Webinar - Students, it pays to do your taxes!
Please note: The content of this presentation is accurate as of the date it was aired, on November 15, 2023. For the most recent information on these topics, go to Students - Canada.ca.
Students, it pays to do your taxes!
James : Hello, and welcome. My name is James. I'm with the Canada Revenue Agency, or CRA for short. I'm very happy to be here today.
Today, I'll talk about why doing your taxes is good for you and what you need to get them done.
[Three students smiling at each other outside a school.]
James : Given that we are meeting virtually, I wish to acknowledge the lands on which I am presenting from are part of the traditional territory of the Haudenosaunee and Anishnaabeg. This territory is covered by the Upper Canada Treaties, is within the lands protected by the "Dish With One Spoon" wampum agreement, which was an agreement between the Anishinaabeg and Haudenosaunee to share and care for the resources around the Great Lakes, and is directly adjacent to Haldimand Treaty territory. Brantford is situated on the Haldimand Tract, land promised to Six Nations, which includes six miles on each side of the Grand River.
I want to acknowledge the lands on which you are gathered from coast to coast and take a moment of silence to have a thought for the territory in which you find yourself.
James : Throughout this presentation, I will tell you about Aman, an 18 year old, in their last year of high school. I will take you through Aman's journey from starting their first job to doing their taxes for the first time.
- We'll talk about taxes and why we pay them
- We'll look at what you need to know when starting your first job
- We'll explain the underground economy
- We'll go over what to expect when you do your taxes for the first time and what happens after
- We'll discuss the GST/HST credit and other tax credits for which you may be eligible
- And we'll conclude by sharing information on online services offered by the CRA and how to protect yourself against scams
For the rest of this presentation, I'll refer to the Canada Revenue Agency as the CRA.
[A smiling student on their laptop outdoors.]
Why do we pay taxes?
James : If you are like Aman, you might find taxes a bit intimidating. After today's presentation, I hope you'll feel more confident about taxes and see the benefits of filing.
In Canada, we pay municipal, provincial/territorial, and federal taxes. Today, we'll be focussing on federal income tax.
Did you know that many public services, programs, and benefits are made possible through taxes? The government collects taxes to pay for things such as education, libraries, health care, emergency services, airports, and roads.
The taxes we pay also helps put money into the pockets of students, families, newcomers, seniors, and people with disabilities. This money is distributed through benefit and credit payments.
Taxes also fund social programs such as income support and old age security to assist members of our community.
Now, let's take a look at Aman and where they are on their tax journey.
[A collage of images showing a bridge, swimmers in a pool, medical practitioner and patient, firetruck outside a station, children's playground, and sanitation workers at work.]
Starting to work
James : Summer's over and Aman is starting their last year of high school. Like many of you, they're starting to think about their future. Aman wants to get a job so they can save money for university and possibly buy a car.
The hair salon close to Aman's house was hiring for after school and weekend work. Aman dropped off a resume and lucky for them, they got the job!
Little did they know that getting their first job was their first step in contributing to Canada's tax system.
[An individual in business casual attire holding a coffee outside.]
Social insurance number (SIN)
James : Aman has to fill out some paperwork before they can start their new job. Some forms ask for their social insurance number, also called SIN for short.
A SIN is a 9-digit identification number that you need to work in Canada and to get any benefits or services from the government.
You get your SIN from Service Canada. Your SIN is unique to you. You are the only person who is supposed to use it, and you are responsible for keeping it safe.
If your SIN gets into the wrong hands, it could lead to fraud or even identity theft.
When starting a job, you will need to give your SIN to your employer and to your bank when you open an account. They are responsible for protecting your personal information. They use your SIN to send information about your income to the CRA.
You'll also need to provide your SIN to government agencies or departments to access a benefit or service.
For example you'll give your SIN to the CRA when you file your taxes. Here, your SIN will help identify you in the CRA's system. If you're considering post-secondary education, you will also need to provide your SIN to your school so they can issue the tax slips you need to file your tax return.
