Filing taxes in Canada can seem overwhelming. Especially if it’s your first time to file, it can look complicated. What you need to know is that when you have the right information, things will start to become simple. Take it one step at a time. And remember, help is always available.
You may have some of these basic questions in mind. Let us help you out with some answers:
I’ve just arrived in Manitoba. Do I need to file a tax return?
In Manitoba, filing an income tax return is a way to get into the Canada Revenue Agency’s (CRA) system and to avail of government benefits. If you’re arrived just a few months before tax filing season, you may not need to file a return. But to start receiving permanent resident benefits like the Canada Child Benefit and GST/HST credit, fill out Form RC66 (and RC66SCH) and RC151 and mail them to CRA. You should file a return when the next tax cycle comes.
Watch this video to know more: Benefits and Credits for Newcomers to Canada
Or go to this page: Newcomers to Canada (immigrants and returning residents)
I’m a refugee. Do I need to file a return?
If you enter Canada as a refugee and acquire Permanent Residency status, there are government benefits due to you, like the GST/HST credit and Canada Child Benefit. You can receive these benefits once you apply for them (see question above) or file your return. Read Tax returns open doors for refugees for more information. If you need help preparing your return, contact SEED or see information about free tax clinics below.
I lost my job and did not earn anything in the last year. Do I need to file an income tax return?
Yes, you should file a return even if you have no income at all. Any change in your personal information will help the CRA calculate your benefits and credits as well as any related provincial and territorial payments.
File your tax return especially if you availed of COVID-19 financial supports like CERB, CRB, or EI. These are taxable benefits. Consult a free tax clinic if you have questions about your CERB, T4A slip or anything related to filing your taxes. Please refer to the links below.
Can I claim credits if I worked from home due to the pandemic?
You may be able to claim deductions for home office expenses. These deductions decrease the amount of income you pay tax on. Go to Home Office Expenses for Employees to know the eligibility requirements, claim method to use, and other particulars.
Why does the government need my info?
CRA needs your information to correctly assess the benefits due to you. When they get your return, they will be able to evaluate whether you are eligible for certain programs as well as correctly calculate the amount of benefits you qualify for. This is why it is also important to update your information with CRA as soon as they change.
What documents should I have in order to file a return?
You should have your SIN (Social Insurance Number), income statements from Canada and abroad, information slips such as your T4 (if you are employed), and the General Income Tax and Benefits Guide to know the steps in preparing a return and get the proper forms. You can also read Filing your first tax return in 5 steps on Live & Learn to know more.
I don’t know how to prepare a tax return. Who should I ask for help?
If you are an individual who has a modest income and a simple tax situation (meaning you are not a business-owner or self-employed, or not filing for bankruptcy) you can ask help from free tax clinics running the Community Volunteer Income Tax Program (CVITP). They assist newcomers complete and file their taxes for free by videoconference, phone, or through a document drop-off arrangement. Go to: Tax Preparation Clinics (Manitoba), 211 Manitoba (click “Financial” then Tax Assistance/Clinics) or Manitoba Housing. You can also go to:
I saw an ad that said it can help me get my tax refund immediately. Is this service safe?
Tax Discounters are tax preparers that calculate your refund before you file with the CRA. They immediately pay you the refund, usually on the same day. However, they do charge a fee. The cost is a percentage of your refund depending on the total amount calculated.
The Tax Rebate Discounting Act regulates the practice of tax discounting. Discounters can be a good option depending on your need. Just make sure to review and understand all the agreements that they give before you agree and sign. But if you can wait for your refund, there are many tax preparation services and tools that would be a better option. You can use free certified software (like NETFILE) or go to CVITP and not-for-profit financial counselling agencies.
What happens if I don’t file?
Aside from not being able to enjoy government benefits that are due to you, you may also be liable for penalties, fines and even imprisonment for tax evasion. Even if Canada’s income tax system is based on voluntary compliance and self-assessment, it does not mean that you can pay taxes only when you feel like it. The government expects you to respect the law and fully comply with your obligations.
What if I file late?
The general deadline for filing taxes is on or before April 30. But when that day falls on a Sunday or a holiday, the deadline is moved to the next business day (for example, April 30, 2017 was a Sunday and so returns postmarked on May 1, 2017 were considered on time). If you are self-employed, your deadline is June 15, unless you have a balance owing the previous year, then you have to pay on or before April 30.
If you don’t owe any balances to the CRA, you don’t have to worry if you file late. There is no penalty. However, this affects the schedule you receive your benefits depending on when you were able to file.
If you do have balance owing however, you will be charged a late-filing penalty. Normally, the penalty is 5% of your balance owing the last year plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. But in view of the pandemic, the government has announced interest relief to 2020 income tax debt. Read Government of Canada addresses CERB repayments for self-employed individuals and announces interest relief on 2020 income tax debt due to COVID-19 related income support from the CRA for more details.
What if I file my returns and my personal information changes. Should I report it to CRA? How?
Marital status changes, having a new address, and other changes in your personal information are important. These may have an effect on the calculation of your benefits as well as the schedule you receive them. To update your information, you may change it online through MyAccount or MyCRA; or call 1-800-959-8281 (you need to provide specific information to verify your identity); or mail a completed Form RC325 (address change request) and a signed letter that includes your SIN, new address and moving date, or Form RC65 (marital status change) to your tax centre.
Article updated March 18, 2021.
Sources: Taxes, Canada Revenue Agency; and What new Canadians should know about filing taxes in Canada, Caroline Battista, Huffington Post Canada.com. All accessed on October 3, 2017. With special thanks to SEED for information from the Tax Filing and Access to Benefits Forum.
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