Newcomers to Canada (immigrants and returning residents)

Topics

• Are you a resident of Canada?
  When do you become a resident of Canada for income tax purposes.
• When should you apply to receive benefits and credits?
  Apply right away to get the Canada child benefit, the goods and services/harmonized sales tax (GST/HST) credit, and any related provincial and territorial programs.
  • Are you eligible for benefits and credits?
  • How to apply for benefits and credits
  • After you apply for benefits and credits
• Property you owned before you arrived in Canada
• Do you have to file a tax return?
  • Which income tax package should you use?
  • Ways to file your return
  • When do you have to send the CRA your tax return?
• Completing your return
  • Identification and other information
    Residence information and your spouse's or common-law partner's information
  • What income do you have to report?
    Income to report for the part of the year you were not a resident of Canada and for the part of the year you were a resident of Canada
  • What deductions can you claim?
    Pension income splitting, moving expenses, support payments, treaty-exempt income, and other deductions
  • What non-refundable tax credits can you claim?
  • Refund or balance owing
    Federal and provincial or territorial tax credits, and federal and provincial or territorial foreign tax credits

Are you a resident of 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:

• protected persons (including refugees) within the meaning of the Immigration and Refugee Protection Act
• individuals who have applied for or received permanent resident status from Immigration, Refugees and Citizenship Canada
• individuals who have received "approval-in-principle" from Immigration, Refugees and Citizenship Canada to stay in Canada

If you were a resident of Canada in a previous year, and you are now a non-resident, you will be considered a resident of Canada 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.

When should you apply to receive benefits and credits?

Apply right away to get benefits and credits you may be entitled to.

To get these benefits and credits, you or your spouse or common-law partner must be one of the following:

• a permanent resident, even with a temporary address
• a protected person

As soon as you get your social insurance number, apply for benefits.

How to apply for benefits and credits

To apply for the Canada child benefit and to register your child or children for the GST/HST credit, fill out and send the following two forms to the Canada Revenue Agency (CRA):

• Form RC66, Canada Child Benefits Application (includes federal, provincial, and territorial programs)
• Form RC66SCH, Status in Canada and Income Information for the Canada Child Benefits Application

To apply for the GST/HST credit for you or your spouse or common-law partner, fill out Form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada for the year that you became a resident of Canada. Use this form only if you don't have children. If you have children under 19, use My Account or Form RC66, Canada Child Benefits Application (includes federal, provincial, and territorial programs).

If you live in Quebec, you should also apply for child assistance through Retraite Québec.

Include the following information with your application:

• Record of Landing or confirmation of permanent residence issued by Citizenship and Immigration Canada
• Citizenship certificate
• Notice of Decision or a Temporary resident’s permit issued under the Immigration and Refugee Protection Act
• valid temporary or permanent mailing address
• a void cheque if you are applying for direct deposit
• proof of birth for your children who were born outside Canada

After you apply for benefits and credits

You don’t have to apply for benefits and credits every year; however, every year you must:

• File your income tax and benefit return
  To continue receiving the benefit and credit payments that you are entitled to, you have to file your income tax and benefit return on time every year, even if you have no income in the year. If you have a spouse or common-law partner, they also have to file a return every year.
• Keep your personal information up-to-date
  To make sure you are getting the right amount of benefits and credits, you must keep your personal information updated with the CRA.
• Keep your supporting documents in case the CRA asks for them
  In the future, you may receive a letter from the CRA as part of the validation process, asking you to confirm your personal information.

Sign up for:

• direct deposit to make sure you never miss a payment in the mail
• the MyCRA mobile application or My Account so that you can get your personalized benefit information anywhere, anytime

• the benefits and credits electronic mailing lists to know when you will get your next payment

Property you owned before you arrived in Canada

If you owned certain properties (other than taxable Canadian properties) at the time you immigrated to Canada, the CRA considers you to have sold the properties and to have immediately reacquired them at a cost equal to their fair market value (FMV) on the date you became a resident of Canada. This is a deemed disposition.