You may already have a SIN. Often, parents and legal guardians will apply for their child's SIN when they're born.
If you do not already have a SIN, you can apply for one online, by mail, or in person through Service Canada. You will have to provide or send in a document that proves your identity.
Visit a Service Canada office if you're not sure whether you have a SIN, or have forgotten or lost it.
To find a Service Canada office near you, visit canada.ca/service-canada-office or call 1-800-622-6232.
For more information on the SIN, go to canada.ca/social-insurance-number or call 1-866-274-6627.
TD1 Personal tax credits
James : The first form Aman has to fill out for their job is the TD1 Personal Tax Credits form, which your employer should provide to you. Many of us fill them out when we start a new job but don't really understand why. So let's explore what a TD1 form does.
One of the most common taxes that you pay in Canada is income tax. Your employer is responsible for deducting this tax from your pay.
Your employer uses the information you provide on your TD1 form to calculate the amount of income tax to deduct from your pay.
You will be asked to fill out a TD1 form every time you start a job.
If you work for the same employer from year to year, you usually do not have to complete a TD1 form every year.
There is a two-part video available that covers how to fill out a TD1 form. Check it out on canada.ca/learn-about-taxes.
[A snapshot of form TD1, 2023 Personal Tax Credits Return.]
James : Aman receives their first pay cheque from the hair salon. They're a little surprised that they got less money than they were expecting. Instead of getting their hourly-wage for the hours they worked, Aman noticed that some money was taken off in the form of deductions. They're not sure what these are for.
Let's check out a video that explains what you need to know about a pay stub.
[An example of a pay stub.]
James : Aman has been working hard every weekend and is proud that they've saved their money. University is only a few months away!
In mid-February, Aman receives a T4 slip from their employer, but they are unsure what to do with it.
A T4, Statement of Remuneration Paid, is usually referred to as a T4 slip.
Your T4 is an important document that your employer gives you. It shows information about your employment income and deductions for the entire calendar year.
The slip provides a history of your employment earnings for the calendar year which covers January 1 – December 31. You will use the information found on your T4 slip for different calculations when doing your taxes.
Your employer has to send you a T4 slip before March 1st following the year in which you worked for them. You may receive a digital or physical copy, but both will show the same information.
If you had multiple jobs, you will receive a T4 slip from each of your employers. You must remember who you have worked for so that you do not forget to report even a small income.
The employer must also send a copy of your T4 slip to the CRA.
You may also receive other slips to report things like employment insurance, interest earned from a bank, and income support.
[An example of a T4, Statement of Remuneration Paid.]
James : Not all income will be reported on an information slip but you are still responsible for reporting it on your tax return.
Income in these categories could include tips or occasional earnings, such as payments received through a food delivery service or tutoring.
It's good to track this money throughout the year. You may need to gather documents such as financial statements, invoices or other records.
At the hair salon, Aman and their coworkers empty the tip jar weekly and split the tips based on each person's job. If Aman's employer splits the tips, they would be responsible for including that information on Aman's T4 slip at the end of the tax year.
However, since Aman and their coworkers split them up, it is up to Aman to report their own share on their tax return. Aman will also have to report income for the occasional tutoring they do throughout the year.
Aman tracks all the money they make and will report the total received between January 1st and December 31st on their tax return.
Reporting this income also has some benefits. The additional income you report can be an advantage when applying for a loan. You will qualify for more money and may even get a better interest rate because of your higher income. And that extra income could get you closer to your first car or home!
James : At work, Aman has heard a lot about working under the table. They're not sure what it means, so let's investigate.
Moonlighting, working for cash, and working under the table are all terms used to describe the underground economy. These terms mean not reporting income for income tax and GST/HST purposes.
