(A guide especially useful for International Students)

Canada has been a popular higher education destination for many international students, be it for its high-quality education or the number of programs that benefit students during and after the graduation.

Often times, students don’t file their tax return for several years, if at all. We often see students only once they graduate and enter the workforce. You may wonder why? Students often tell us either they didn’t know they were required to file even though they had no income, or simply they were working extra hard to do well in their studies to prepare for a brighter future. But what if you are leaving money you are rightfully entitled to on the table? This blog is meant to point out the benefits of filing your tax return every year, even though your income may be very low or none at all.

Tax Refund

In Canada everyone who is considered resident, be it temporary (that being the case of the international student) or permanent resident and citizen, is required to file the tax return as a way to report their source of income and pay their dues for the services that are otherwise available to all of the residents. After all, without paying our tax dues we wouldn’t have healthcare, and some of other basic necessities such as public transport and infrastructure, and the government offices that work towards everyone’s wellbeing of the people living on Canadian soil.

With a certain income threshold, you may be eligible to receive a decent refund amount, that can help you pay for some of your school expenses or serve you as your pocket money that always come handy when there is only so much time you can dedicate to work when studying and preparing for your future career.

As a full time, or even part time student the amount paid in tuition fees and books amount will enable you to offset some of the amount of your tax liability. This would essentially lower your tax amount due. Most of the students don’t have income high enough to benefit from this credit, instead their tuition fee credits accumulate and are applied against their taxable income later on when they start working in their new careers. This often results in significant tax savings.

GST/HST tax credit

GST/HST is a goods tax we pay on most of the goods we purchase. The amount varies based on the province. Canada offers a refund on the tax you normally pay on such goods, essentially making such purchases “tax free”. This credit is calculated in accordance with the level of your income. In general, student’s income is on the lower end due to limited hours they can spare to work, so hence a high chance of qualifying for a GST/HST tax credit.

One of the conditions to qualify you to receive GST, HST are establishing Canadian residency. To be deemed Canadian tax resident, you must have lived in Canada for minimum of183 days in a given calendar year, and you must be at least 19 years old to be eligible for the GST/HST tax credit.

You will be required to have a valid Social Insurance Number and file your tax return in order to qualify receiving the GST/HST tax credit. How much you may be eligible for, depends on your income, but from experience, students receive at least $200 per year, paid in 4 equal installments or you can opt to receive the payment in a lumpsum in June of the following year when the last payment would have been paid. This is an option for those who worry they might squander the smaller amounts and would prefer to receive larger amounts to help them pay for the tuition or other larger purchases.

Trillium tax benefit

Ontario trillium tax benefit (OTB) is a form of tax benefit payment intended to assist low income individuals to help with the cost of energy in Ontario. The Ontario trillium benefit is divided into 12 monthly instalments and is intended for the owners and tenants who are between the age of 18- 64 years old and meet the qualifying criteria. This amount can be up to a $1,023. Those 65 years old and above can receive up to $1,165. For the residents in Northern Ontario, the NOTB can be as much as $227 per month (2017 rates). Please bare in mind, that there are slight limitations and student residence may not qualify for the OTB. Discuss with your tax Pro or accountant if you are not sure your student residence qualifies.

Other Benefits

Under certain circumstances you may be eligible to receive Working Income Tax Benefit, which is intended to help low income individuals to pay for their everyday necessities.

Most of the full-time students who are working part time, or international students may not qualify for WITB, but it is definitely a bonus to not to leave any money that you are legally eligible to on the table. As long as you don’t owe the government any money, the government doesn’t enforce the tax filing, at least not for now, but you will not be eligible to receive any of the above-mentioned credits and refunds without having had filed your tax return. Every little helps to pay for everyday necessities, books or with tuition fees, or you may consider taking advantage of compounding interest and starting your long-term retirement savings early.

What documents you require to file your tax return?

Social Insurance number, also knowns as SIN number. Post-secondary international students interested in working outside of their college or university will be required to apply for their
SIN # with applicable documents at Service Canada.

T2202A or T2202
This is a form that every education institution provides to its students to report on their tax return to qualify for the tuition tax credits. Usually it is accessible for download from the student’s student account on the university website, or can be obtain it also from the student’s office.

T4, T4A, T5 or other prove of income
T4 – every employer is responsible filing the T4 and would provide their employees a copy

T4A – Provides information about scholarship income

T5 – Bank Interest, and investment/trading income – This will be mailed to every individual where the income earned from their investment is higher than $50

Rental receipts or property tax receipts

If using public transport, metro passes or presto card printout

Mailing address or direct deposit information to process the student’s refund into their bank account.

For any more complex tax situations, feel free to contact us.

Personal tax situations vary from person to person and it would be wise to consult a tax or accounting professional, to ensure you haven’t missed out on any credits. Feel free to contact KeWang Professional Corporation with your accounting and tax planning needs at discounted student rates. You can visit us on www.cwcga.com or we also can be contacted via WeChat under the account name wangkecpa.  Don’t leave your refund on the table! Claim what’s rightfully yours by filing your return on time. You can do this between now up until April 30th.

We are able to assist you in person as well as over long distance, so don’t worry about geographical difference. To book an appointment call Ke Wang at 416-551-5550.