ARCHIVED - General information

On this page…

• Determining your residency status
• Before you start
• Do you have to file a return?
• What date is your return for 2005 due?
  • Deceased persons
  • Exception to due date of your return
• What penalties and interest do we charge?
  • Penalties
  • Interest
• Social insurance number (SIN)
• Canada Child Tax Benefit (CCTB) and Child Disability Benefit (CDB)
• Is this tax and benefit package for you?
• What tax and benefit package should you use if this one is not for you?
  • How can you get the tax and benefit package you need?

Determining your residency status

Were you a non-resident in 2005?

You are a non-resident of Canada for tax purposes throughout any period in which you do not have significant residential ties in Canada and you are not a deemed resident of Canada.

What income should you report? – Report your 2005 income from Canadian sources such as the taxable part of your scholarships, fellowships, bursaries, net research grants, income from a business, and taxable capital gains from disposing of taxable Canadian property, as indicated under the income lines applicable to non-residents of Canada in the guide.

What are residential ties?

Significant residential ties almost always include a home in Canada, a spouse or common-law partner, and dependants who stayed in Canada while you were living outside Canada. Other ties that may contribute to having significant ties include a Canadian driver's licence, Canadian bank accounts or credit cards, provincial or territorial hospitalization insurance coverage, personal property, and social ties in Canada.

For details on residential ties, see Interpretation Bulletin IT-221, Determination of an Individual's Residence Status, or contact the International Tax Services Office.

Were you a non-resident in 2005 who wants to elect under section 217?

Under section 217 of the Income Tax Act, you can choose to report certain types of Canadian-source income on a Canadian return and pay tax on that income using an alternate taxing method. Choosing to do this is called “electing under section 217.”

For detailed information on electing under section 217, including the types of income to which section 217 applies, see the section "electing under section 217".

Were you a non-resident in 2005 who wants to elect under section 216.1?

Under section 216.1 of the Income Tax Act, if you are an actor who is a non-resident of Canada, you can choose to report amounts paid, credited, or provided as a benefit to you for film and video acting services rendered in Canada on a Canadian return and pay tax on that income using an alternate taxing method. Choosing to do this is called “electing under section 216.1.”

Were you a deemed non-resident in 2005?

You may be a deemed non-resident of Canada for tax purposes if you were a resident of Canada in 2005, and, under a tax treaty, you were considered to be a resident of another country. If this is the case, the same rules apply to you as to a non-resident of Canada (including the way you complete your return).

Were you a deemed resident in 2005?

You were a deemed resident of Canada for tax purposes if you did not have significant residential ties in Canada, but you stayed here for 183 days or more in 2005 and, under a tax treaty, you were not considered a resident of another country.

You were also a deemed resident of Canada if you lived outside Canada during 2005, you did not have significant residential ties in Canada, and you were:

• a member of the Canadian Forces at any time in 2005;
• a member of the Canadian Forces overseas school staff and you choose to file a return as a deemed resident of Canada (if you left Canada during 2005, see ”Were you a member of the overseas Canadian Forces school staff who left Canada in 2005?”;
• a federal or provincial government employee and you were either resident of Canada just before being posted abroad or you received a representation allowance for 2005;
• a person working under a Canadian International Development Agency (CIDA) assistance program, if you were a resident of Canada at any time during the three-month period just before you began your duties abroad;
• a person who, under a tax treaty, agreement or convention between Canada and another country, is exempt from tax on 90% or more of your income from all sources in your new country of residence because of your relationship to a resident (including a deemed resident) of Canada; or

• a dependent child of one of the first four persons described above and your net income in 2005 was not more than the basic personal amount (see line 300) in Canadian dollars.

Note
If you lived with and were the spouse or common-law partner of one of the first four persons described above at any time during 2005, and you ceased to be a resident of Canada before February 24, 1998, you are a deemed resident of Canada unless you choose not to be. For details, contact the International Tax Services Office.

What income should you report? – Report your 2005 world income. World income is income from all sources both inside and outside Canada.

Were you a member of the overseas Canadian Forces school staff who left Canada in 2005?

If so, and you severed your residential ties, you became a non-resident of Canada. If this is your situation, you should use the 2005 tax package for the province or territory where you lived just before you left Canada. You should also get the guide T4056, Emigrants and Income Tax, for the special rules that apply to you.

