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Taxes in Canada
Filing Your First Income Tax Return in Canada

The 2020 tax deadline is April 30, 2021. And if you became a permanent resident in 2020, you will have to file a tax return with the Canada Revenue Agency (CRA). Even if you lived in Canada for only part of the year, you will have to file a return if you:

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

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

Learning to navigate the Canadian tax system will make your life here a lot 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.

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 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?

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Apply for the Canada Child Tax Benefit

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. Some examples of benefits include:

  • Goods and Service Tax (GST) and Harmonized Sales Tax (HST) credit 
  • Canada child tax benefit 

Even if you didn’t earn income in Canada in 2020, 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 taxes in Canada even if you were in the country for a short period of time in 2020.

When is the 2020 Tax Deadline?

2020 tax deadline
2020 Tax Deadline: April 30, 2021

The 2020 tax deadline is April 30, 2021. If you owe taxes, you will have to pay the full amount on April 30. 

If you are self-employed, the deadline to file your income tax return is June 15, 2021. But if you owe taxes, you still have to pay by April 30, 2021.

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.

Can’t Pay Before the Deadline?

2020 was a tough year financially for many Canadians. So the CRA can help you if you will find it a challenge to pay any owing taxes by the deadline.

If you’re not able to pay in full, you can contact the CRA and arrange to make payments over a period of time. Learn more about how to pay your taxes here. There may be payment options that can help you avoid paying interest on your late payments. It’s better to work out a payment plan than to avoid dealing with money that you may owe.

Receiving a Tax Refund?

You will receive a refund if you have paid too much taxes in 2020. And if you file your taxes online, you may even get your refund in less than eight days.

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Avoid Fraud and 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.

It’s important to protect yourself from scammers. And if you get an email, phone call, letter, or text from the CRA that seems suspicious, you’ll know how to respond. 

Government of Canada Resources

Newcomers to Canada 2020: This brochure will help you to understand the Canadian tax system and what you require to complete your tax return.

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.

Doing 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.

Taxes in Canada: Online Learning Course

Learning about taxes: This course contains four learning modules:

  • One: Tax basics
  • Two: Income tax and you
  • Three: Your rights and responsibilities
  • Four: Doing your taxes

So if you arrived in Canada in 2020, even if you lived in Canada for a short period it makes sense to file your first income tax return. And with the 2020 tax deadline approaching, there is still time to file and 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.