Webinar - International Students

Transcript – International students webinar

Webinar for international students studying in Canada

Munishi: Hello, and welcome. My name is Munishi. I’m with the Canada Revenue Agency, or the CRA for short, and I’m very happy to be here.

Today, I’ll talk about taxes, benefits, and credits available for international students studying in Canada.

[Three individuals looking at each other laughing.]

Land acknowledgement

Munishi: I wish to acknowledge that the lands on which I am presenting from is the traditional territory of many nations including the Mississaugas of the Credit, the Anishnabeg, the Chippewathe Haudenosaunee and the Wendat peoples and is now home to many diverse First Nations, Inuit and Métis Also, I acknowledge that land is covered by Treaty 13 with the Mississaugas of the Credit.

Given that we are meeting virtually, I also want to acknowledge the lands on which you are gathered from coast to coast and invite you to take a moment of silence to have a thought for the territory in which you find yourself.

[Indigenous symbols of an eagle, whale, instrument, leaf, boat, and infinity shape.]

Outline

Munishi: In this presentation, you will learn about:

• Canada’s tax system
• residency status for income tax purposes
• filing an income tax return
• tax credits for students
• the underground economy
• ways to do your taxes
• online services
• the Learn about your taxes online learning tool and
• scams

[Individual walking outside with a laptop in their hand.]

Why do we pay taxes?

Munishi: Let’s start with why we pay taxes and what they’re for.

Many public services, programs, and benefits are made possible through taxes. The government collects taxes to pay for things such as airports, education, emergency services, health care, libraries, roads, and social programs.

The taxes we pay in Canada also help put money into the pockets of students, families, newcomers, seniors, and peoples with disabilities. This money is distributed through benefit and credit payments.

They also fund social programs such as income support and old age security to help members of our community.

Taxes can be municipal, provincial, territorial, or federal. Today, we’ll be focusing on federal income tax.

[Multiple pictures: a bridge, medical professional speaking to an individual, children on a playground, individuals in a community swimming pool, fire station, garbage collection.]

Canada’s tax system

Munishi: Canada's tax system is based on a self-assessment principle. This means that every taxpayer is responsible for:

• filing their own tax return each year;
• reporting their income from all sources, both inside and outside Canada; and
• calculating whether they owe taxes or will get a refund.

It is also the taxpayer’s responsibility to ensure that:

• they file tax returns on time;
• they declare accurate and complete information; and
• they notify the CRA of any changes to their personal information.

It’s important to note that the CRA relies on the information taxpayers provide to issue benefit and credit payments. If no return is filed, no benefits or credits can be issued.

Understanding your responsibilities

Munishi: As an international student in Canada, you should understand what your rights, entitlements, and obligations are under Canada's tax system.

You are responsible for determining your residency status for income tax purposes. And according to the law, you must pay what you owe in taxes for each year.

If you would like to know more about your rights as a taxpayer and possible entitlements, visit canada.ca/newtocanada.

Residential ties for income tax purposes

Munishi: You become a resident of Canada for income tax purposes when you have significant residential ties in Canada. And usually, you create these ties on the date you arrive.

Residential ties may include:

• a home in Canada, for instance if you own or rent a home in Canada for personal use;
• a spouse or common-law partner in Canada, or dependants who move to Canada to live with you;
• personal property, such as a car or furniture; or
• social ties in Canada, like enrolment in a sports activity, being a member of a religious organization, or having a membership to recreational activities such as a gym, school association or library.

Other residential ties relevant to determining your residency status may include, but are not limited to, a Canadian driver's licence, Canadian bank accounts or credit cards, and health insurance with a Canadian province or territory.

[Individual walking outside with a laptop in their hand.]

Residency in Canada for tax purposes

Munishi: Your residency status for income tax purposes is different from your immigration status.

Your residential ties and the duration of your stay in Canada determine your residency status.