However, you can file as a deemed resident of Canada while you are serving abroad. If you make this choice, you should use the 2005 tax package for the province or territory where you lived just before you left Canada. In future years, you will use the tax package for non-residents and deemed residents of Canada.

Did you live in Quebec just before you left Canada?

Even though we may consider you to be a deemed resident of Canada, under Quebec law you may also be considered a deemed resident of that province. If this is the case, you may have to pay Quebec income tax while you are serving abroad.

To avoid double taxation (surtax for non-residents and deemed residents of Canada plus Quebec income tax), attach a note to your return telling us that you are filing a Quebec provincial return, and that you are asking for relief from the surtax for non-resident and deemed resident of Canada.

Before you start

Do you have to file a return?

You have to file a return for 2005 if any of the following applies:

• You have to pay tax for 2005.
• We sent you a request to file a return.
• You were deemed resident of Canada at any time in the year and you disposed of property in 2005 (for example, if you sold real estate or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed amounts to you, or you are reporting a capital gains reserve you claimed on your 2004 return).
• You were a non-resident of Canada throughout 2005 and you disposed of taxable Canadian property in 2005.
• You have to repay any of your Old Age Security or Employment Insurance benefits. See line 235. If you were a non-resident of Canada in 2005, you will use the T1136, Old Age Security Return of Income, to pay back all or part of your Old Age Security.
• You have not repaid all of the amounts you withdrew from your registered retirement savings plan (RRSP) under the Home Buyers' Plan or the Lifelong Learning Plan. For details, see guide RC4135, Home Buyers' Plan (HBP), or guide RC4112, Lifelong Learning Plan (LLP).
• You have to contribute to the Canada Pension Plan (CPP). This can apply if, for 2005, the total of your net self-employment income and pensionable employment income is more than $3,500. See line 222
• You filed Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to Be Withheld, for 2005 and we approved it. If this is your situation, you have to file a return electing under section 217 of the Income Tax Act.
• You filed Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent From Real Property or Receiving a Timber Royalty, for 2005 and we approved it. If this is your situation, you have to file a return electing under section 216 of the Income Tax Act.
• You filed the Application by a non-resident of Canada (individual) for a reduction in the amount of non-resident tax required to be withheld on income earned from acting in a film or video production for 2005 and we approved it. If this is your situation, you have to file a return electing under section 216.1.

Even if none of these requirements applies, you still may want to file a return if any of the following applies:

• You want to claim a refund.
• You want to apply for the GST/HST credit. For example, you may be eligible if you turn 19 before April 2007,and you are a deemed resident of Canada.
• You or your spouse or common-law partner wants to begin or continue receiving Canada Child Tax Benefit payments.
• You have incurred a non-capital loss (see line 236) in 2005 that you want to be able to apply in other years.
• You want to carry forward the unused portion of your tuition and education amounts (see line 323).
• You want to report income for which you could contribute to an RRSP, in order to keep your RRSP deduction limit for future years up to date.

What date is your return for 2005 due?

Generally, your return for 2005 has to be filed on or before April 30, 2006.

Note
If you file your return after April 30, 2006, your GST/HST credit, Canada Child Tax Benefit, and Old Age Security benefit payments may be delayed.

Self-employed persons - If you or your spouse or common-law partner carried on a business in 2005 (other than a business whose expenditures are primarily in connection with a tax shelter), your return for 2005 has to be filed on or before June 15, 2006. However, if you have a balance owing for 2005, you still have to pay it on or before April 30, 2006. For details of how to make your payment, see line 485.

Non-residents electing under section 217 – For information on when your section 217 return is due, see “When is your section 217 return due?”

Non-residents electing under section 216.1 – For information on when your section 216.1 return is due, see “When is your section 216.1 return due?”

Deceased persons

If you are the legal representative (the executor, administrator, or liquidator) of the estate of an individual who died in 2005, you may have to file a return for 2005 for that individual. Get guide T4011, Preparing Returns for Deceased Persons , for details about your filing requirements and options.

Note
If you received income in 2005 for a person who died in 2004 or earlier, do not file an individual return for 2005 for that income on behalf of that person. However, you may have to file a T3 Trust Income Tax and Information Return for the estate.

