Filing Income Tax

So it is tax season once more and you are struggling to understand whether you are required to file a return. Below we have answered the basic question of who is considered for income tax purposes.

Who should file income tax

If you fall into any one of these status living or working in Canada, you will be required to file your returns,
– Permanently living in Canada
– Leaving Canada temporarily or permanently
– Temporarily living in Canada

Here, we will discuss a little more in depth each status group,

Permanently living in Canada

Canadian Residents
If you are a resident or citizen living and working in Canada, you will want to file your return so you receive credit and benefit payments you are entitled to. If you are a legal representative of someone that had died in the year 2020, you may have to file a return for that person.

Newcomers to Canada – Immigrants & returning residents
If you are a newcomer leaving another country and settling in Canada, you will want to file your return as you may be eligible for the Canada Child Benefit, GST/HST Credit and other provincial and territorial programs.

Indigenous People
If you fall into the Indigenous People’s category, you are subject to the same tax rules as any other Canadian resident. We encourage you to file as you may be tax exempt under section 87 of the Indian Act based on your income. You are eligible and have access to all the same benefits and credits as all other Canadians.

Leaving Canada temporarily or permanently

Factual Residents & Government Employees
A factual resident of Canada is anyone who has left Canada however, has significant residential ties in Canada while travelling outside of the country whereby, you must file your return. You may be considered as factual in situations where you may be working, teaching, commuting, vacationing etc. outside of Canada and in another country. Government employees are usually considered factual residents

Live part-time in the U.S
If you live, vacation or spend most of the year in our neighboring country, the U.S. you are still obligated to file your return if you are still maintaining residential ties in Canada.

Leaving Canada – Emigrant
If you leave Canada to live in another Canada and sever your ties with Canada, you may be considered an emigrant for income tax purposes.

Temporarily living in Canada

If you are a non-resident of Canada with the following statuses, you will be considered a non-resident for income tax purposes.
– Non-resident of Canada
– Non-resident of Canada with rental income
– Deemed Resident
– International Student
– Seasonal Worker

Regardless of what status you are in, H&T Accounting Services are here to assist you with all your questions and concerns regarding your income taxes. Call today for a consultation!