You are one of the following types of residents for income tax purposes:

• a resident if you have significant residential ties with Canada, regardless of the number of days spent in Canada;
• a deemed resident if you do not have significant residential ties with Canada, but:
  • you stay in Canada for 183 days or more in one calendar year, and
  • you are not considered a resident of your home country under the terms of a tax treaty between Canada and that country. To find a tax treaty go to canada.ca/cra-tax-treaties
• a non-resident if you stay in Canada for less than 183 days during the year and you do not have significant residential ties with Canada;
• a deemed non-resident, meaning you have significant residential ties with Canada but are considered a resident of another country with which Canada has a tax treaty.

Determining your residency status – Resident

Munishi: Now, are you able to determine your residency status? Let’s look at some other useful information together.

When determining your residency status as an international student, you establish significant residential ties with Canada if you:

• rent a room, a house or an apartment;
• have utility bills, such as electricity, gas, phone, internet;
• find a job;
• open a Canadian bank account or apply for a credit card;
• buy a car or furniture;
• have a Canadian driver’s license;
• have health insurance with a Canadian province or territory.

Determining your residency status – Non-resident

Munishi: On the other hand, you have not established significant residential ties with Canada if you:

• return to your home country on a periodic basis or for a significant amount of time in the calendar year;
• move to another country when not attending school in Canada. This is different from taking a vacation in another country;
• don’t have a permanent place to live in Canada or give up your apartment or room;
• don’t have personal property in Canada or get rid of your belongings such as your furniture or car.

If you need help to determine your residency status for tax purposes, you can fill out Form NR74, Determination of Residency Status and send it to the address on the form. The CRA will give you their opinion about your residency status.

For more information on determining your residency status, go to canada.ca/newtocanada.

Frequently asked question 1

Munishi: Throughout the presentation, I will go over some common questions we get.

The first question:

I came to Canada to attend university. Do I need to file a tax return, if I don’t work or have no income?

The answer is: If you determine you are a resident of Canada for tax purposes, it’s important to file a tax return and report your income even if your income was zero. The CRA needs this information to calculate your benefit payments.

Frequently asked question 2

Let's examine this situation.

The question is am I a resident of Canada for tax purposes if:

• I’m on a study permit and a full-time student;

• I live in a room on campus;
• I work 20 hours per week at the campus cafeteria;
• I pay monthly gym fees;
• I opened up a bank account in Canada;
• I pay a monthly fee for a Canadian phone number; and
• I go back to my country at Christmas to visit family and friends.

The answer is: Based on the information provided, you would be considered a resident of Canada for income tax purposes and should file a tax return.

Work while you study

Munishi: As an international student studying in Canada, you may be asking yourself these questions:

• Am I eligible to work in Canada?
• Do I need a work permit?
• When, where and how much can I work?

Immigration, Refugees and Citizenship Canada, also known as IRCC, will be able to answer your questions.

For more information, visit canada.ca/immigration-refugees-citizenship.

[Two persons working in a restaurant.]

Social insurance number (SIN)

Munishi: To work in Canada, receive benefits and services from the government, and do your taxes, you need a social insurance number, also called a SIN.

A SIN is a 9-digit identification number unique to you. You are the only person who is supposed to use it, and you are responsible for keeping it safe. If your SIN gets into the wrong hands, it could lead to fraud or even identity theft.

You will need to give your SIN to your employer when you start a job and to your bank when you open an account. They are responsible for protecting your personal information. They use your SIN to send information about your income to the CRA.

You also need to provide your SIN to government agencies or departments to access a benefit or service. For example, you’ll give your SIN to the CRA when you do your taxes or complete a benefit application form. Here, your SIN will help identify you in the CRA’s system.

Finally, you will also need to give your SIN to your school’s administration so they can issue Form T2202, Tuition and Enrolment Certificate, which you will need in order to claim the tuition tax credit.

The federal organization that issues SINs is Service Canada. You can apply for a SIN online, by mail, or in person. You will have to provide or send in a document that proves your identity.