It can include not reported or under-reported income from:
- tips and gratuities
- money earned from renting out a room of your home, ride sharing, babysitting, mowing lawns, washing cars, and other jobs
- gift cards received for work done
- cash payment for goods or services
- the exchange of goods or services for other goods or services (bartering) without using money
Generally, income you earn is taxable and you have to report it on your tax return. This is true even when you don't receive a T4 slip and when the activity is not your main source of income.
If you don't report all of your income and your return is selected for an audit, you may have to pay the income tax you didn't pay, plus interest, and penalties.
Make sure you're on the payroll of an employer so that you can benefit from a workers compensation program—if you are injured on the job—and employment insurance.
[An individual at a desk writing on a piece of paper.]
James : Always get a written contract or receipt when you buy goods or services.
If you don't get a receipt to prove you purchased something, such as a new laptop, you're not protected if something goes wrong and you want a refund. Instead, you'll lose your money.
It's important to know that evading taxes is illegal and can result in severe consequences such as penalties, fines, and criminal convictions.
A few dollars of unreported income may not seem like a big deal, but collectively they amount to billions of dollars lost that are needed to fund public services in your community.
So be part of the solution! Know how to recognize and avoid the underground economy.
For more information, go to canada.ca/taxes-underground-economy.
[An individual using their tablet outside.]
Do I need to do taxes?
James : Aman is not sure if they need to do a tax return and you may be asking yourself the same question.
Remember, completing a tax return and reporting your income lets you calculate whether you owe taxes or if you will get a refund.
In some situations, doing your taxes is mandatory. For example, if you owe taxes or if the CRA has sent you a request to do so.
But even if you don't have to do your taxes, it can be a good idea.
For instance, you'll need to do your taxes to claim a tax refund or get benefit and credit payments like the GST/HST credit. You could be eligible for payments even if you didn't earn any income, or your income is tax-exempt.
For a complete list of when you need to do your taxes, you can refer to the section "Do you have to file a tax return?" on the Canada.ca website or in the General Income Tax and Benefit Guide.
Get ready to do your taxes
James : While looking at their T4 slip, Aman sees that there was income tax deducted from their pay throughout the year. They wonder if they could get any of that back. Aman decides to do a tax return, report all of their income and see the result.
Let's check out a video that covers some common documents you need to get started on your tax return.
For more information, go to canada.ca/taxes-get-ready.
[An individual smiling while using their laptop on a dining table.]
There are a few ways to do your taxes!
James : Aman is finally ready to file a tax return and looks at the different ways they can be done.
There are a few ways to do your taxes:
You can do your taxes online. This is the fastest way as tax returns filed electronically are typically processed within two weeks. Certified software is available to make online filing easy, and some software products are even free. The tax software guides you and calculates everything for you. It helps make sure you don't miss out on any benefits and credits. Please note, if the CRA does not have your complete date of birth on record, you may not be able to do your taxes online. Make sure to also sign up for direct deposit, so if you are eligible for a refund, you can receive it faster!
Volunteers may be able to help you do your taxes for free. There are tax clinics hosted by community organizations across Canada for those with a modest income and simple tax situation. For more information, go to canada.ca/taxes-general-package or call the CRA at 1-855-330-3305.
Free tax help
James : Aman feels that they need help with preparing their tax return. They are intrigued by the CRA's free tax clinics and may be able to get their taxes done by a volunteer for free!
The program is called the Community Volunteer Income Tax Program. In Quebec, it is known as the Income Tax Assistance – Volunteer Program.
You're eligible to have your taxes done through the program if you have a modest income and a simple tax situation.
Generally, a modest income is less than $35,000 for a single person and less than $45,000 for a couple.
Your tax situation is simple if, for example, you don't have a small business or income from a rental property.
Tax clinics are held all year. However, most clinics are offered in March and April. Many secondary and post-secondary institutions across Canada already host their own clinics. If your school is interested in hosting its own clinic, please reach out to us!
For more information or to find a clinic near you, please go to canada.ca/get-tax-help.
