international tax services office

International Tax Services Office

Welcome to CanadaInternational Students

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Session objective

To give you important information on how to file an income tax return as a newcomer to Canada.

Brief overview of residency and how it affects tax.

To tell you about the tools and resources offered by the Canada Revenue Agency (CRA) that are available to help you file your tax returns.

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Canada’s tax system

Based on residency not on citizenship.

Self-assessment system means you are responsible for reporting your income and paying the correct amount of income tax.

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Resident of Canada

Am I a resident of Canada for tax and credit purposes?

At the Canada Revenue Agency, we consider you to be a resident of Canada for tax and credit purposes when you establish residential ties in Canada.

You usually establish these ties on the date you arrive in Canada.

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Residential Ties in Canada

Dwelling place available

Spouse and/or dependents

Personal property

Memberships

Economic ties

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Residency

Why is residency important?

A resident of Canada pays tax in Canada on his or her world income.

You must be a resident of Canada to be eligible for social benefits (GSTC and CCTB).

A resident of Canada can claim all deductions and credits that apply to them to reduce their tax.

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Residency Status

Resident

Non-Resident

Deemed Resident

Deemed Non-Resident

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Resident of Canada

An individual who enters Canada and who has established significant residential ties with Canada.

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Deemed Resident

A deemed resident is a resident of another country who has sojourned in Canada for 183 days or more in a calendar year and has not established significant residential ties with Canada.

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Non-Resident

A non-resident is a resident of another country who has not established significant residential ties with Canada.

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Deemed Non-Resident

A deemed non-resident is an individual who under a tax treaty is considered a resident of another country.

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More informationWhere can I get more information?

Publication T4055, Newcomers to Canada

Form NR74, Determination of Residency Status (Entering Canada)

Interpretation Bulletin IT221R3, Determination of an Individual’s Residence Status

CRA Web site:

www.cra.gc.ca/internationalstudents

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Do you have to file?

You owe taxes

We sent you a request to file

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Should you file?

You want to claim a refund of tax that has been withheld

Tuition and education amounts

Goods & Services Tax Credit / Harmonized Sales Tax Credit (if eligible)

Canada Child Tax Benefit (if eligible)

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Tax Package

The Canadian tax return comes in two booklets – one is a Guide and the other a Forms booklet. The Forms booklet is for a province or territory.

Resident File under the province or territory where you normally resided on December 31st.

How to complete a return ?

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Income tax return – “Identification” area

No social insurance number (SIN)? Contact a Service Canada (SC) office for information about applying for a SIN or visit their Web site for more information.

www.servicecanada.gc.ca

Can I use my expired 900 SIN to file my income tax return? Yes—you can use your expired 900 SIN to file your income tax return.

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No Social Insurance Number (SIN)?

Not allowed to get a SIN?

File Form T1261, Application for a Canada Revenue

Agency Individual Tax Number (ITN)

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Information about your residence

Date of entry

Newcomers—enter the date you became a resident of Canada for tax purposes.

We need this information to calculate any benefits that you may be entitled to.

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How long in Canada?

Did you become a resident of Canada before last year?

If you became a resident before last year, you should file an income tax return for each year you lived in Canada.

You should put your date of entry only on the tax return for your first year in Canada.

You can get tax returns for previous years on our website at www.cra.gc.ca, or by calling

1-855-284-5942.

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Be sure this is an address where you can be reached between May and August

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If you are a resident who entered Canada for the first time in 2012, put in your date of entry

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GST/HST Credit and Foreign Property Reporting

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Total Income

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World Income

This is taxable from your date of entry.

Report world income in Canadian dollars.

Exchange rates are available from the Bank of Canada at: www.bankofcanada.ca

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Information Slips

T4 Employment Income

T4A Other Income

T5 Statement of Investment Income

T2202A Tuition, Education and Textbook Amounts

Certificate

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Teacher – Research Assistants

Report employment income at line 101

See your T4 slip

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T4 Information Slip

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You can always refer to the reverse side of a slip for more information

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T4A Other Income

Scholarships and research grants

104= Research Grant105= Scholarship

Box number

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Research Grants (line 104) Report your net research grant

Subtract your expenses from your grant; Your expenses cannot be more than

your grant; Attach to your return a list of your

expenses.

