• by admin
• March 1, 2024

You need to file an annual income tax return in Canada if you are a resident of Canada during the tax year. If you are a non-resident of Canada, you only file an income tax return in Canada if you have income from Canada to report.

When you file your income tax return in Canada, you pay federal and provincial income tax on your taxable income. Your income tax payable will be further reduced when you claim the federal and provincial tax credits. There are certain refundable tax credits, and if you are entitled, you will get the cheques from CRA if you have no income tax payable.

Each province in Canada has its provincial income tax rates for individual income tax. Similarly, each province in Canada has its provincial tax credit and benefits.

 

Which province do I need to file my income tax return?

Your provincial residency for income tax purposes is decided based on your residency status as of December 31^st. If you were a resident of Ontario as of December 31^st, You will file your annual Federal income tax return along with your Ontario Provincial income tax return. You will be entitled to claim all the federal tax benefits and all the tax benefits offered by the province of Ontario.

 

What is a provincial income tax return?

When you file your annual income tax return, you file both an annual federal income tax return and a provincial income tax return. You pay taxes on your annual taxable income, including federal income tax and Ontario income tax. In all provinces of Canada except Quebec, you file your federal and provincial income tax return together with the Canada Revenue Agency. If you were a resident of Quebec, you need to file a separate Quebec income tax return in French. Quebec does not accept your annual income tax return in English language.

 

Should I file an annual income tax return in Quebec if I move from Quebec?

No. You file your annual income tax return based on your residency as of December 31^st. If you were not a resident of Quebec as of December 31^st, you do not need to file an income tax return in Quebec.

 

Are you a non-resident of Quebec?

Revenue Quebec considers the following factors in deciding whether you resident or non-resident of Quebec.

• Do you have any residential ties with Quebec (House, family, Phone and Data plan, Driving License, Membership, Etc.
• Do you visit Quebec regularly and how many days you stay?
• Are you temporarily residing outside Quebec?
• Will you return to Quebec?

Either one factor or a combination of factors may be evaluated.

 

You may still need to file an annual income tax return in Quebec.

As mentioned earlier, your provincial income tax obligation is based on your tax residency of the province as of December 31^st. However, you may have tax obligation in Quebec even if you were resident of Quebec for only part of the year.

You have to file a separate income tax return in Quebec and pay Quebec income tax if the following situations apply to you:

• You were eligible for the Quebec prescription drug insurance plan for part of the, and you are required to pay the Quebec prescription drug insurance premium.
• You have received the following tax credits as advance payment
  • Childcare expense tax credit
  • Social assistance
  • Work premium tax credit or supplement
  • Home-support services tax credits for seniors
  • Treatment of infertility tax credits
  • Caregivers tax credits
• You have business income from Quebec from an establishment
• You have paid special tax related to the non-purchase of replacement shares in a labor-sponsored fund

 

Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information.

 

Blogs Canada  |  Blogs USA