Canada is a popular destination for international students. If you're among them, we hope this information will be helpful as your study abroad adventure begins! When it comes to filing your taxes, we understand this can be a bit confusing, but that's why we're here! Depending on your program length, whether you have a job, and other factors, you may or may not need to file taxes in Canada. As an international student in Canada, you are considered a non-resident for tax purposes if you arrived in Canada less than 183 days ago. It means that you will only be taxed on the income you earn in Canada and not on your worldwide income. You will also be eligible for a few tax credits and deductions that Canadian residents are not. If you have been in Canada for more than 183 days during the year, you will be considered a resident for tax purposes and must file a tax return. It is the case even if you are only in Canada for a short period at the end of the year. You will be considered a resident of Canada for tax purposes if you:
- have been inside Canada for more than 183 days in the year
- have a spouse or common-law partner who is a Canadian citizen or permanent resident, and you have been living together in Canada
- have made Canada your home by maintaining ties such as a home, family, and belongings here
How to make sure if you need to file a tax return as an international student
As an international student in Canada, you may be required to file a Canadian tax return. The process of filing taxes can be confusing and overwhelming, but it is important to ensure you do it correctly. It is even if you did not earn any income while living in the country. Here is what you need to know about filing your taxes as an international student in Canada. It depends on your residency status if you're unsure whether or how much tax to pay. These are the four types of residency statuses in Canada:
- Deemed resident
- Deemed non-resident
Residential ties in Canada are what determine your residency status. Your residential ties include:
- Renting or owning a house or property
- Having a partner (spouse), a common-law partner or a dependent in Canada.
Some of the secondary residential ties include:
- Having a driver's license from Canada
- Being a member of a Canadian professional or trade organization
- Bank accounts in Canada
If you have any of the primary ties or some of the secondary ties, you will be considered a resident of Canada. If you don't have ties to Canada, you will be considered a non-resident.
Credits and deductions for international students
The government defines who is a resident of Canada. If you live in the country and meet certain requirements, they will also consider your home! It means that people with Canadian-resident status can claim tax benefits like tuition credits or rebates on their taxes because it's considered an expense incurred while studying here. Like any other person living outside would do if applicable to them at this time. The Canadian Revenue Agency (CRA) allows residents and part-year residents to claim a few deductions and credits, even if they have never filed a tax return. Deductions are expenses that you can subtract from your income. It lowers the amount of your taxable money. Credits differ from deductions because they lower the amount of taxes you owe.
What documentation do you need as an international student?
When you're filing your taxes this year, keep all the right documents with you to process them efficiently and accurately. Here's a list of some forms to ensure everything goes smoothly!
- Income tax slip a T4 or T4A
- Tuition receipt T2202A
- Donation receipt if you made any
- Medical expense receipts
Filing your taxes as an international student in Canada may seem daunting, but it is important to ensure that you do it correctly. By following the steps above and gathering the necessary documentation, you can file your tax return on time. You can always choose advisory services from a professional accounting and tax firm in Canada for help. For more information, don't hesitate to contact us!