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Canada newcomer tax filing information

Canada newcomer tax filing information – what you need to know and resources


Canada newcomer tax filing information

You become a resident of Canada and liable to report income and pay taxes on the date you arrive in Canada. It is therefore very important to have some knowledge of your Canada tax filing obligations under Canada’s Income Tax Act before you land in Canada.

Canada’s tax system is similar to that of many countries. Employers and other payers usually deduct taxes from the income they pay you. Individuals with self-employment income or rental income usually pay their taxes by instalment.

For 2022tax year, the filing deadline is May 1st, 2023 for employer paid income and June 15th, 2023 for self-employed income.

Canada is very attractive to immigrants precisely because the benefits people enjoy in Canada are made possible through taxes. Canada’s tax system pays for roads, schools, health care, social security, and public safety.

Newcomers must therefore remember that it is your and other people’s taxes that make life convenient and safe for all in Canada.

Canada’s tax system

Each year, eligible Canadian taxpayers determine their tax payable by completing an Income Tax and Benefit Return and sending it to Canada Revenue Agency (CRA). On the return, you:

  • report your income and claim your deductions
  • calculate your federal and provincial or territorial tax
  • determine if you have a balance of tax owing for the year, or
  • calculate refund of some or all of the tax that was deducted from your income during the year

For more information, see Do you have to file a tax return?

Guide RC17, Taxpayer Bill of Rights Guide: Understanding your rights as a taxpayer, outlines the fair treatment you are entitled to receive when you deal with the CRA.

For more information, go to Taxpayer Bill of Rights. You have other rights under Canadian laws including the Canadian Charter of Rights and Freedoms.

How much taxes do newcomers have to pay?

The amount of income tax you have to pay depends on total Canadian and foreign income, your deductions and your family situation.

It also depends on which province you live in, since each province has their own tax brackets, in addition to the federal brackets. 

Why should I file a tax return?

To receive a tax refund

The government will refund you all or part of the taxes you’ve already paid because either you didn’t earn enough income during the year, or you paid too much tax. 

To recover any tax you overpaid from your paycheque

If you work as an employee, in most cases your employer automatically deducts taxes from each pay. However, if you make less than a certain amount of income during the tax year, some of that deduction will be sent back to you. 

To avoid penalties on taxes owed

If you work in Canada, or receive income from foreign sources, you’ll have to pay taxes on the money you receive. Filing your returns enables you to report all sources of income. You could be assessed penalties and fees if you don’t file for all sources of income. 

To take advantage of benefits

Always make sure to file a tax return even if you have no income, as it will provide you with access to information & benefits.

As a newcomer, filing your taxes entitles you several tax and financial benefits. On your tax return form, you can claim the following benefits and credits.

 Married or common-law with children under 18 years oldMarried or common-law with childrenSingle with children under 18 years oldSingle with
children
Married or common-law with no childrenMarried or
common-law with no children
Single and 19 or older with no childrenSingle and 19 or older with no children 
Canada child benefitYesYesNoNo
Goods and services tax/harmonized sales tax (GST/HST) creditYesYesYesYes
Provincial and territorial
benefits and credits
YesYesYesYes

Even if you did not receive income during the year, it’s a good idea to file a return so that CRA can determine if you are eligible for any benefits. You have nothing to lose!

How do I file my Canada income tax return?

As a newcomer to Canada, you will have to print and mail your first income tax return to the CRA. Next year, and all the following years, you will be able to file your income tax return electronically through NETFILE

A certified tax preparer can submit your tax return online on your behalf. Likewise, you can NETFILE your tax return if you prepare it yourself with CRA-certified tax software.

What information do I need to include in my return?

You need to provide personal information such as your full legal name, your address, and all income from the previous year. In addition, you have to provide to the following:

  • Your Social Insurance Number (SIN) which CRA uses to identify you for income tax and benefits. Make sure you have one or apply at CRA website.
  • Submit T4 – Statement of Remuneration Paid that you received from your Canadian employer(s) during the tax year.
  • If you have recently arrived in Canada, you need to include information from your employment before arriving in Canada.
  • If you had employment income from outside Canada since the day you landed, you will need to inclode them as well.
  • If you have foreign assets over $100,000, you will need to report them on form CRA’s T1135 on your tax return.
  • If you have dependents, (such as a spouse, children, or elderly parents), you’ll have to provide all of their details too.
  • Include information on benefits, credits and deductions you can claim. For example, childcare expenses, medical expenses for yourself, your spouse, or your children.
  • If you are resident in Quebec, you must file a tax return to Revenu Québec as well. See Revenu Québec tax obligations for newcomers to Canada.

What if I have foreign income?

Any income you earned before you arrived in Canada is not subject to Canadian taxes. However, once you become landed as Canadian PR, have to begin declaring all income sources on your tax return going forward.

You must declare the country the funds came from and the full amount of any income before foreign taxes were applied.

Your foreign income may be from a country exempt from tax in Canada due to a tax treaty. However, you must still report the income on your tax return.

What about my foreign property?

You must report any foreign property you own outside Canada during the year with an adjusted cost base above $100,000. This includes bank accounts, stocks, bonds and real estate. You make the declaration on CRA’s Form T1135, Foreign Income Verification Statement.

See also Canadian banks target newcomers as key source of client growth and Canadian banks are competing for Canada newcomer banking services.