Starting Your Tax Journey with Confidence
If you’ve just started your first job, recently moved to Canada, or become eligible for tax credits and benefits, understanding how the Canadian income tax system works can feel overwhelming.
Cornerstone Advisory & Tax is here to make the process simple and clear. We help individuals and newcomers understand their tax obligations, access available credits and benefits, and file accurately and confidently — so you can focus on building your future in Canada.
What’s income tax?
- Income tax is a percentage of your earnings that is paid to the federal and provincial governments to fund essential public services such as healthcare, hospitals, education, transportation infrastructure, and other social programs.
- Canada uses a progressive (graduated) tax system, which means:
- The more you earn, the higher the tax rate you pay.
- Lower-income earners pay less, while higher-income earners contribute a larger percentage of their income in taxes.
- For 2025, no one in Canada is required to pay federal income tax on the first $16,120 they earn.
- This amount is called the Basic Personal Amount, and it helps reduce the overall tax burden for all taxpayers.
Who Needs to File Taxes in Canada?
Most people living in Canada are either legally required to file taxes or can benefit from filing, even if they are not obligated to.
Whether you’re a permanent resident, temporary foreign worker, international student, or even a visitor, you may have tax filing obligations if you are considered a resident of Canada for tax purposes.
If you maintain a home in Canada or have significant personal and economic ties to the country, it’s very likely that you qualify as a tax resident.
The Canada Revenue Agency (CRA) looks at factors such as:
- Having a home in Canada
- Having a spouse or common-law partner in Canada
- Having dependents in Canada
- Owning personal property in Canada
- Maintaining social ties with Canada
- Having economic ties with Canada
- Having provincial or territorial health insurance.
What Being A Tax Resident Means
If you are considered a resident of Canada for tax purposes, you may:
Be required to file an annual tax return, and
Be eligible to receive tax credits and benefits from the government.
It’s also possible to be a dual resident of more than one country. If Canada has a tax treaty with your other country, your residency will be determined based on where you have the strongest social and economic ties.
Not Sure About YOur Status?
If you’re unsure whether you quality as a Canadian Tax Resident, you can
Contact the CRA at
1-800-959-8281
File Form NR 73 or Form NR74
Determination of Residency of Leaving or Entering Canada
Or simply consult us
1-289-772-9888
FAQs
When are taxes due in Canada?
The deadline to file your 2025 income tax return is April 30, 2026. If you’re self-employed your taxes are due on June 16, 2026. However, it’s important to note that any amount due must still be paid by April 30, 2026. To avoid late-payment penalties, it’s recommended that you prepare your tax return well in advance of April 30th if you have self-employment income.
How long should I keep my income tax records?
The CRA requires that you retain your records for a minimum of 6 years, by law. You can ask to amend your tax return for up to the previous 10 years, so it’s a good idea to maintain your records for that long..
Does everyone need to file an income tax return?
If you’re a resident of Canada for any part of the year and earn income — whether from employment, self-employment, investments, or other sources — you are subject to Canadian income tax. There are no exemptions based on age or occupation, meaning everyone who earns income is required to report it.
How long does it take to get a tax refund in Canada?
The Canada Revenue Agency (CRA) aims to send you a Notice of Assessment — and any tax refund you may be entitled to — within the following timeframes:
2 weeks if you file your return online
8 weeks if you file a paper return
16 weeks if you file a non-resident return
I’m financially supporting my children who live back home. Am I allowed to claim them as dependants?
To claim someone as a dependant in Canada, one of the key requirements is that you must live with the dependant in a home you maintain. If you live in Canada and your child lives in another country, this condition isn’t met, so you generally can’t claim them as a dependant.
Here are a few important points to keep in mind:
The child amount (a tax credit for children under 18) was eliminated in 2015. This means if you’re married or living common-law, there’s no longer a tax credit you can claim for your children — whether they live in Canada or abroad.
The only exception is for children with impairments. In that case, the family caregiver amount may still be available — but only if your child ordinarily lives with both parents in Canada throughout the year.
How do I apply for benefits like Canada Child Benefit (CCB) or GST/HST credit?
To receive most government benefits and credits in Canada, including the CCB and GST/HST credit, you must:
File your income tax return every year. Even if you have no income to report, filing a return allows the Canada Revenue Agency (CRA) to assess your eligibility. Your benefits are based on your family income and tax information.
Apply once for the Canada Child Benefit (CCB)
You can apply when your child is born, when you become a resident of Canada, or when your child starts living with you. You can apply online through My Account (CRA), by mail, or when registering the birth of your child in most provinces. Once approved, you don’t need to reapply each year, but you must file taxes annually to keep receiving payments.
GST/HST credit is automatic
If you qualify based on your tax return, CRA will automatically determine your eligibility. No separate application is required, but your tax return must be filed on time.
Do I need to file taxes if I work temporarily in Canada?
Yes — in most cases, if you earn income in Canada, even on a temporary basis, you are required to file a Canadian income tax return.
Your tax obligations depend on your residency status for tax purposes:
Resident or deemed resident:
If the Canada Revenue Agency (CRA) considers you a resident or deemed resident of Canada (based on factors like your length of stay, residential ties, or family in Canada), you’ll generally report your worldwide income and may be eligible for credits and benefits.
Non-resident or deemed non-resident:
If you’re not considered a resident, you still need to file a return to report your Canadian-source income (such as employment income earned during your stay).
If you’re unsure about your tax residency status, you can file NR74 (for entering Canada) or NR73 (for leaving Canada) to request a determination from CRA.
What if I own property in Canada but live abroad?
If you live outside Canada but own property in the country, you may still have Canadian tax obligations — even if you are considered a non-resident for tax purposes.
If the property is rented out:
You must report your rental income to the CRA. Non-residents are generally subject to a 25% withholding tax on the gross rental income, which is typically remitted by the tenant or property manager.You may reduce the tax by electing under NR6 to pay tax on net income instead of gross.You’ll also need to file Section 216 return (Canada) to report the actual rental income and expenses.
If you sell the property:
Non-residents must notify the CRA and may need to pay tax on any capital gain. A clearance certificate (under T2062) is required to avoid the buyer withholding part of the sale proceeds.
Do I need to file T1135 if I only hold foreign mutual funds or ETFs?
Yes, if these funds are held directly with a foreign institution.
However, if they are held through a Canadian brokerage or within registered accounts (such as RRSP or TFSA), they are generally excluded from reporting