If you’re a newcomer to Canada, you become a resident for income tax purposes when you establish significant residential ties (such as a home or spouse or dependants living in Canada) in the country. Usually, these are established the day you arrive in Canada.
If you don’t have a home, a spouse or common-law partner, or dependants living with you in Canada, you’ll still be considered a resident if you’ve any of the following residential ties:
- Personal property in Canada (car, furniture, etc.)
- Social ties (memberships in recreational or religious organizations in Canada)
- Bank accounts or credit cards issued in Canada
- A Canadian driver’s licence
- A Canadian passport
- Health insurance with a Canadian province or territory
Did you know? If you were a resident of Canada in an earlier year and you moved away from Canada, you’ll be considered a Canadian resident for income tax purposes when you move back and re-establish your residential ties.
As a resident of Canada, you must file a tax return, for part or all of the year, if you:
- Have to pay taxes or
- Want to claim a refund
Even if you didn’t have any income for the year, you should still file a return as it lets the Canada Revenue Agency (CRA) determine your eligibility for certain benefits like the GST/HST credit, Canada child benefit, and other provincial/territory programs.
Reporting the income that you earned before you became a Canadian resident helps the CRA determine the amount of non-refundable and refundable tax credits you’re entitled to. For example, in order to receive refundable credits in full, at least 90% of your income must come from Canadian sources.
Note: If your net income from foreign and Canadian sources for the year is zero, the 90% rule no longer applies and you’ll receive the full refundable credits you’re entitled to.