After doing their research, Aman finds out that they are eligible and finds a free tax clinic in their community to complete their tax return!
[The Community Volunteer Income Tax Program (CVITP) logo with the text "People helping people" in the center.]
What happens after you do your taxes?
James : Aman has done their taxes, so now what?
First, they will receive a notice of assessment. A notice of assessment is an evaluation of your tax return that the CRA sends you every year after you file. It includes the date we checked your return and the details about your refund or how much you may owe. The notice of assessment is an important document and should be kept with your tax records.
When you file your first tax return, you will receive your notice of assessment by mail. Then, you can register for CRA's My Account service and sign up to receive online mail going forward. I'll speak more about the benefits of My Account later in the presentation.
If you are expecting a refund, you will either receive a cheque attached to your notice of assessment or it will be deposited into your bank account if you signed up for direct deposit.
If you owe money and are unable to pay, contact the CRA to discuss your options. The CRA does have some flexibility when it comes to owing money. You can make a payment arrangement that lets you make smaller payments over time.
If you realize you made a mistake after filing your return, you can make changes once you receive your notice of assessment. Maybe you forgot to include employment income or forgot to request a tax credit. Changes like these can be made using your tax software with ReFile, online through My Account or by mail.
Aman also wonders what to do with their documents after they file. When filing electronically, keep all receipts and documents in case the CRA asks to see them later. For a paper return, the instructions will tell you what documents need to be attached, such as receipts and tax slips.
Keep all receipts and documents for at least six years after you file your return as the CRA may ask to review them.
[A student holds their laptop outdoors.]
James : Aman has some questions about their return but is a bit intimidated to call the CRA, so they asked their mom to help.
When Aman's mom phoned the CRA, Aman had to get on the phone and answer some confidentiality questions about themself first. Aman then gave the agent on the phone permission to discuss their file with their mom. This permission is only applicable to this phone call.
If Aman would like their mom to continue having access to their file, they can give their mom permission in My Account, or on paper by filling out Form AUT-01, Authorize a Representative for Offline Access, and sending it to the CRA.
Taxpayer information is confidential. The CRA needs your permission to share your tax information with another person, such as a family member, friend, or an accountant. So, choose someone you can trust!
You do not need to authorize someone as a representative if that person is only doing your taxes.
James : Aman is very excited about their upcoming 19th birthday. They heard that once they turn 19, they may be eligible to receive the GST/HST credit. You could be too!
The goods and services tax/harmonized sales tax credit, more commonly known as the GST/HST credit, is a quarterly tax-free payment for people with a low and modest incomes. It helps offset the GST or HST that they pay on goods and services.
To get it, all you have to do is file your taxes every year, even if you have no income to report.
The CRA will confirm if you are eligible, and how much you'll get when you do your taxes.
For more information, go to canada.ca/gst-hst-credit.
[An individual using a laptop outside.]
Climate action incentive payment (CAIP)
James : Just like the GST/HST credit, you may also be eligible to receive the climate action incentive payment when you turn 19.
The climate action incentive payment is a tax-free amount paid to help individuals and families offset the cost of the federal pollution pricing. It's available to residents of Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador and Prince Edward Island. It consists of a basic amount and a supplement for residents of small and rural communities.
The Government of Canada changed the payment method for the climate action incentive from a refundable credit claimed annually on personal income tax returns to quarterly tax free payments made through the benefit system since July 2022.
The amount you receive depends on your family situation and the province you reside in. For instance, based on the 2022 tax year, a couple with one child living in Alberta could be eligible to receive an annual credit of up to $1,351.
To get the climate action incentive payment, all you have to do is file your taxes every year, even if you have no income to report - just like the GST/HST credit.
For more information, go to canada.ca/line-45110.
[An individual filling out forms on a desk.]
Refundable vs. non-refundable?
James : As Aman is getting ready for university, they become interested in learning more about taxes and the benefits, credits and deductions that are available to students.
