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 (for example, child tax benefits and GST/HST refunds can’t be paid if you have not filed your taxes)
- claim a refund
- have to pay tax.
While filing taxes for the first time in Canada may seem overwhelming, there are many resources to help you (see Government of Canada Resources section below).
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. These taxes come back to you in the form of effective 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 by filing a yearly tax return.
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. A few examples of Canadian tax credits are:
- Child care expenses deduction
- Canada caregiver credit
- Education deductions and credits
- Disability tax credit
- Child care expenses deduction
- All deductions, credits, and expenses
When you claim certain tax credits, you will have to support your claim with documentation.
What Benefits Can I Receive?
When you file your tax return, you can also apply to receive benefits. The 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
If you do not file your taxes, the government can’t pay the child tax benefits and GST/HST credits you may be eligible for.
What Deductions Can I Claim?
When you claim deductions, you may receive a larger refund or reduce the amount of taxes that you owe. Here are a few examples of deductions you may be able to claim:
When Do I Have to File My 2020 Tax Return?
The deadline to file your 2020 taxes 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 taxes is June 15, 2021. But if you owe money, 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?
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.
Receiving a Tax Refund?
You will receive a refund if you have paid too much taxes in 2019. And if you file your taxes online, you can get your refund in less than 8 days.
Need Help to File Your Taxes?
Settlement Agencies Can Help You Complete the Forms
Find more resources to help you settle with success!
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 2019: This brochure will help you to understand the Canadian tax system and what’s required 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 what’s required to file your income tax and benefit return
Don’t get scammed!: Learn when and how the CRA may contact you.
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 4: Doing your taxes