To find a Service Canada office, visit canada.ca/service-canada-office or call 1-800-622-6232. For more information on the SIN, go to canada.ca/social-insurance-number or call 1-866-274-6627.

What to do if you do not meet the eligibility criteria for a Social Insurance Number (SIN)

Munishi: If you or your spouse or common-law partner don’t meet Service Canada’s eligibility criteria for a SIN, you can still file an income tax and benefit return and apply for some benefits and credits with the CRA.

To do so, send us your tax return or benefit and credit application with a note explaining why you or your spouse or common-law partner cannot get a SIN.

Along with the note, include a photocopy of any document that proves your identity or that of your spouse or common-law partner.

This document could be a:

• passport
• driver’s licence
• proof of birth, or
• any document issued by Immigration, Refugees and Citizenship Canada such as study permit or temporary resident permit

The CRA will then give you a temporary tax number you can use until you get your SIN. You can use it on your application forms and on your income tax and benefit return.

It is important to use the same first and last names in all your interactions with the CRA.

If you have more than one first or last name, make sure you always use them in the same order.

If you only have one name, whether it is a first name or a last name, you should always enter it as a last name. This will ensure it is recognized correctly in the CRA’s systems.

Do you have to complete an income tax return?

Munishi: Now that we’ve explained how you can determine your residency for tax purposes, let's discuss reasons why you would have to complete a tax return.

If you are a resident, then generally, you must complete a tax return if:

• you have to pay tax;
• you want to receive a tax refund that you are entitled to; or
• you want to receive benefits and credits that you may be eligible for.

When you file taxes, you are filing for the calendar year, January 1 to December 31.

For the first year you became a resident of Canada for income tax purposes, your total income should include your income from all sources from the date you entered Canada to December 31 of that year.

For example, if you arrived on June 1, you will have to report your income received from June 1 to December 31.

The deadline to do your taxes for the previous calendar year is generally April 30 every year.

For more information or if you need to file a tax return, visit canada.ca/newtocanada.

[Student doing work on a laptop.]

Total income

Munishi: To do your taxes in Canada, you need to understand your total income.

Your total income includes your income from all sources, both inside and outside Canada.

You can receive many different types of income, including employment income. Employment income includes any income you receive from your job, such as tutoring or working on or off campus.

Your total income also includes any tips or gratuities you receive from your job and any bursaries or grants you receive for your studies or research.

Note that in Canada, some sources of income are non-taxable and do not have to be reported on the income tax return.

Non-taxable income can include payments for the Goods and services tax/harmonized sales tax credit, commonly called the GST/HST credit, and the Canada child benefit. Money or gifts from parents or family members are also non-taxable.

For more information, visit canada.ca/doing-your-taxes and canada.ca/taxes-individuals.

Frequently asked question 3

Munishi: Question: I am an international student studying in Canada and my spouse lives overseas. I know I have to file an income tax return but does my spouse need to?

The answer is: If your spouse is a non-resident for income tax purposes and does not have income from Canadian sources, they do not need to file an income tax return in Canada.

However, the CRA may ask you for your spouse’s world income if you are applying for benefits and credits, like the GST/HST credit. This information is only needed to calculate the amount you’re entitled to.

Frequently asked question 4

Munishi: Next frequently asked question is: My family back home sends me money every month to help me pay for my studies.

Should I report this amount as income?

The answer is: Money received from a parent or guardian to help you while you reside in Canada is non-taxable and you don't need to declare it when you do your taxes.

Frequently asked question 5

Munishi: We will introduce our next section with the following two questions.

What is the difference between a benefit and a credit?

In most cases, a benefit is an amount you receive monthly or an amount you receive four times a year.

You usually fill a form to apply for a benefit at any time of the year.

For instance:

• The Canada child benefit and
• The Child disability benefit

When doing your taxes, you can claim credits to reduce the amount of tax you owe.

