Studying and working in Canada is great, but filing your tax returns can be a bit confusing. To make this process as smooth as possible for you, we’ve outlined the key facts about Canadian tax filing that you should be aware of!

Depending on your student visa, you may be eligible to work on or off-campus part-time during the school year. In Canada, if you are entitled to claim tax credits, you can earn up to a certain amount without paying tax. In 2022, this was $14,398. If you earn more than the tax-free threshold, you must pay tax on your income- this amount will be automatically deducted with each paycheck. If you earned income during the previous year, it’s important to file a tax return. Not only is it required by law and can result in fines if not completed, but you may also receive a refund; the average Canadian tax refund a Sprintax Canada customer receives is $998.

The first step is to determine your residency status so you know how you will be taxed. For tax purposes, international students will fit into one of four categories that are based on your residential ties:

1. Resident

2. Non-resident

3. Deemed resident

4. Deemed non-resident

As mentioned previously, your residential ties to Canada will determine which of the four options you fit into. Ties may include a Canadian driver’s license, a home in Canada, a Canadian bank account or credit card, health insurance with a Canadian province or territory, social ties in Canada, or a dependent.

What classifies you as a resident, non-resident, Deemed resident of Canada and Deemed non-resident of Canada? This will help!

Resident and Non-Resident Status

Residency is determined on a case by case basis and the CRA will look at multiple different factors. First you need to satisfy the 183 day rule, following that the CRA will look at your significant residential ties to Canada (both primary and secondary). You need to satisfy a mixture of both.

Deemed resident and Deemed non-resident

If you have not established significant ties to Canada but have stayed in Canada for 183 days or more during the calendar year and are not considered a resident of your home country when it comes to tax treaty terms between that country and Canada, you are likely a Deemed resident of Canada. You might be considered a deemed non-resident for tax purposes if you are considered a resident of another country with which Canada has a tax treaty, and have established significant residential ties with Canada.

Since many international students do have one or many of these ties, you can get more information on determining your residency right online to determine your status. You can also determine your Canadian tax residency status easily online with Sprintax Canada. Learn more here.

Do I have to file a tax return in Canada as an International Student?

International students who have lived in Canada, for even part of the year, likely need to file a tax return. If you meet any of the below items, you should file a tax return for the current year:

• You would like to claim a refund

• You have to pay tax for the year

• You would like to get benefit and credit payments

Didn’t receive income in the year? You might still want to file a tax return. Doing so allows the CRA to determine if you are eligible for:

• The goods and services tax/harmonized sales tax (GST/HST) credit

• Receiving the Canada child benefit

• Other benefits from certain related provincial or territorial related programs

Not filing a tax return when needed could mean fines and penalties from the CRA, along with any future visa you apply for being at risk, as you will be flagged because of your tax history.

Even if you don’t work in Canada or if you don’t have any taxes owing, you can still carry your tuition tax credit forward to the following year to reduce your tax bill. It is also possible to transfer this credit to certain relations if unused by the student.

How do I file my tax return?

You will need a variety of documents to file your tax return in Canada. To get started on your tax return and claim your tax back you will need:

Government Forms: Your T4 or final payslip and complete all relevant income and tax forms, such as the T1 (Income Tax and Benefit Return form).

Your Payslips: To set aside your final payslip from each job so they will be ready to go when you file.

Work-Related Expenses: Keep your receipts during the year for any eligible expenses and have them on hand when filing.

When it comes to completing your tax returns, you have the following options:

1. File your return yourself with help from our tax section and the Government of Canada’s guidance.

2. Consult a tax professional like Sprintax Canada for assistance. They will guide you through the tax preparation process from start-to-finish. By using their software, you can ensure that you have a clean tax record in Canada.

Sprintax Canada is the best non-resident tax prep software, which can help you complete your Canadian tax return in minutes. Simply create an account, answer a few questions and Sprintax will generate your tax return forms. 

Use the discount code PhoneBox10 at the end of the process to get $10 off the regular price!

Can I claim expenses in my return?

If you earned more than the tax-free allowance, you may be able to claim on the cost of certain expenses to reduce your overall tax liability. Expense examples may include:

• Medical

• Tuition

• Business

• Working from Home Costs

Tuition expenses can be claimed via T2202 form issued by your educational institution.

If you plan to claim expenses on your tax return it’s important to keep a receipt for any expenses you plan to claim back – for example a medical bill.

Do I need to report my foreign income?

Yes, non-residents must declare their net income earned outside of Canada on their tax return in order to avail of the non-refundable tax credits in Canada.

There is a 90% rule that comes in which states if you earned more than 10% (net) of your income outside Canada, you cannot avail of the tax credits. However, if you earned 90% or more of the income within Canada, then you can claim the credits.

It is important that your TD1 form be accurately completed when you begin your employment in Canada so you can obtain your tax credits. Claiming tax credits when you are not entitled to them could mean being faced with a tax liability at the end of the tax year.

If you need help, you can trust when it comes to your tax returns, we have partnered with Sprintax Canada as a recommended service you can use. 

Sprintax Canada will guide you through your Canadian tax preparation and ensure you are fully tax compliant. Their software is also the easiest way to ensure that you receive your maximum Canadian tax refund.

Here are just five reasons to check out their services:

1. Tax residency determination in minutes – work out your Canadian tax residency status online in minutes
2. Simple online process – the Sprintax Canada software guides you through your tax preparation
3. Claim your tax refund – Sprintax Canada provides accurate estimate of any tax refund due
4. Clean Tax Record – filing with help from Sprintax Canada means the security and peace of mind that you will be 100% compliant with the Canadian Revenue Agency
5. Connectability – ‘round the clock tax guidance through 24/7 live chat, social media support, e-mail, FAQs and more
   
   

Why use Sprintax Canada?

• Canadian tax software specifically developed for non-residents (such as temporary Visa holders and international students)
• Prepare your T1 Income tax return conveniently online
• Advice on tax residency status
• Maximum legal tax refund guaranteed
• 24/7 Live Chat tax support
• $10 discount with promo code PhoneBox10 at the end of the process