Should I file my tax as a newcomer and when?

Some people think that they don’t have a Permanent Resident status in Canada, so they don’t have to file tax even if they already live in Canada. That is not the case.

Many international students file their tax returns and receive some tax credits because they are low income usually. They don’t have Permanent Resident status either. They are on student visa. The tax credits they usually receive are GST credits, Ontario Trillium Benefits and Ontario Climate Action Incentive credits.

Many people have a negative impression towards tax naturally. However, government usually use tax to distribute benefits sometimes to low-income people while sometimes to the whole population. GST credits and Ontario Trillium Benefits targets the low-income group. Ontario Climate Action Incentive is universal for everyone regardless income.

Some people arrived in Canada on a visiting visa, but they stayed and became permanent residents. They should file their tax return for the tax year they arrived in Canada rather than the year they became permanent residents.

One key item in the first tax return for newcomers is world income statement. It asks for the income from anywhere in the world between January 1^st and the date they arrive in Canada. Some people think I already paid tax for the part of the income I made in my home country, why does the CRA ask me that part of income again? The purpose is not to tax you, but to tally up the totally annual income which is used to determine whether the person’s annual income is low enough to qualified for certain tax credits such as GST and Ontario Trillium Benefits.

Only filing electronically is not enough for the first tax return of a newcomer.  The tax return of the Federal Condensed version with the world income statement needs to be printed out, signed and mailed to CRA. Otherwise, the newcomers might not get their tax credits.  This is a bit of red tap. The world income statement is part of the electronic filing. Why does this need to be printed out and mailed? Someone experienced with tax filing told me that it is not part of the electronic transmission. But why not make it as a part of the transmission? Why single it out? Isn’t it difficult enough for a newcomer already? 😊 This is a head scratcher for me anyway.

Hope you have a smooth tax season.