Your property could include items such as shares, jewelry, paintings or a collection.

Usually, the FMV is the highest dollar value you can get for your property in a normal business transaction.

You should keep a record of the FMV of your properties on the date you arrived in Canada. The FMV will be your cost when you calculate your gain or loss from disposing the property in the future.

You dispose of your property when, for example:

• You sell it
• You give it 
• It is destroyed or stolen

If you have a loss resulting from the disposition of those properties, you can only deduct those losses from any gains you had from selling the same type of property. You cannot use this type of loss to reduce any capital gains you had from selling other types of properties.

Do you have to file a tax return?

Even if you lived in Canada for only part of the year, you may have to file an Income Tax and Benefit Return. 

File a return for 2021 if you:

• have to pay tax for the year
• want to claim a refund
• want to get benefit and credit payments

To continue getting the benefits and credits you may be eligible for, you need to do your taxes each year, even if you had no income. The CRA uses the information from your return to calculate the goods and services tax/harmonized sales tax (GST/HST) credit, Canada child benefit (CCB), and any related provincial or territorial amounts. For more information, see Do you have to file a return?

If you lived in Quebec on December 31, 2021, you may have to file a separate provincial tax return. For more information, visit Revenu Québec or call 1-800-267-6299.

If you have a modest income, a simple tax situation, and require assistance filing your return, you may be eligible to get free tax help from the Community Volunteer Income Tax Program (CVITP).

If you are self-employed or own a small business and need help understanding your tax obligations, you can get free in-person tax help from the CRA’s Liaison Officer Service.

Which income tax package should you use?

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 income tax package for the province or territory where you resided on December 31 of the tax year.

Ways to file your return

EFILE

This is a secure CRA service that lets authorized service providers, including discounters, complete and file your return electronically. For more information, go to EFILE for individuals.

NETFILE

Use the CRA's secure service to complete and file your return electronically using certified tax preparation software or a web tax application. Go to File your taxes online: Understand NETFILE for a list of software and applications, including some that are free.

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

If you are mailing your return, send it to Where to mail your documents. Do not mail your return to any other address.

When do you have to send the CRA your tax return?

To find out when you have to file your return, go to Filing due dates for the 2021 tax return.

Completing your return

Identification and other information

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

Residence information

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

Your spouse's or common-law partner's information

Their SIN

Enter your spouse's or common-law partner's SIN if they have one. Otherwise leave it blank.

Net income from line 23600 of their return to claim certain credits (even if the amount is "0")

Enter your spouse's or common-law partner's net world income for 2021 regardless of their residency status. Net world income is the net income from all sources both inside and outside of Canada. 

In the space under this line, enter your spouse's or common-law partner's net world income for the period that you were a resident of Canada.

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
• taxable part of scholarships, bursaries, fellowships, and research grants you received from Canadian sources

For the part of the tax year that you were considered a resident of Canada

You have to report your world income. World income is income from all sources inside and outside Canada.

In some cases, pension income from outside Canada may be exempt from tax in Canada due to a tax treaty, but you must still report the income on your return. You can deduct the exempt part on line 25600 of your return.

If you are a protected person (including a refugee) and you received funds from a charitable organization such as a church group or from an individual, 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.

The 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. The underground economy is often associated with the exchange of goods and services for cash where no records are kept.

What deductions can you claim?

You may be able to reduce your total income by claiming deductions that you qualify for. A deduction is an amount that is allowed to you provided that you qualify for it. If so, it’s subtracted from your total income. The result is called taxable income which is used to calculate your federal and provincial or territorial tax. The following deductions are some of the most common.

Registered retirement savings plan contributions

Generally, you cannot deduct contributions you made to a registered retirement savings plan (RRSP) in 2021 if this is the first year that you will be filing a return in Canada.

If you filed a return in Canada for any tax year from 1990 to 2020, you may be able to claim a deduction for RRSP contributions that you made in Canada for 2021. The CRA determines the maximum amount you can deduct based on certain types of income you earned in previous years.