There are refundable tax credits and non‑refundable tax credits. Depending on the type of credits you can claim, the amount of tax you owe will either be smaller or zero or you will get a refund.

For instance:

• The Disability tax credit and
• The Tuition tax credit

Now, I bet you are asking yourself the following question!

Frequently asked question 6

Munishi: What is the difference between a refundable and a non‑refundable tax credit?

Like we just saw:

• Both are claimed on your income tax return.
• And, both reduce the amount of tax you might owe.

Once your amount of tax payable has been reduced to zero, the remaining balance of:

• refundable tax credits are paid to you;
• while non-refundable tax credits are not paid to you.

As an example, let’s figure you owe $600 in taxes.

In situation A:

• You are entitled to a $700 refundable tax credit.
• It reduces what you owe to zero plus you get a $100 refund.

In situation B:

• You are entitled to a $700 non‑refundable tax credit.
• What you owe is reduced to zero.

Now, we’re ready to jump in and learn more about the benefits and credits you may be entitled to.

Learn about the benefits and credits you may be entitled to!

Munishi: If you are a resident or deemed resident of Canada, you may be eligible for certain benefits and credits. Non-residents or deemed non-residents of Canada are not eligible.

These benefits and credits include:

• The Canada child benefit
• The GST/HST credit
• The disability tax credit
• The child disability benefit
• The climate action incentive payment also known as the CAIP, and
• The tuition tax credit

Applying for some of these will also register you for related provincial or territorial payments.

For more information on benefits and credits, visit canada.ca/child-family-benefits.

[Two individuals sitting on a couch smiling, reading documentation, with an open laptop sitting on a table in front of them.]

GST/HST credit

Munishi: Have you noticed that when you buy goods or services, the merchant charges you a federal tax, the goods and services tax or GST, and a provincial tax, the harmonized sales tax or HST. In the province of Quebec, the provincial tax is called the Quebec sales tax or QST.

The GST/HST credit is a tax-free payment for people with low and modest incomes. It helps offset the GST and HST paid on goods and services. There is no need to keep your receipts from all the things you purchased.

The payment is issued four times a year, around the fifth of July, October, January and April.

If you are entitled to receive the GST/HST credit, you could start receiving up to $496 per year.

If you sign up for direct deposit, you’ll get your benefit and credit payments the day they are issued – no waiting for a cheque in the mail! That’s cash in your pocket! Or, better yet, in your savings account!

For more information on the GST/HST credit, visit canada.ca/gst-hst-credit.

[A student working outside on a laptop.]

Applying for the GST/HST credit and the Climate action incentive payment (CAIP)

Munishi: As an international student, you may be eligible for the GST/HST credit and the CAIP as soon as you arrive in Canada.

Like the GST/HST credit, the CAIP is tax-free. It is paid to help individuals and families offset the cost of federal pollution pricing. It is available to residents of Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and New Brunswick.

You do not need to wait to do your first tax return before you can get the GST/HST credit. Complete Form RC151, GST/HST Credit and Climate Action Incentive Payment Application for Individuals Who Become Residents of Canada to apply.

On the form, include the income you earned outside Canada for the year you became a resident of Canada and from the year before, or two years before, depending on the date you became a resident. It’s important to report your income, even if it was zero, because the CRA needs this information to calculate your payments.

You only have to apply once in the year you became a resident of Canada. After that every year when you do your taxes, the CRA will use the information from your tax returns to calculate the amount you’re entitled to.

[Image of the GST/HST credit and the CAIP form.]

Tuition tax credit

Munishi: If you are a resident or deemed resident of Canada, you may be eligible to claim some tax credits on your tax return.

These tax credits reduce any income tax you may have to pay. However, if the total of these credits is more than your federal income tax, you will not get a refund for the difference.

One of them is a tuition tax credit.

