Tax information for northern residents
April 9, 2021
Canada Revenue Agency
If you live or operate a business in the north, you may be able to receive benefits and credits by filing your income tax and benefit return.
Most Canadian income tax and benefit returns for 2020 are due on April 30, 2021, and the deadline to pay any balance due for individual income tax returns is also April 30th. Self-employed individuals and their spouse or common-law partner have until June 15, 2021 to file their return, but must pay any amounts owing by April 30, 2021. Filing your return on time every year allows the Canada Revenue Agency (CRA) to determine if you’re eligible to receive certain benefit and credit payments.
Sign up for direct deposit and file online to reduce impacts and delays
The CRA encourages you to sign up for direct deposit and file your income tax and benefit return online to get any refund faster and avoid delays. Don’t forget to sign up for My Account, the fastest and easiest way to view and manage your tax and benefit information. The CRA’s Get Ready page has information about online filing, deadlines, and helpful links.
File online this year on your own using NETFILE-certified software, through the services of an electronic filer who is registered to use our EFILE service, or through the Community Volunteer Income Tax Program (CVITP). If you choose to file online on your own, there are a variety of NETFILE-certified software products to meet your needs, some of which are free. Some of the software products can also provide you with information about benefits, credits, and deductions.
Free tax help for individuals
If you cannot file online, community organizations are hosting free virtual tax clinics for Canadians with a 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.
You may also be able to get help from the CRA’s Northern Service Centres in Whitehorse, Yellowknife, and Iqaluit. Due to COVID-19, these centres have suspended in-person service, but over the phone, a CRA officer can:
- answer your questions about benefits and credits
- help you respond to letters from the CRA
If you have tax questions related to living in the north, and your phone number starts with an 867 area code, you can call 1-866-426-1527 and talk with a CRA officer who understands northern tax matters.
Northern residents deductions
If you lived in a prescribed zone for a continuous period of at least six consecutive months, you and all the members in your household may be able to claim the northern residents deductions, which encompass:
- a residency deduction for having lived in a prescribed zone, and,
- a deduction for travel benefits you received from employment in a prescribed zone that was included in your income.
This period can begin or end in the tax year for which you are filing your return. If you are eligible, the deductions reduce the amount of income you pay tax on, so they will reduce your overall income tax liability.
If you received travel assistance from your employer and travel to and from a prescribed northern zone for personal reasons, you may be eligible to claim the deduction for travel benefits. You can claim travel expenses such as air/train/bus fares, vehicle expenses, meals, and hotel or motel accommodations. For meal expenses, you can claim them using a simplified method. If you choose this method, you are allowed to claim a flat rate of $23/meal, to a maximum of $69/day (sales tax included) per person, without needing to keep detailed receipts. However, you should still keep some documentation in case we ask you to support your claims.
COVID-19 benefits and your return
If you received COVID-19 benefits such as 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), enter on your return the total of the amounts you received. You will receive by mail a T4A slip (for benefits issued by the CRA) and/or a T4E slip (for benefits issued by Service Canada) with the information you need for your return. You can view tax slips online in My Account.
The benefits are taxable, and you may owe tax when filing your return depending on how much income you earned in 2020, and the credits and benefits you may receive:
- If you received the CERB or CESB, no tax was withheld when payments were issued.
- 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.
Some provinces or territories may have sent out pandemic related payments that are considered taxable income. These amounts should be included on your tax return.
It is important to file on time by April 30, 2021, if you receive COVID-19 recovery benefits such as the CRB, CRCB, or CRSB. The CRA uses information from both your 2019 and 2020 returns to confirm your eligibility to receive these benefits. Filing on time avoids having your recovery benefit payments stopped while we validate your eligibility.
Announced on February 9, 2021, targeted interest relief is being provided to Canadians 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. To qualify, individuals must have had a total taxable income of $75,000 or less in 2020 and have received income support in 2020 through one or more of the COVID-19 measures.
Self-employed individuals whose net self-employment income was less than $5,000 and who applied for the CERB will not be required to repay the benefit, as long as their gross self-employment income was at least $5,000 and they met all other eligibility criteria. 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 who are eligible for this relief.
We recognize that for some individuals, repaying these benefits could present significant financial hardship. For this reason, payment arrangement parameters have been expanded to give you more time and flexibility to repay based on your individual financial situations. 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.
Help for you and your family
Several benefits and credits are available to help you and your family. These include the Canada child benefit, the child disability benefit, the goods and services tax / harmonized sales tax credit, the Disability tax credit, and the Canada workers benefit.
It is important that you complete and file your return on time every year, even if you had no income. After you file your taxes, the CRA uses the information from your return to calculate benefits and credit payments, as well as any related provincial and territorial payments.
Canada Revenue Agency
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