Newcomers to Canada (immigrants)

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Watch videos for newcomers to Canada to learn about the Canadian tax system.

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The following information applies only for the first tax year that you are a new resident of Canada for income tax purposes. After your first tax year in Canada, you are no longer considered a newcomer for income tax purposes.

Are you a newcomer to Canada?

You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada. You usually establish these ties on the date you arrive in Canada.

Newcomers to Canada who have established residential ties with Canada may be:

If you were a resident of Canada in an earlier year, and you are now a non-resident, you will be considered a Canadian resident for income tax purposes when you move back to Canada and re-establish your residential ties.

As a newcomer to Canada, you will need a social insurance number (SIN). For more information, visit Service Canada.

If you want to learn about Canada's tax system, go to Learning about taxes.

Do you have to file a tax return?

As a resident of Canada for income tax purposes for part or all of a tax year (January 1 to December 31), you must file a tax return if you:

  • have to pay tax; or
  • want to claim a refund.

Even if you have not received income in the year, you have to file a tax return so that the Canada Revenue Agency can determine if you are eligible for:

For more information, go to Do you have to file a return?.

Which tax package should you use?

You should be aware that most individuals who reside in Canada file only one income tax return for the tax year, because the Canadian government collects taxes on behalf of all provinces and territories, except the Province of Quebec.

For the tax year that you are a newcomer to Canada and for each tax year that you continue to be a resident of Canada for income tax purposes, use the general income tax and benefit package for the province or territory where you resided on December 31 of the tax year.

Notes

It is important to use the forms book for your province or territory because tax rates and tax credits are different in each province and territory.

If you live in the province of Quebec, you may have to file a separate provincial income tax return. For more information, visit Revenu Québec.

Transmitting your tax return by Internet

EFILE

Your EFILE service provider can complete and file your return for you. For more information, go to EFILE.

NETFILE

You can file your return by Internet if you prepare your return with a tax preparation software or Web application. For more information, go to NETFILE.

Note

 You will not be able to file electronically without a SIN.

If you have requested a SIN, but have not yet received one, and the deadline for filing your tax return is near, file your tax return without a SIN to avoid any possible late-filing penalty and any interest charges. Attach a note to your return to let us know why you did not enter your SIN.

If you file your tax return by mail, send it to the International and Ottawa Tax Services Office. Do not mail your tax return to any other address.

When do you have to send us your tax return?

To find out when you have to file your return, go to Filing due dates.

How to complete your tax return

Identification

It is important that you complete the entire identification area on page 1 of your tax return. We need this information to assess your tax return and calculate your goods and services tax/harmonized sales tax (GST/HST) credit, plus any benefits to which you may be entitled under the Canada child tax benefit.

Date of entry in Canada

When completing this area on your return, enter the date you became a resident of Canada for income tax purposes.

Information about your spouse or common-law partner

Enter your spouse or common-law partner’s net world income for 2014. Net world income is the net income from all sources both inside and outside of Canada. Underneath, enter your spouse or common-law partner’s net world income for the period you were a resident of Canada. If applicable also enter the amount of universal child care benefit included on line 117, and the amount of universal child care benefit repayment included on line 213 of his or her tax return.

What income do you have to report?

For the part of the tax year that you were NOT a resident of Canada

You have to report the following amounts:

  • income from employment in Canada or from a business carried on in Canada;
  • taxable capital gains from disposing of taxable Canadian property; and
  • taxable part of scholarships, bursaries, fellowships, and research grants you received from Canadian sources.
Note

For the part of the year that you were not a resident of Canada, do not include on your tax return any gain or loss from disposing of taxable Canadian property, or a loss from a business carried on in Canada, if, under a tax treaty, the gain from that disposition or any income from that business would be exempt from tax in Canada. For more information, go to Non-residents disposing of certain Canadian Properties.

For the part of the tax year that you WERE a resident of Canada

You have to report your world income (income from all sources, both inside and outside Canada) earned after becoming a resident of Canada for income tax purposes on your Canadian tax return.

In some cases, pension income from outside of Canada may be exempt from tax in Canada due to a tax treaty, but you must still report the income on your tax return. You can deduct the exempt part on line 256 of your tax return.

If you owned certain properties, other than taxable Canadian properties, while you were a non-resident of Canada, we consider you to have disposed of the properties and to have immediately reacquired them at a cost equal to their fair market value on the date you became a resident of Canada. This is called a deemed acquisition.