There are two different types of tax credits available – refundable and non-refundable.
Refundable tax credits are credits that can be paid to you if you are eligible and can result in a refund. Or they are paid in a series of payments throughout the year to assist with living expenses.
Non-refundable tax credits can help reduce or eliminate the tax you may have to pay. They cannot create a refund. So if you owed $600 in taxes and you are entitled to $500 in non-refundable tax credits, the credit will reduce what you owe to $100.
In the same scenario if you owe $200 instead of $600: The $500 non-refundable tax credit will reduce the taxes you owe to $0, but you will not receive a refund for the difference.
Common deductions and credits for students
James : Aman is starting their university studies soon and learns about the many tax deductions and credits that are available.
Aman plans on moving away to attend university and hears about moving expenses that can be deducted when filing your tax return. You can deduct moving expenses if you moved to go to school as a full-time student and your move was at least 40km closer to your school.
Some of Aman's new friends have children and tell them about child care expenses that can be deduct. If you have a child, you can also deduct child care expenses if you or your spouse or common-law partner paid for someone to look after them so one of you could earn income, go to school, or conduct research.
Child care expenses are deductible only if, at some time in the year, the child was under 16 or had a mental or physical impairment.
Other than these deductions, there are also non-refundable tax credits that are available, including the Canada employment amount and interest paid on your student loan.
There are also tax credits specific to students such as the tuition tax credit. The tuition tax credit is a non-refundable tax credit that allows students to reduce the income tax they may have to pay. If you don't need this tax credit to reduce your income tax to zero, you may be able to transfer it to an eligible family member or keep it to use in a future year.
For more information on deductions, credits, and expenses you may be able to claim as a student, go to canada.ca/taxes-students.
[A student holds a notebook outdoors.]
Disability tax credit
James : Another tax credit that we want to tell you about is the disability tax credit, or DTC for short.
The DTC is a non-refundable tax credit that helps people with severe and prolonged impairments, or their supporting family members, reduce the income tax they may have to pay.
If you are eligible for this credit, you or a supporting family member can claim up to $8,870. If you are eligible for the disability amount and were under 18 years of age at the end of the year, you can claim up to an additional $5,174.
Being eligible for the disability tax credit can also open the door to other federal, provincial, or territorial programs such as the registered disability savings plan and the disability supplement of the Canada workers benefit.
And on top of that, you may also qualify for provincial or territorial credits and benefits.
Also, certain education-related benefits that require an individual to be a full-time student, such as the scholarship exemption, can be claimed by a part-time student if they are eligible for the DTC for the year or have an impairment in physical or mental functions and a medical practitioner has certified in a letter that the impairment would not reasonably allow the student to be enrolled full-time.
For more information on the DTC, visit canada.ca/disability-tax-credit.
After learning about the DTC, Aman shares what they learned with a relative who has Type 1 diabetes and may be eligible.
[An individual in a wheelchair using a laptop and smiling while wearing a headset.]
My Account for individuals
James : You can register for the CRA's My Account after you do your taxes for the first time or have them done for you, and you receive your notice of assessment.
My Account is a secure portal that lets you view your personal income tax and benefit information and manage your individual tax affairs online. You can track your refund, view or change your return, view your mail online, such as your notice of assessment, check your benefit and credit payments and statements, manage your direct deposit, change your personal information, view any uncashed cheques, and more.
Along with doing your taxes every year, you must keep your personal information up to date to keep getting benefits and credits. This includes your address, marital status, number of children in your care and direct deposit information. You can update all of this information on your own through My Account!
For more information or to register for My Account, go to canada.ca/my-cra-account.
Aman registers for My Account as soon as they receive their notice of assessment. And now they're set! Aman has learned a lot about the importance of filing a tax return and the benefits and credits available to them. Now they have all the tools they need to file a tax return on time every year!
[A snapshot of the My Account "Overview" page.]
