Tax Implications for Students Living in Canada For Their Studies

May 14, 2022 | Written by: Sohail Afzal

Tax Implications for Students Living in Canada For Their Studies

Students who are studying in Canada may be wondering about their tax obligations. Are they considered residents for tax purposes? And what are the implications if they are considered residents? In this article, we will explore the tax implications for students living in Canada and studying here. We will also provide tips on finding out if you are a resident or not. Let’s get started!

Resident or Not: That is the Question

As a general rule, students who come to study in Canada from another country are considered non-residents for tax purposes. This means that they are only required to pay taxes on income earned in Canada. They are not eligible for the same tax credits and deductions as Canadian residents. However, there are some exceptions to this rule. If a student meets any of the following criteria, they will be considered a resident for tax purposes:

  • Has been living in Canada for more than half of the year;
  • Has a spouse or common-law partner who is a Canadian resident;
  • Is a full-time student at a Canadian educational institution; or
  • Is a dependent child of a parent who is a Canadian resident.

What if You Are Considered A Resident?

If you are considered a resident for tax purposes, you will be required to pay taxes on your worldwide income. This means that you will need to file a tax return every year, even if you did not earn any income in Canada. You may also be eligible for certain tax credits and deductions.

There are different rules for tax depending on if you are a resident or not. If you are a student and come to Canada to study, usually you are considered a non-resident. This means that you only have to pay taxes on income from Canada. You can’t get the same tax credits and deductions as people who live here all the time. BUT, there are some exceptions to this rule.

How to Find Out If You Are a Resident?

So how do you find out if you are a resident or not? The best way is to speak with an accounting or tax firm specializing in Canadian taxes. They will be able to help you determine your residency status and provide guidance on the next steps. In addition, they can help with other aspects of your taxes, such as filing your return and claiming any available credits or deductions.

Should You File or Not?

If you determine that you are a non-resident for tax purposes, you may still need to file a tax return. This is because you may have taxes withheld from your earnings in Canada. If this is the case, you can file a tax return to get a refund of any taxes deducted.

Conclusion

Depending on their residency status, there are different tax implications for students living in Canada. It is important to speak with an accounting or tax firm to determine your status and understand what steps to take. In addition, they can help with other aspects of your taxes, such as filing your return and claiming any available credits or deductions. Do you have questions about your taxes as a student in Canada? Contact our team of experts today.

Sohail Afzal CPA Toronto

Sohail Afzal, CPA, CMA, MBA

Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.

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