Tax basics for newcomers

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Original image  by Lester Balajadia/  © Used by permission

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What are taxes?

  1. “Tax is a mandatory payment by individuals and corporations to government.” Canada Revenue Agency (CRA)
  2. It can be placed on things such as income, property and sales.
    • For example, you pay tax every time you buy goods or services.
    • These are called Goods and Services Tax (GST) and Provincial Sales Tax (PST).

Why do we need to pay taxes?

  1. Taxes pay for government programs like:
    • health care
    • public education
    • newcomer supports:
      • language training
      • employment assistance
      • skills training
      • other immigrant services
    • Taxes are used for public services and benefits like:
      • libraries
      • parks
      • playgrounds
      • roads and bridges
      • Canada Child Benefit
      • Employment Insurance
      • Old age security
    • Not paying taxes is against the law.
      • Every resident needs to file their returns.
      • The deadline is April 30 each year.
      • Missing the deadline may mean fines or imprisonment.

Go to the CRA site to know more about changes to taxes and benefits during COVID-19.

Do you need to file a tax return if you haven’t earned income yet?

  1. You don’t need to file a return if you have been here only for the last few months of the year.
  2. But you should apply for permanent resident benefits. These are benefits like the Canada Child Benefit and the GST/HST Credit (Goods and Services Tax/Harmonized Sales Tax).
  3. Fill-out Form RC66 (and RC66SCH) and RC151 to apply.
  4. Mail them to the CRA.
  5. Give an estimate of your earnings from your home country (or other countries) in the year/s covered.
  6. You should file a return when the next tax cycle comes. Do so even if you did not work.
  7. A tax return is filed not only to declare income. You do it also to apply for government benefits.

How to file:

If you have been living in Canada for a while and need to file:

  1. Get a Social Insurance Number (SIN).
  2. Fill-out the T1 return or T1 General –Income Tax and Benefit Return.
  3. Get the form:
  4. Gather:
    • supporting information
    • information slips
  5. Use certified software to compute your taxes.
  6. Print and mail it to the CRA.

For more information:

Article updated April 6, 2021.

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Community Resources

Learn more about COVID-19 Financial support for people, businesses and organizations.

Resources from the Canada Revenue Agency:
Videos and recorded webinars for individuals and families
Learn about your taxes online course is an engaging step-by-step learning resource.

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