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A father completing income taxes on his laptop with wife and young children in the background.
Filing taxes allows you to apply for child care tax credits and benefits

If you became a permanent resident in 2021, you will have to file your first income tax return with the Canada Revenue Agency (CRA). Even if you lived in Canada for only part of 2021 you will have to file a return if you:

  • want to get benefit and credit payments
  • want to claim a refund
  • have to pay taxes in Canada. 

Even if you didn’t earn income in Canada in 2021, it’s wise to file your first tax return in Canada so that you can apply for important benefits. If you do not file your income tax return, the government can’t pay the GST/HST or child tax benefit you may be eligible for. So it’s worthwhile to file your income tax return even if you lived in the country for a short period.

While filing taxes in Canada for the first time may seem overwhelming, there are many resources to help you (see the section below: Government of Canada Income Tax Resources). As well, many settlement agencies can help you to complete your taxes for the first time. This is just one of many important services that settlement agencies provide.

Understanding Canada’s Tax System  

Learning to navigate the Canadian tax system will make your life here much easier. Once you become employed, you will see that a good portion of your earnings goes to taxes, maybe more than what you were used to in your native country. 

Learn what portion of your earnings go to taxes

The taxes that you pay come back to you in the form of helpful public services and many gratuities that make Canada one of the most sought-after destinations for immigrants. Not only that, but you can recover part of your taxes and access tax credits when you file an income tax return each year.

What are Tax Credits?

Tax credits are sums that are deducted from the total taxes you owe. Depending on your situation, you may be eligible for one or more types of tax credits. When you claim deductions, you may receive a larger refund or reduce the amount of taxes that you owe. Here are some examples of tax credits and deductions that you could be eligible for:

When you claim certain tax credits, you will have to support your claim with receipts.

What Benefits Can I Receive?

When you file your income tax return, you can also apply to receive benefits. These benefits are payments that you will receive to pay for specific expenses and help to make living in Canada more affordable. Some examples of benefits include:

  • Goods and Service Tax (GST) and Harmonized Sales Tax (HST) credit 
  • Canada child tax benefit 
  • Provincial & territorial benefits & credits.
BenefitMarried or
common-law
with children
Single with
children
Married or
common-law with
no children
Single and 19
or older with
no children
Canada Child
Benefit
YesYesNo No
GST/HST CreditYesYesYesYes
Provincial & territorial
benefits & credits
YesYesYesYes
Are you eligible for benefits & credits? Source: Canada Revenue Agency (CRA)

When is the Deadline to File an Income Tax Return for 2021?

The deadline to file your income tax return in Canada is on or before April 30. However, because April 30th falls on a Saturday in 2022, the extended deadline falls on the next business day, Monday, May 2, 2022. If you owe taxes, you will have to pay the full amount on or before April 30, 2022

If you are self-employed, the deadline to file your income tax return is June 15, 2022. But if you owe taxes, you still have to pay by April 30, 2022.

When you owe money and do not pay by April 30, you will have to pay daily interest on the amount that you owe. And this can become expensive. So if you owe money, it’s best if you can pay back the amount in full to avoid paying interest and late fees.

How to File Your Income Tax Return

You can file your income tax return for 2021 in three different ways. 

1. EFILE:

EFILE lets authorized service providers complete and file your return electronically with the CRA. 

2. NETFILE:

This electronic tax-filing service lets you do your personal income tax and benefit return online and submit it directly to the CRA. 

3. Paper Income Tax:

You can also complete your income tax and benefit return by using a paper package. To order the 2021 Income Tax package click here.  

Free Online Tax Software:

You can file your return electronically using certified tax preparation software or a web tax application. Check out this list of free tax software products here including:  

  1. Wealthsimple Tax: this free autofill tax software allows you to easily complete a simple tax return and even provides a helpful guide to claiming deductions. If using Wealthsimple Tax for the first time you can even get $15 back. 

2. TurboTax (offers free and paid tax returns): The free tax return service applies to simple tax returns, but does not include income, credits, and deductions such as: 

  • Employment expenses (meals, lodging, etc.)
  • Donations
  • Medical expenses
  • Investment income and expenses
  • Rental property income and expenses
  • Self-employed income and expenses.

3. CloudTax (free and paid services): offers free ‘how-to’ videos, and a step-by-step guided application.

Free Tax Clinics:

You may be eligible to use the Community Volunteer Income Tax Program if you have a modest income and a simple tax situation.

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Avoid Fraud and Income Tax Scams

Unfortunately, scammers may try to get Canadians to pay debts that they do not owe. And tax season is a prime time for scammers. So you need to know when and how the CRA may contact you. Click here for information on how to protect yourself from fraud. This helpful information will help you to respond if you get an email, phone call, letter, or text from the CRA that seems suspicious. 

Government of Canada Income Tax Resources

Newcomers to Canada 2021: Refer to this PDF brochure if you left another country to settle in Canada in 2021. It will help you to understand the Canadian tax system and what you require to complete your first income tax and benefit return as a resident of Canada.

Newcomers to Canada (immigrants and returning residents): This site will help you to complete your first income tax and benefit return as a resident of Canada. The information is only for the first tax year that you became a new resident of Canada.

Get Ready to Do Your Taxes:  Get a quick overview of the documents you need to file your income tax return.

Don’t Get Scammed!: Learn when and how the CRA may contact you to avoid being a victim of fraud.

Common Tax Terms: glossary of terms to learn about your taxes.

Taxes in Canada: Online Learning Course

Young woman completing an online income tax learning course at her dining table.
Learn about personal incomes taxes in Canada with online learning resources

Learn about your taxes: This course can help you learn about personal income taxes in Canada. It contains six learning modules:

  • One: Purpose of taxes
  • Two: Starting to work (why you need a social insurance number)
  • Three: Preparing to do your taxes
  • Four: Completing a basic tax return
  • Five: After sending your tax return to the Canada Revenue Agency
  • Six: Using My Account.

In summary, if you arrived in 2021 and lived in Canada for a short period you should file first income tax return. And with the tax deadline to complete your 2021 approaching, there is still time to file an income tax return. This will allow you to claim deductions and apply for future tax benefits that will put money in your pocket!

Learn more about banking in Canada, and be on your way to financial security and success! From financial first steps to your earnings in Canada, you can learn more when you visit our banking in Canada resource page.