For more information see IT-75, Scholarships, Fellowships, Bursaries, Prizes, and Research Grants

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Other Income (line 130)

Scholarship

Bursaries

Fellowship

Artist Project Grant

Prize for Achievement in field of study

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Scholarship Income 2006 and future years

The full amount of scholarships, fellowships, or bursaries that are received by you as a student if you are entitled to the education amount (see line 323) are no longer reported as income on your tax return.

If you are not eligible for the education amount, report on line 130 only the amount that is more than $500.

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Deductions

You may be entitled to deductions which may reduce your taxable income, for example:

Moving expensesChild Care expensesOther expenses

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Net and Taxable Income

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International students and moving expenses

An international student can deduct moving expenses if he or she is: Attending post-secondary courses in Canada as a full-time student and;

Receiving taxable-award income (e.g., scholarship) after the move. You cannot deduct moving expenses against non-taxable scholarship, fellowship, and bursary income.

See Form T1-M for more information.

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Foreign income

Are there exemptions under a tax treaty?

Contact us at this toll-free number: 1-855-284-5942

Do I have to pay tax in both countries? See “Federal foreign tax credit,” line 405, on

Schedule 1.

Tax Credits

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Tax Credits Help Reduce the Amount of Tax You Pay –

Non-refundable tax credits can only be used to reduce the amount of tax you pay to zero and any excess cannot be refunded

Refundable tax credits can be used to reduce the amount of tax you pay to zero and any excess may be refunded

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Credits

Non-Refundable Tax Credits

Personal amounts Tuition fees Education amount Medical expenses

Refundable

Tax Credits

Provincial

property tax credit Sales tax credit

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Schedule 1

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Calculating federal non-refundable tax credits

You may have to prorate your non-refundable tax credits based on the number of days you are resident in Canada.

The rules are the same for calculating provincial or territorial non-refundable tax credits.

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ExampleJane arrived in Canada from Australia on May 6, 2012.She entered “05-06” in the Identification area of her return. She calculated that from May 6 to December 31 there were 240 days.

Jane claims the basic personal amount calculated as follows:240 days in Canada x $10,822.00 = $7,096.39365 days in 2012

Jane will enter $7,096.39 on line 300 of her Schedule 1.

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Claim full non-refundable tax credits?

Yes—if you have no income for the part of the year that you were not a resident of Canada.

Yes—if you meet the 90% rule for the part of the year you were not resident in Canada.

You must attach a note to your return showing your world income for the part of the year you were not resident in Canada.

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Tuition, education, and textbook amount

Use Schedule 11

Take the information from T2202A

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T2202A

Tuition Fees

Months part-time

Months full-time

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Schedule 11

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Textbook amount 2006 and future years

You are eligible to claim an amount for textbooks only if you are entitled to claim the education amount.

The amount is: $65 for each month you qualify for

the full-time education amount; and $20 for each month you qualify for

the part-time education amount.

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Public Transit Passes Amount

For transit after June 30, 2006, you can claim the cost of monthly public transit passes if you had Canadian source income during the year.

Public transit includes transit by local bus, streetcar, subway, commuter train or bus, and local ferry.

Receipts – Keep all your receipts and passes in case we ask to see them.

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Canada Employment Amount

All employees are eligible to claim an employment tax credit.

Claim the lesser of:

$1,095; and the amount reported at line 101 of your

return.

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Refund or Balance Owing?

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Goods and Services Tax/Harmonized Sales Tax Credit

As a newcomer, you should:

complete Form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada; and

send the completed Form RC151 to the tax centre that serves your area.

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Canada Child Tax Benefit

As a newcomer, you:

Need to complete Form RC66, Canada Child Tax Benefit Application; and

May have to complete Schedule RC66SCH, Status in Canada/Statement of Income

Send your completed forms to the tax centre that serves your area.

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Filing Date

On or before April 30th

On or before June 15th for self-employed individual

In all cases, any outstanding balance is due on or before April 30th

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More information

Newcomers should send their tax return to:

International Tax Services Office2204 Walkley RoadOttawa ON K1A 1A8

For more information, you can call toll free1-855-284-5942, or go to :www.cra.gc.ca/internationalstudents

Thank you