Exception to due date of your return

When a due date falls on a Saturday, Sunday, or a holiday recognized by the CRA, we consider your return to be filed on time or your payment to be paid on time if we receive it or it is postmarked on the next business day.

What penalties and interest do we charge?

Penalties

If you owe tax for 2005 and do not file your return for 2005 within the dates we specify under "What date is your return for 2005 due?" in the previous section, we will charge you a late-filing penalty. The penalty is 5% of your 2005 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. Your late-filing penalty may be higher if we charged you a late-filing penalty on a return for any of the three previous years.

Tax Tip
Even if you cannot pay the full amount you owe on or before April 30, 2006, you can avoid the late-filing penalty by filing your return on time.

We may waive this penalty (as well as any interest that may apply; see the next section) if you file your return late because of circumstances beyond your control. If this happens, send a letter to us separately giving the reasons why you filed your return late. Only requests relating to tax years ending in any of the 10 calendar years before the year you make the request will be considered. For example, a request made in 2006 must relate to the 1996 or a subsequent tax year to be considered. For details, get Information Circular 92-2, Guidelines for the Cancellation and Waiver of Interest and Penalties.

You may have to pay a penalty for any amounts you fail to report on your return for 2005. If you also failed to report an amount on your return for 2002, 2003, or 2004, you may have to pay another penalty. However, if you tell us about an amount you failed to report, we may waive these penalties. See "What is a voluntary disclosure?".

Non-residents electing under section 217 – If you file your 2005 section 217 return after June 30, 2006, your election is not valid. If the correct amount of non-resident tax was not withheld, we will send you a non-resident tax assessment.

Non-residents electing under section 216.1 – If you file your section 216.1 return after the due date, your election is not valid. The 23% non-resident withholding tax will be considered the final tax liability.

Interest

If you have a balance owing for 2005, we charge compound daily interest starting May 1, 2006, on any unpaid amounts owing for 2005. This includes any balance owing if we reassess your return. In addition, we will charge you interest on the penalties indicated in the previous section, starting the day after your return is due.

Social insurance number (SIN)

Your social insurance number is the authorized number for income tax purposes under section 237 of the Income Tax Act and is used under certain federal programs. You have to give it to anyone who prepares an information slip (such as a T3, T4, or T5 slip) for you. Each time you do not give it when you are supposed to, you may have to pay a $100 penalty. You also have to give it to us when you ask us for personal tax information. Check your slips. If your SIN is missing or is incorrect, advise the slip preparer.

If you have requested, but not yet received a SIN or cannot get a SIN, and the filing deadline is near, file your return without your SIN to avoid the late-filing penalty and interest charges. Attach a note to your return to let us know. We will assign you a temporary taxation number (TTN). Please keep a record of that number in case we need to contact you.

If you are not eligible for a SIN, complete Form T1261, Application for a Canada Revenue Agency Individual Tax Number (ITN) for Non-Residents. Do not complete this form if you already have a SIN, individual tax number (ITN), or temporary taxation number (TTN).

Your SIN card is not a piece of identification, and it should be kept in a safe place. For more information, or to get an application for a SIN, contact Social Development Canada or visit their Web site at www.sdc.gc.ca . You can also contact Human Resources and Skills Development Canada or visit their Web site at www.hrsdc.gc.ca . You will find the addresses and telephone numbers of their offices on the Web pages mentioned above or in the government section of your telephone book.

If you are outside Canada, you can write to: Social Insurance Registration, P.O. Box 7000, Bathurst NB  E2A 4T1, CANADA, or call (506) 548-7961.

Canada Child Tax Benefit (CCTB) and Child Disability Benefit (CDB)

If you are a deemed resident of Canada or if you are the spouse or common-law partner of a deemed resident of Canada, and you are responsible for the care of a child who is under 18, you can apply for the CCTB for that child. To do so, submit a completed Form RC66, Canada Child Tax Benefit Application, along with any other documents required, as soon as possible after the child is born or begins to live with you. If you are a permanent resident, temporary resident, or protected person (refugee) as defined in the Immigration and Refugee Protection Act, you should apply as soon as possible after you and your child arrive in Canada.

In addition to the CCTB, you can also receive a CDB if your child meets the criteria for the disability amount and we have approved Form T2201, Disability Tax Credit Certificate, for the child.