Note

If you are re-establishing Canadian residency and you had a deemed disposition when you left Canada, go to Dispositions of property.

If you are a protected person and you received funds from a charitable organization such as a church group, you generally do not have to report the amounts on your tax return. However, if a charitable organization hired you as an employee, the employment income you received is taxable.

Underground economy

The underground economy is defined as income earned but not reported for income tax purposes and the sale of goods or services on which taxes or duties have not been paid.

What deductions and credits can you claim?

Registered retirement savings plan contributions

Generally, you cannot deduct contributions you made to a registered retirement savings plan (RRSP) in 2014 if this is the first year that you will be filing a tax return in Canada.

However, if you filed a tax return in Canada for any tax year from 1990 to 2013, you may be able to claim a deduction for RRSP contributions you made in Canada for 2014. We base the maximum amount you can deduct on certain types of income you earned in earlier years.

For more information, go to Line 208 RRSP and PRPP deduction.

Pension income splitting

If you and your spouse or common-law partner were residents of Canada on December 31, 2014, you can elect to split your pension income that qualifies for the pension income amount (line 314 on Schedule 1). To make this election, you and your spouse or common-law partner must complete and attach Form T1032, Joint Election to Split Pension Income, to your tax returns.

For more information, go to Pension income splitting.

Moving expenses

Generally, you cannot deduct moving expenses incurred to move to Canada.

However, if you entered Canada to attend courses as a student in full-time attendance enrolled in a program at a post-secondary level at a university, college, or other educational institution, and you received a taxable Canadian scholarship, bursary, fellowship, or research grant to attend that educational institution, you may be eligible to deduct your moving expenses.

You cannot deduct moving expenses if your only income at the new location is scholarship, fellowship, or bursary income that is entirely exempt from tax.

For more information, go to Line 219 – Moving expenses.

Support payments

If you make spousal or child support payments, you may be able to deduct the amounts you paid, even if your former spouse or common-law partner does not live in Canada.

For more information, go to Support payments.

Treaty-exempt income

You have to report your world income that you received after you became a resident of Canada. World income is income from all sources both inside and outside Canada. However, part or all of the income may be exempt from Canadian tax. This may be the case if Canada has a tax treaty with the country in which you earned the income and there is a provision in the treaty that prevents Canada from taxing the type of income you received. You can deduct the exempt part on line 256 of your tax return.

If you are not sure if the applicable tax treaty contains a provision that makes your income from sources outside of Canada exempt from tax in Canada, contact us.

Tax and credits

To calculate your tax and credits, complete Schedule 1, Federal Tax, and Form 428 for the province or territory where you lived on December 31.

If you lived in Quebec on December 31, visit Revenu Québec.

Federal non-refundable tax credits

The amount of federal non-refundable tax credits you can claim may be limited.

You can claim the total of:

  • the federal non-refundable tax credits that apply to the part of the year that you were a resident of Canada; and
  • the federal non-refundable tax credits that apply to the part of the year that you were not a resident of Canada.

For more information, go to Federal non-refundable tax credits for newcomers and emigrants.

Provincial or territorial non-refundable tax credits (Form 428)

The amount of certain provincial or territorial non-refundable tax credits you can claim may also be limited.

Generally, the rules for calculating your provincial or territorial non-refundable tax credits are the same rules as those used to calculate your corresponding federal non-refundable tax credits. However, the amounts used in calculating most provincial or territorial non-refundable tax credits are different from the corresponding federal credits.

Federal foreign tax credits

After you become a resident of Canada, you may receive income from the country where you used to live or from another country. This income may be subject to tax in Canada and the other country. This could happen if:

  • no tax treaty exists between Canada and the other country; or
  • there is no provision in the tax treaty that prevents both countries from taxing the type of income you received.

If this is your situation, you may be able to reduce the amount of federal tax you have to pay in Canada by claiming a federal foreign tax credit for the foreign tax you paid. For more information, go to Line 405  Federal foreign tax credit.

Entitlement to benefits and credits

You may (in the year you became a resident of Canada) be eligible to receive:

To apply for the GST/HST credit, complete Form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada.

To apply for the CCTB and the UCCB payments, complete Form RC66, Canada Child Benefits Application. Depending upon your immigration and residency status, you may also have to complete Schedule RC66SCH, Status in Canada/Statement of Income.

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