways to file an income tax return. A paper return can be filled out by the person filing their taxes, a Chartered Accountant, or a tax preparation company such as H&R Block. Once the paper forms are complete, they need to be submitted to a local tax service office or mailed to the CRA.
For those confident enough to do it themselves, there is special software available to help with the process of filling out forms, such as TaxTron, QuickTax and UFile.
Many people fill out their income tax electronically through the CRA website, using NETFILE. The CRA website also explains the tax system to newcomers.
If you are eligible, the CRA provides TELEFILE, a telephone service designed for individuals with simple or basic returns.
Free Tax Clinics
For people who need help filing an income tax return but cannot afford to hire an accountant, there are other options. Check with your Community Information Centre to see if there are any free income tax clinics offered in your area.
The CRA offers the Community Volunteer Income Tax Program to help low-income individuals with basic tax returns.
The Institute of Chartered Accountants of Ontario (ICAO) offers the Tax Clinic Program. This free program also provides volunteers to assist low-income individuals with their tax returns.
Due Date for Submitting Income Tax Returns
The deadline for completing your tax return is April 30 of the year after the tax year. If, however, you, your spouse or your common-law partner carried on a business in Canada, the return deadline is June 15 of the year after the tax year.
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