New to Canada? Learn about the benefit of doing your taxes
March 12, 2021 Ottawa, Ontario Canada Revenue Agency
The Canada Revenue Agency (CRA) understands that COVID-19 has affected the usual ways Canadians manage their taxes. If you are new to Canada, the CRA understands that you may not fully know how to complete your tax return, and that’s ok! The CRA is here to guide you through the process and answer questions you may have. To get ready for a tax filing season like no other, we’ve put together helpful tips and information that you should know.
You can also watch our new video series for newcomers, available in 12 different languages: Benefits and Credits for Newcomers to Canada.
You have to complete and file an income tax and benefit return every year to receive certain benefits and credits to which you may be entitled to, pay Canadian taxes you may owe, or possibly get a tax refund.
Who should file a return?
If you and your spouse or common-law partner are residents of Canada and would like to receive any benefits or credits you may be entitled to, you should file an income tax and benefit return. Even if you have little or no income, you should still file to receive any benefits and credits you may be eligible for, such as:
- goods and services tax (GST) / harmonized sales tax (HST) credit
- Canada workers benefit
- Canada child benefit (CCB)
- related provincial or territorial payments
The filing due date for most individuals is April 30, 2021. If you or your spouse or common law-partner are self-employed and carried on a business in 2020 (other than a business whose costs are mainly connected to a tax shelter), you have to file your 2020 return on or before June 15, 2021. However, if you have a balance owing for 2020, you have to pay it on or before April 30, 2021 to avoid interest and penalties.
Doing your taxes, and doing them on time, is the best way to ensure your entitled benefit and credit payments are not interrupted. Even if you owe tax, don’t risk having your benefits interrupted by not filing. If you cannot pay your balance owing, we can work with you on a payment arrangement.
We have expanded the parameters that allow us to put in place flexible payment arrangements to reflect current realities resulting from COVID-19 and give taxpayers more time and flexibility to repay based on their ability to pay, recognizing taxpayers’ unique circumstances. Also, taxpayer relief is available if you can’t meet your tax obligations because of circumstances beyond your control. The CRA may cancel or waive penalties or interest under certain conditions.
If you are a newcomer to Canada and want to get the GST/HST credit, fill out and send Form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada, for the year you became a resident of Canada.
Sign up for direct deposit and file online to reduce impacts and delays
Due to COVID-19, it may take the CRA 10 to 12 weeks to process paper returns this year. For this reason, the CRA encourages you to sign up for direct deposit, and file online and on time to get your refund faster and avoid delays. We also encourage you to sign up for My Account; the fastest and easiest way to view and manage your tax and benefit information online, or My Business Account if you own a business.
The CRA’s Get Ready page has information on online filing, deadlines, and other helpful links for you. You can also check out our questions and answers about filing your taxes for help on COVID-19 benefits, and the tax filing process.
Do you have income to report? Did you receive COVID-19 benefit payments?
You have to report the income you received from all sources (inside and outside Canada) after becoming a resident of Canada. This is required under the Canadian Income Tax Act. The CRA uses that information to calculate your benefit and credit payments. If at any time during the year you owned specified foreign property, you may have to file Form T1135, Foreign Income Verification Statement.
If you received the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), or Canada Recovery Caregiving Benefit (CRCB) payments, these are considered taxable income, and you will have to enter on your return the total of the amounts you received. You will receive a T4A (for benefits issued by the CRA) and/or a T4E (for benefits issued by Service Canada) tax slip in the mail with the information you need for your return. You can view tax slips online as of February 8, 2021 in My Account. Residents of Quebec will receive both a T4A and RL-1 slip.
In addition, you may owe tax when filing your return. This will depend on your personal circumstances, and the type of COVID-19 benefits you received:
- If you received the CERB or CESB, no tax was withheld when payments were issued, and you may owe tax when filing your 2020 tax return.
- If you received the CRB, CRSB, or CRCB, 10% tax was withheld at source. However, this may not be all the tax you need to pay. When you complete your personal income tax return, you may need to pay more (or less), depending on how much income you earned in 2020.
There may be other impacts to filing your tax return that are specific to the COVID-19 benefit you received, or if you are a resident of Quebec.
Providing additional income support to individuals
Newly announced on February 9, 2021, targeted interest relief is being provided to individuals who received COVID-related income support benefits. Once individuals have filed their 2020 income tax and benefit return, they will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until April 30, 2022.
Self-employed individuals who applied for the CERB and would have qualified based on their gross income will not be required to repay the benefit, provided they also met all other eligibility requirements. The same approach will apply whether the individual applied through the CRA or Service Canada.
Some qualifying self-employed individuals whose net self-employment income was less than $5,000 may have already voluntarily repaid the CERB. The CRA and Service Canada will return any repaid amounts to impacted individuals.
Payment arrangement parameters have been expanded to give Canadians more time and flexibility to repay based on their ability to pay. Individuals who cannot make a payment in full are advised to contact the CRA to make a payment arrangement.
Can you get help to file a return?
If you are unable to file online, community organizations are hosting free, virtual tax clinics for individuals with a low to modest income and a simple tax situation. Volunteers may be able to complete and file your return for free, by videoconference, by phone, or through a document drop-off arrangement. These virtual clinics will be held temporarily to help taxpayers with their taxes while still following physical distancing guidelines.
If you are a small business owner or are self-employed, or you have rental income, and want help understanding your tax obligations and possible tax deductions, book a free virtual visit with the CRA’s Liaison Officer service by phone or videoconference, using our online request form.
What happens after you file a return?
After you file a return and receive a notice of assessment from the CRA, you will be able to register for My Account. My Account lets you quickly access your tax, benefit, and credit information online. You can also use it to:
- track the status of your return and refund
- apply for benefits and credits
- update your address
- register for email notifications
- make a payment
Protecting you from scams and fraud
We recognize that there is a significant financial and emotional effect on victims of scams, fraud, and identity theft and we are doing our best to protect Canadians and ensure they receive the benefits to which they are entitled.
It is important to protect yourself from scams, and to know when and how the CRA might contact you. The Slam the scam webpage provides information about how people can protect themselves from fraud and understand the ways in which the CRA will be in touch.
The CRA also provides information to Canadians on securing their CRA accounts. As fraud prevention measures, we encourage them to:
- Use unique and complex passwords. Always use unique passwords for your CRA and online banking accounts. Do not reuse the same password for different systems.
- Create a PIN. We suggest you set up a personal identification number (PIN) in My Account or with the help of one of our call centre agents, to help confirm your identity for future calls with the CRA.
- Sign up for email notifications. We recommend you enable “Email notifications”. This service notifies taxpayers by email if their address or direct deposit information have been changed on CRA records. These notifications can act as an early warning for potential fraudulent activity.
- Monitor your account for suspicious activity. Check your online CRA accounts regularly for any suspicious activity. This includes unsolicited changes to your address and direct deposit information, or benefit applications made on your behalf.
How can you get more information?
To learn everything you need to know about filing your return as a newcomer, go to canada.ca/taxes-newcomers. That page will give you information on:
- residency status
- completing an income tax and benefit return
- filing your tax return electronically
- when and how to apply for benefits and credits
- claiming credits and deductions
- contacting the CRA for help
Canada Revenue Agency
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