To claim this credit on your tax return, use the information from Form T2202, Tuition and Enrolment Certificate. Your educational institution should provide you with this form by the end of February each year. You will be able to enter the information on your tax return by completing Schedule 11.

For more information, visit canada.ca/deductions-credits-expenses.

[Image of the tuition tax credit form.]

Frequently asked question 7

Munishi: Many students wonder: Can I claim the tuition credit if I am only in Canada to attend post-secondary school?

The answer is: An international student who has taxable income may claim the tuition, education and textbook amounts. They can carry forward unused tuition fees to claim in the future first year they have to pay income tax.

A non-resident student with no Canadian-source income cannot claim or carry forward tuition fees.

Use the Benefits Finder and the online calculator

Munishi: You can use the online Benefits Finder to find out what benefits you may be eligible for.

Answer a few questions and the benefits finder will generate a list for you.

To use the finder, visit canada.ca/benefits-finder.

You can also use the CRA calculator to see how much you could get in child and family benefits.

To use the calculator, visit canada.ca/child-family-benefits-calculator.

Remember to do your taxes on time every year to keep getting benefits and credits. CRA calculates amounts you are eligible for based on the information you shared in your tax return.

[An image of a calculator.]

Underground economy

Munishi: Moonlighting, working for cash, and working under the table are all terms used to describe the underground economy. These terms refer to the act of not reporting income for income tax and GST/HST purposes.

It can include income not reported or under-reported from:

• tips and gratuities
• employment
• money earned from renting out a room of your home and ride-sharing
• gift cards received for work done
• cash payments for goods or services, and
• bartering, which is the exchange of goods or services for other goods or services without using money

Generally, any income you earn is taxable and you have to report it on your tax return. This is true even when you don’t receive a T4 slip and when the activity is not your main source of income.

If you don’t report all your income and the CRA selects your return for an audit, you may have to pay the income tax you didn’t pay, plus interest and penalties.

Make sure you are on the payroll of an employer so that you can benefit from a workers compensation program if you are injured on the job, and from employment insurance if you lose your job and want to apply for employment insurance.

Always get a written contract or receipt when you buy goods or services.

If you don’t get a receipt to prove you purchased something, such as a new laptop, you’re not protected if something goes wrong, and you want a refund. Instead, it may cost you even more money to repair or buy a new laptop.

It’s important to know that evading taxes is illegal and can result in severe consequences, such as penalties, fines, and criminal convictions.

A few dollars of unreported income may not seem like a big deal, but collectively they amount to billions of dollars lost that are needed to fund public services in your community.

So be part of the solution! Know how to recognize and avoid the underground economy. For more information, visit canada.ca/taxes-underground-economy.

[Student reading from a tablet.]

There are a few ways to do your taxes!

Munishi: There are a few ways to do your taxes.

The fastest and easiest way is to do them online. If you are eligible, you can use certified software, or a web application found at canada.ca/netfile.

Some certified software is even free to use. The tax software guides you through the process. It calculates everything for you and helps make sure you don’t miss out on any benefits and credits.

If you have a modest income and a simple tax situation, a volunteer could do your taxes for you, for free. Visit canada.ca/get-tax-help for more information on free tax clinics.

You can also get help from a family member, a friend, or a tax preparer.

You can also do them on paper by downloading a tax package for your province or territory, filling out the forms and mailing them to the CRA. If you prefer, you can fill out the forms on your computer before printing them.

To get a tax package, visit canada.ca/taxes-general-package.

Free tax help

Munishi: As I mentioned, you may be able to get your taxes done by a volunteer for free!

The program is called the Community Volunteer Income Tax Program. In Quebec, it’s known as the Income Tax Assistance – Volunteer Program.

You’re eligible to have your taxes done through the program if you have a modest income and a simple tax situation.

Generally, a modest income is less than $35,000 for a single person and less than $45,000 for a couple.

Your tax situation is simple if, for example, you don’t have a small business or income from a rental property.