You can view your RRSP deduction limit online on My Account or on the MyCRA mobile app.

For more information, go to Line 20800 – RRSP deduction.

Pension income splitting

If you and your spouse or common-law partner were residents of Canada on December 31, 2021, you can elect to split pension income that qualifies for the pension income amount (line 31400 of the return). 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 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 21900 – 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

Once you become a resident of Canada, you have to report your world income. World income is income from all sources inside and outside Canada. However, all or part of the income may be exempt from Canadian tax. This may be the case if Canada has a tax treaty with the country or region where you earned the income and there is a provision in the treaty preventing Canada from taxing the type of income you received. You can deduct the exempt part on line 25600 of your 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 the CRA.

Other deductions

You may be able to claim other deductions. For more information, go to Deductions, credits, and expenses.

What non-refundable tax credits can you claim?

A non-refundable tax credit is an amount that is allowed to you provided that you qualify for it. If so, it’s subtracted from your federal and provincial or territorial tax on taxable income.

As a newcomer to Canada in 2021, you may be limited in the amount that you can claim for certain federal non-refundable tax credits for 2021.

Federal non-refundable tax credits (on your return)

To determine the total amount you can claim, add the following amounts:

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

The total amount you can claim for each federal non-refundable tax credit cannot be more than the amount you could have claimed if you were a resident of Canada for the whole year.

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

Similar to the amount of federal non-refundable tax credits you can claim, as an immigrant, you may be limited in the amount that you can claim in 2021 for certain provincial or territorial non-refundable tax credits.

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.

Refund or balance owing

Federal tax credits

For the part of the year that you were a resident of Canada, if you were an eligible educator, you can claim the eligible educator school supply tax credit for eligible supplies expenses paid in 2021 that relate to the period of residency.

For the part of the year that you were not a resident of Canada, you can claim the above tax credit for eligible supplies expenses paid in 2021 that relate to the period of non-residency if:

• the Canadian-source income you are reporting for the part of the year that you were not a resident of Canada represents 90% or more of your net world income for that part of the year
• you had no income from sources inside and outside Canada for that part of the year

However, the total amount you can claim cannot be more than the amount you could have claimed if you were a resident of Canada for the whole year.

Provincial or territorial tax credits (Form 479)

You may be entitled to claim certain provincial or territorial tax credits. For more information, go to Provincial and territorial tax and credits for individuals for the province or territory where you resided on December 31 of the tax year.

Federal foreign tax credits (Form T2209)

After you become a resident of Canada, you may receive income from the country or region where you used to live or from another country or region. 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 region
• there is no provision in the tax treaty that prevents Canada and the other country or region 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 that you paid. For more information, go to Line 40500 – Federal foreign tax credit.

Provincial or territorial foreign tax credits (Form T2036)

Your province or territory of residence may offer this credit. For more information, go to the income tax package for the province or territory where you resided on December 31, 2021. If you were a resident of Quebec, see the Revenu Québec Guide to the Income Tax Return.

Which forms to use to calculate your tax and credits

To calculate your tax and credits, complete the return and Form 428 for the province or territory where you resided on December 31.

If you were a resident of Quebec on December 31, visit Revenu Québec. 

Forms and publications

• Pamphlet T4055, Newcomers to Canada
• Income Tax Folio S5-F1-C1, Determining an Individual's Residence Status
• Booklet T4114, Canada Child Benefit and related provincial and territorial programs
• Booklet RC4210, GST/HST Credit

Related topics

• Learn about your taxes
• Are you an international student studying in Canada?
• Foreign reporting
• Get your taxes done at a free tax clinic
• Free tax help for small business owners and self-employed individuals

Government partners

• BSF5113, ARCHIVED – Immigrating or Returning to Live in Canada (Canada Border Services Agency)
• Social Insurance Number – Apply (Service Canada)
• Work permit, study permit and confirmation of permanent residence requests (Canada Border Services Agency)
• Publication – Welcome to Canada: What you should know (Immigration, Refugees and Citizenship Canada)