Effective July 2005, the maximum annual Child Disability Benefit increased to $2,000 for each child who is eligible for the Disability Tax Credit. Under proposed legislation, certain conditions concerning the Disability Tax Credit will change. See line 316 for details.

The CCTB and CDB are based on the net income (line 236) shown on your return and, if applicable, your spouse or common-law partner's return. Therefore, to qualify for these benefits, you both have to file a return every year, even if there is no income to report.

However, if you are the non-resident spouse or common-law partner of a deemed resident of Canada, you will have to file Form CTB9, Canada Child Tax Benefit Statement of Income, instead of filing a return for purposes of the CCTB.

Once you have applied for these benefits, you have to advise us immediately of any of the following changes (as well as the date it happened or will happen):

• the child is no longer in your care, stops living with you, or dies;
• you move (if we do not have your new address, your payments may stop, whether you receive them by direct deposit or by cheque);
• your marital status changes (but if you separate due to a breakdown in your relationship, wait until you are separated for at least 90 days before submitting Form RC65, Marital Status Change);
• you receive your payments by direct deposit (see Direct deposit) and your banking information changes; or
• your or your spouse or common-law partner's immigration or residency status changes.

Certain changes could create a balance owing if you wait to notify us of any of these changes.

For more information, get pamphlet T4114, Your Canada Child Tax Benefit, or call us at 1-800-387-1193. If you are outside of Canada, call International Tax Services Office.

Is this tax and benefit package for you?

Use this package if any of the following applies to you:

• You were a deemed resident of Canada on December 31, 2005. For exceptions, see the following section “What tax and benefit package should you use if this one is not for you?”
• You were a non-resident of Canada throughout 2005 and you are filing a return to elect under section 217 or section 216.1.
• you were a non-resident of Canada throughout 2005 and you are reporting Canadian-source income other than from employment in Canada, from a business with a permanent establishment in Canada, from rental income from real property located in Canada, or from timber royalties on a timber resource property or a timber limit in Canada.

What tax and benefit package should you use if this one is not for you?

• If you were a deemed resident of Canada on December 31, 2005, and you are reporting only income from a business with a permanent establishment in a province or territory of Canada, use the package for that province or territory.
• If you were a deemed resident of Canada and you returned to Canada to live in 2005, use the package for the province or territory where you lived on December 31,2005.
• If you were a non-resident of Canada throughout 2005 and you are reporting only income from employment in Canada, or from a business with a permanent establishment in Canada, use the package for the province or territory where you earned the income. You should also get guide T4058, Non-Residents and Income Tax, for the special rules that apply.
• If you are also reporting other types of Canadian-source income (such as scholarships, fellowships, bursaries, research grants, or capital gains from disposing of taxable Canadian property), you will need Form T2203, Provincial and Territorial Taxes for 2005 – Multiple Jurisdictions, to calculate your tax payable.
• If you were a non-resident of Canada during 2005 and you received rental income from real property located in Canada or timber royalties on a timber resource property or a timber limit in Canada, and you are filing a return only to pay tax on this income using an alternative taxing method, use guide T4144, Income Tax Guide for Electing Under Section 216.
• If you resided outside Canada on December 31, 2005, but you maintained significant residential ties in Canada, generally we consider you to be a factual resident of Canada. Use the package for the province or territory where you kept your significant residential ties. However, this may not apply if you were a factual resident who, under a tax treaty, is considered to be a resident of another country. For details, see the section called “Were you a deemed non-resident in 2005?”
• If you were a newcomer to Canada in 2005, use the package for the province or territory where you resided on December 31, 2005. You should also get pamphlet T4055, Newcomers to Canada, for the special rules that apply.
• If you emigrated from Canada during 2005, use the package for the province or territory where you resided on the day you left Canada. You should also get guide T4056, Emigrants and Income Tax, for the special rules that apply.

How can you get the tax and benefit package you need?

You should have received the package you need based on our records. However, if, after reading the above information, you cannot use this package, see “Publications” to find out how you can get the one you need.

Regardless of which tax package you use, send your return to the International Tax Services Office. Use the envelope included in this guide. If you provide services in the film and television industry, send your income tax return to the Film Services Unit that serves the province or territory where the services were rendered.

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