If you’re a newcomer to Canada, you become a resident for income tax purposes when you establish significant residential ties (such as a home or spouse or dependants living in Canada) in the country. Usually, these are established the day you arrive in Canada.
If you’re unsure of your status in Canada, click here to learn more. Generally speaking, if you don’t have a home, a spouse or common-law partner, or dependants living with you in Canada, you’ll still be considered a resident if you’ve any of the following residential ties:
• Personal property in Canada (car, furniture, etc.)
• Social ties (memberships in recreational or religious organizations in Canada)
• Bank accounts or credit cards issued in Canada
• A Canadian driver’s licence
• A Canadian passport
• Health insurance with a Canadian province or territory
Did you know? If you were a resident of Canada in an earlier year and you moved away from Canada, you’ll be considered a Canadian resident for income tax purposes when you move back and re-establish your residential ties.
As a resident of Canada, you must file a tax return, for part or all of the year, if you:
• Have to pay taxes or
• Want to claim a refund
Even if you didn’t have any income for the year, you should still file a return as it lets the Canada Revenue Agency (CRA) determine your eligibility for certain benefits like the GST/HST credit, Canada child benefit, and other provincial/territory programs.
When it comes right down to it, reporting the income that you earned before you became a Canadian resident helps the Canada Revenue Agency (CRA) determine the amount of non-refundable tax credits you’re entitled to. For example, in order to receive non-refundable credits in full, at least 90% of your income must come from Canadian sources.
Note: If your net income from foreign and Canadian sources for the year is zero, the 90% rule no longer applies and you’ll receive full non-refundable credits.
Where can I learn more?