James : In addition to My Account, there are many digital services available from the CRA. Here are a few that I would like to tell you about.
Auto-fill my return - this is a secure CRA service that automatically fills in parts of your tax return with information the CRA has available at the time of your request, making it easier to do your taxes and helping prevent mistakes.
Direct deposit is a fast, reliable and secure way for individuals to get payments on time from the CRA in the event of unforeseen circumstances, such as a natural disaster, or an emergency.
Email notifications help prevent fraud. Email notifications from the CRA will let you know when changes are made to your personal information in My Account or there is CRA mail to view online.
For more information on CRA's digital services, go to canada.ca/cra-digital-services.
Want to learn more about taxes?
James : We would like to invite you to try out our online interactive tool called Learn about your taxes. Learn about your taxes is for students, first-time tax filers, newcomers, and anyone else who wants a refresher on how to do their taxes.
This online, self-directed tool takes you through starting your first job, completing a basic tax return, the purpose of taxes and much more. It has resources such as videos, common tax terms, lessons, exercises and links to websites where you can learn more.
There are also lesson plans for teachers and facilitators.
The Learn about your taxes tool is regularly updated with new content! Go to canada.ca/learn-about-taxes to dive in and check it out.
[A snapshot of the Learn about your taxes – Canada.ca webpage.]
Learn about your taxes
James : The learning tool currently has 7 modules and 26 lessons to help you through your tax filing journey. Each module takes you through different steps of preparing for and completing your tax return as well as what happens after.
For instance, the first module, called "Starting to work," has 4 lessons and covers topics related to your SIN, when to fill out a TD1 and what's on your pay stub and T4 slip. More topics will be added to the future, including content on self-employed income and the gig economy.
Throughout all of the modules, you will find definitions of tax terms, examples, tips and quizzes to put your knowledge to the test.
You can also access our multimedia gallery with plenty of helpful videos and products.
Again, this tool is constantly updated with new lessons, products and other content so be sure to check it out!
[A snapshot of the Learn about your taxes – Canada.ca webpage.]
Did the CRA really contact you?
James : Now, I want to talk to you about how to be scam smart and recognize different types of scams.
You should always be cautious if you receive communication that claims to be from the CRA.
When necessary, the CRA may need to legitimately contact you.
But scammers often attempt to imitate the CRA to try to steal your personal information. They may target you by telephone, text, instant messaging, email, or mail. Always be careful; the CRA will never ask you for your bank account number, credit card number, or passport number.
These scammers may insist that personal information is needed so you can receive a refund or a benefit payment. They can also threaten legal consequences to scare you into paying to the CRA a debt that does not actually exist.
There are also other communications that may urge taxpayers to visit a fake CRA website where the taxpayer is then asked to verify their identity by entering personal information. These are scams and you should never respond to these fraudulent communications or click on any of the links provided.
[A cellphone showing an incoming call from "Government of Canada". Text beside the phone reads "Is this the CRA calling?"]
Be scam smart!
James : Here's how you can be scam smart:
- never be afraid to question why the CRA needs your personal information, take a minute and think about it
- when in doubt, check My Account or My Business Account to see if you have mail or any amount owing: if you don't, then make sure to delete the fraudulent communications you received
- you can also call the CRA to check on communications
- and, go to canada.ca/be-scam-smart to learn more!
[Text on top of an individual's head reads, "Listen to your voice of reason before you act".]
James : And that's all for me! This is the end of our webinar. Thank you so much for joining us today and for following along on Aman's journey! We hope it was helpful!
Today's presentation will also be posted on the CRA's Individuals video gallery at canada.ca/individuals-video-gallery within a few weeks of our broadcast.
We also encourage you to visit our Upcoming Events page at canada.ca/cra-outreach-events to view and register for any of our upcoming webinars.
Thank you for listening and enjoy your day!
[A group of six students smiling on a stairway outdoors.]
- Date modified: