Who is Required by the CRA to File a Tax Return in Canada?

By Randall Orser | Investments

The Canadian government requires most citizens to file an income tax return annually. Even if you are new to Canada or just starting your first job you still need to file a return especially if any of the following applies to you:

  1. You owe tax to the CRA
  2. If you and your spouse want to split your pension income
  3. You participated in the Home Buyer's Plan or Lifelong Learning Plan and have repayments owing.
  4. You sold your home thereby disposing of capital property in this case you must file a return even you don't have to pay capital gains tax on the sale due to the principle residence exemption.
  5. You are self-employed and you have to pay your CPP premiums or your EI premiums on your self employment earnings.
  6. You have to repay any of your Old Age Security or Employment Insurance Benefits.
  7. You have received Canada Workers Benefit advanced payments in the tax year.
  8. CRA has sent you a Request to File or a Demand to File because you have not filed recently.

Whether or not you live in Canada does you will still have to file a Canadian Income Tax return, but it will affect how you file, what income you need to report and which credits or deductions apply to you. If you come under any of the criteria above you have to file a tax return.  Also if you live abroad but you receive income from your business or investments in Canada you will need to file a return.  

Your age has not bearing on your requirement to file a tax return as long as you fit one of the criteria above. Students are also not exempt, they must file a return if they have earnings from a summer job even if they are still in school and all must file a return as soon as they start earning income.

Sometimes it is in your best interest to file a return even if you are not required to. Some examples where this would be the case are;

  • You want to claim a refund
  • Even if you have no income you may still qualify for GST credits or provincial benefits.
  • If you want to claim the Canada Workers Benefit or Canada Child Benefit.
  • If you are a student and have eligible tuition fees, they must be declared on your return even if you are not using the credits this year.  In order to transfer or carry them forward they need to be reported on your current tax return.
  • If you or your spouse want to claim the Guaranteed Income Supplement on your Old Age Security payments.

About the Author

President/CEO Number Crunchers® Accounting Inc. Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.