Navigating taxes as an international student in Canada can seem intimidating, but understanding your responsibilities and following the right steps can make the process much easier. Whether you’re in Canada on a study permit or working part-time, filing your taxes correctly is essential for maintaining your legal status, avoiding CRA penalties, and potentially accessing benefits like tax refunds or government programs.
In this blog post, we will take you through the necessary steps to file your 2024 tax as a Canadian international student. We will look at who is required to file, what forms you need to submit, and how to maximize your return. So, let’s get started!
Step 1: Know Your Tax Obligations as an International Student
Since you are a foreign student in Canada, you’re either a tax resident or tax non-resident, depending on your situation. The most pertinent distinction is tax residential status and how it qualifies the kind of income you must report and qualify for tax credits.
- Resident for tax purposes: You are a resident for tax purposes if you have stayed in Canada for over 183 days in a year or if Canada is your home. It implies that you need to report your international income, including any foreign income earned by you.
- Non-resident for tax purposes: If you have been in Canada for less than 183 days, you would generally be a non-resident for tax purposes. You will only be required to file the income earned in Canada.
Tip: Even if you made no income or your income level is under the basic exemption level, you’re required to submit a tax return. This will make you a candidate for receiving Canadian tax credits and benefits, with a possible refund of taxes paid.
Step 2: Gather Required Documents
Before you go ahead with your tax return, collect all the documents you require in order to do it correctly. Here’s what you’ll require:
- T4 Slip: Your employer will provide this to you if you were employed that year and received a salary. It will indicate your income and the taxes withheld.
- T2202: Your institution completes this form and indicates how much tuition you paid. This is mandatory so that you can claim your tuition tax credit.
- Income Slips: If you were part-time employed or otherwise you received income, ensure that you have all slips (i.e., T4, T4A).
- SIN (Social Insurance Number): You will need your SIN so that you can complete your taxes in Canada since this number identifies you to the Canada Revenue Agency (CRA).
- Receipts for Eligible Expenses: Save receipts for any expense related to your education, e.g., books, transit fare, or any other expenses which are eligible as tax deductions.
Step 3: Choose the Right Tax Forms
There are a few forms that you would need to file when you return your Canadian taxes. The most commonly used ones are:
- T1 General Income Tax and Benefit Return: This is your individual tax return. International students will complete this return to declare income and tax deductibles or tax credits.
- Schedule 11: This return is completed in order to claim the tuition credits, which are very useful for international students as they have to pay tuition fees. You must complete this return so that your taxable income will decrease.
- NR73: If you’re not sure if you are a Canadian resident or non-resident for income tax purposes, you can use this form to request assistance from the CRA.
Tip: You can file your 2024 taxes online via CRA’s NETFILE option or use third-party software companies like WealthSimple, which is designed to simplify filing.
Step 4: Claim Eligible Tax Credits
You can claim a number of tax credits as an international student which can lower your tax bill or even result in a refund. Some of the most popular ones are:
- Tuition Tax Credit: You may claim the tuition tax credit as a student on qualified tuition fees you’ve paid to your school. Claim your T2202 form for this.
- GST/HST Credit: You, being a tax resident, may qualify to claim the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) Credit. It is a non-taxable payment offered to people with low income to allow them to be compensated for paying GST/HST.
- Canada Child Benefit (CCB): If you have kids living with you, you may be eligible for the Canada Child Benefit (CCB), a tax-free monthly payment to help cover the cost of raising children under 18.
- Transit Pass Credit: If you travel on a monthly transit pass, you may be able to claim a tax credit for the cost of transportation in certain provinces.
- Medical Expenses: If you had any medical expenses throughout the year, you can claim them as a tax expense.
Step 5: File Your Tax Return
You’ve got all your forms and documents together; now you’re all set to file your tax return. Here’s a brief overview of how to file your 2024 return:
- Online using NETFILE: If your tax situation is simple, the fastest way to file your tax return is via NETFILE, the CRA online service.
- By a Tax Professional: Or, if you do not want to prepare it yourself, you can pay someone a professional fee to do it for you. There are even professional tax preparers that specialize in dealing with international students’ tax returns.
- Paper Filing: Alternatively, you can file a paper return by sending your completed forms to the CRA.
Tip: Please file your tax return on or before April 30, 2025, to avoid fees or penalties. In the case of filing as a non-resident, your deadline is different, so contact the CRA.
Step 6: Keep Track of Your Tax Refund or Balance Owing
When your tax return is prepared, the CRA will send you a Notice of Assessment (NOA). The notice will indicate whether you owe taxes or are eligible for a refund.
- Tax Refund: If you have overpaid taxes, the CRA will send you a refund. You can have it deposited directly into your bank account or receive a cheque.
- Balance Owing: Pay the taxes you owe by the deadline to prevent penalties or interest from being charged to you.
Conclusion
Filing taxes as an international student in Canada needn’t be a daunting experience. With being properly prepared, knowledgeable about your tax obligations, and using available tax credits, you can make the experience as seamless as possible. Keep in mind, filing taxes isn’t merely for compliance; it’s a way to claim any possible refunds and government (CRA) benefits.
In the event that you ever wonder about something regarding the tax filing process, never hesitate and dial an experienced tax accountant who specializes in international students. They will give you expert advice and ensure that you are filing in the right way.