Tax clinics are held all year. However, most clinics are offered in March and April. Many secondary and post-secondary institutions across Canada already host their own clinics.

If your educational institution is interested in hosting its own clinic or if you are interested in learning about taxes and volunteering yourself to help others, reach out to us!

For more information or to find a clinic, go to canada.ca/get-tax-help.

[The logo for the community volunteer income tax program.]

My Account for individuals

Munishi: Once you do your taxes for the first time and you receive your notice of assessment, you can register for the CRA’s My Account.

My Account is a secure portal that lets you manage your tax and benefit affairs online quickly, conveniently and securely.

Along with doing your taxes every year, you must keep your personal information up to date to keep getting benefits and credits.

This includes your address, your marital status, the number of children in your care and your direct deposit information. You can instantly update all this information on your own through My Account!

You can also:

• Track your refund, view or change your return.
• View your mail online, such as your notice of assessment.
• Check your benefit and credit payments and statements.
• View any uncashed cheques, and more.

For more information or to register for My Account, go to the canada.ca/my-cra-account.

[Screenshot of the My Account overview page.]

Frequently asked question 8

Munishi: Those trying to get on MyAccount for the first time often ask themselves this question.

I tried to register for CRA’s My Account but I always receive an error message. What should I do?

The answer is:

You can only register for the CRA’s My Account once you have filed your taxes for the first time and receive your notice of assessment.

Did you know that you can give permission to someone you trust to deal with the CRA on your behalf?

Need help?

Munishi: You can authorize a representative to have access to your personal tax account through My Account. Or, if you would like to authorize a representative to communicate on your behalf with the CRA by phone, fax, mail, or in person, you can complete a paper Form AUT-01, Authorize a Representative for Offline Access, and send it to the CRA.

Taxpayer information is confidential. The CRA needs your permission to share your tax information with another person, such as a family member, a friend or an accountant.

You don’t need to authorize someone as a representative if that person is only doing your taxes.

Want to learn more about taxes?

Munishi: Want to learn more about taxes in Canada?

Try out our new online interactive tool called Learn about your taxes.

This is a free online course that teaches you the basics of taxes.

This online self-directed tool takes you through starting your first job, doing a basic tax return, the purpose of taxes and more.

It has resources, such as videos, common tax terms, and links to websites where you can learn about doing your taxes and Canada’s tax system.

You can access this course by visiting canada.ca/learn-about-taxes.

[Screen capture of the main webpage of Learn about your taxes.]

Learn about your taxes

Munishi: The learning tool has modules and lessons.

The first module, Starting to work, has four lessons. They cover why you need a social insurance number, when to fill out a Form TD1, and what’s on your pay stub and T4 slip.

Throughout the lessons, you will find definitions, examples and quizzes to test your knowledge.

Content and topics are updated regularly.

Be sure to check it out!

Be scam smart!

Munishi: You should always be cautious if you receive communication that claims to be from the CRA.

It is possible to receive a direct communication from the CRA. We may, for example, need to provide you with information about your account or ask you to clarify something you’ve shared with us.

We will not ask you for your bank account number, credit card number, or passport number, or use threats or intimidation tactics.

Scammers often attempt to imitate the CRA to try to steal your personal information. They may target you by telephone, text, instant messaging, email or mail.

Here’s how you can be scam smart:

• Never be afraid to question why the CRA needs your personal information.
• When in doubt, check My Account to see if you have mail or any amount owing.
• You can also call the CRA to check on communications.
• If you’re still in doubt – delete, delete, delete!

[Text on top of an individual's head reads, "Listen to your voice of reason before you act."]

Thank you!

And that’s it for me! This is the end of our webinar. Thank you for joining us today! We hope it was helpful!

For more information on any related topics, start your search at canada.ca/taxes.

To view previous and register for upcoming webinars, visit our Upcoming Events page at canada.ca/cra-outreach-events. We encourage you to share it with your friends!

Thank you for listening and enjoy your day!