Your First Tax Return in Canada

Why You Should File a Tax Return Even If You Earned Little or Nothing

Many newcomers assume that if they arrived in Canada partway through the year, or if they did not earn much income, they do not need to file a tax return. This is one of the most costly misconceptions for newcomers.

Filing a tax return is how you access important government benefits, including:

• GST/HST credit: Quarterly cash payments to offset sales taxes (up to $519 per year for a single person in 2025)
• Canada Child Benefit (CCB): Monthly tax-free payments for families with children under 18 (up to $7,787 per child under 6 in 2025)
• Provincial credits and benefits: Many provinces offer additional credits like the Ontario Trillium Benefit, BC Climate Action Tax Credit, or Quebec Solidarity Tax Credit
• Canada Workers Benefit: A refundable tax credit for low-income workers

If you do not file, you do not receive any of these benefits. The CRA does not automatically know your income level — you must report it by filing a return.

How the Canadian Tax System Works

The Tax Year

Canada's tax year runs from January 1 to December 31. If you arrived partway through the year, you report income earned from the date you became a Canadian resident to December 31.

Filing Deadline

For most people, the deadline to file your personal tax return is April 30 of the following year. If you or your spouse/common-law partner are self-employed, the filing deadline is June 15, but any taxes owing must still be paid by April 30.

Who Must File

You should file a tax return if any of the following apply:

• You owe taxes for the year
• You want to receive GST/HST credit payments
• You want to receive the Canada Child Benefit
• You want to receive any provincial benefits
• You want to build RRSP contribution room for future years
• You received income from employment, self-employment, rental properties, or investments
• The CRA sends you a request to file

As a newcomer, even if none of these seem to apply, file anyway. Filing a return with zero or low income is what triggers many benefit payments.

Federal and Provincial Tax

Canada has a two-tier income tax system. You pay both:

1. Federal income tax: The same across all provinces and territories. The 2025 federal brackets are:

   • 15% on the first $57,375 of taxable income
   • 20.5% on the next $57,375
   • 26% on the next $62,938
   • 29% on the next $75,049
   • 33% on income over $252,737

2. Provincial or territorial income tax: Each province sets its own tax rates and brackets. For example, Ontario's lowest rate is 5.05%, Alberta's is 10%, and Quebec's is 14%.

Your employer withholds both federal and provincial tax from each paycheque throughout the year. When you file your tax return, you either get a refund (if too much was withheld) or owe additional tax (if not enough was withheld).

Documents You Need

Start collecting these documents in January for the previous tax year:

Income Slips

• T4 (Statement of Remuneration Paid): Issued by every employer you worked for. Shows your total earnings and all deductions (CPP, EI, income tax withheld). Your employer must issue this by the end of February.
• T4A (Statement of Pension, Retirement, Annuity, and Other Income): For scholarships, freelance income, pension payments, or other sources of income.
• T4E (Statement of Employment Insurance and Other Benefits): If you received EI benefits during the year.
• T5 (Statement of Investment Income): For interest or dividend income earned in non-registered accounts.
• T3 (Statement of Trust Income Allocations and Designations): For income from mutual funds held outside registered accounts.
• T2202 (Tuition and Enrolment Certificate): If you were a student at a Canadian post-secondary institution.

Receipts and Records

• RRSP contribution receipts
• Child care receipts (for child care expense deduction)
• Medical expense receipts (for amounts exceeding a threshold)
• Charitable donation receipts
• Professional or union dues receipts
• Moving expense receipts (if you moved at least 40 km closer to a new job or school in Canada)
• Public transit passes (some provinces offer credits)
• Rental receipts (for provincial credits in Manitoba, Ontario, and other provinces)

Personal Information

• Your Social Insurance Number (SIN)
• Your date of birth
• Your current address
• Your marital status and spouse's information (if applicable)
• Your bank account details for direct deposit of your refund
• Your date of entry into Canada (for your first tax return)

How to File Your Tax Return

Option 1: Free Tax Clinics (CVITP)

The Community Volunteer Income Tax Program (CVITP) offers free tax preparation at clinics across Canada for people with modest income and simple tax situations. This is an excellent option for newcomers.

To find a clinic near you, visit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/community-volunteer-income-tax-program.html

Many immigrant-serving organizations also host tax clinics specifically for newcomers. Contact your local settlement agency to ask about available services.

Option 2: CRA My Account and NETFILE

NETFILE is the CRA's electronic filing service that allows you to submit your tax return online. You need CRA-certified tax software to use NETFILE. Several free options exist:

• Wealthsimple Tax (https://www.wealthsimple.com/en-ca/tax): Free for all Canadians, entirely online, with an intuitive interface. This is one of the most popular options for simple returns.
• TurboTax Free (https://turbotax.intuit.ca/): Free for simple returns. The paid versions offer more features.
• H&R Block Online (https://www.hrblock.ca/): Free basic version available.
• StudioTax (https://www.studiotax.com/): Free desktop software for Windows and Mac.

To file using NETFILE:

1. Create a CRA My Account at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services.html (you may need to wait for an access code to arrive by mail, which takes 5 to 10 business days)
2. Use one of the certified software programs listed above
3. Enter your information and income slips
4. The software calculates your taxes, deductions, and credits
5. Submit electronically through NETFILE
6. Receive your Notice of Assessment from the CRA within two weeks (electronically) or eight weeks (by mail)

Option 3: Paper Filing

You can also download the tax package from the CRA website and file by mail. This is the slowest option and takes 8 to 16 weeks to process. It is not recommended unless you cannot file electronically.

Option 4: Hire a Professional

If your tax situation is complex (for example, you have foreign income, foreign property, or self-employment income), hiring a tax professional or accountant may be worthwhile. Fees typically range from $50 to $200 for a simple return and more for complex situations.

Important Deductions and Credits for Newcomers

Basic Personal Amount

Every Canadian resident gets a basic personal amount — a non-refundable tax credit that reduces your federal tax. For 2025, this amount is $16,129. This means the first $16,129 of your income is effectively tax-free at the federal level.

As a newcomer who arrived partway through the year, this amount is prorated based on the number of days you were a Canadian resident.

GST/HST Credit

This is a tax-free quarterly payment to help offset the sales tax you pay on everyday purchases. You do not apply for it separately — the CRA automatically determines your eligibility when you file your tax return. However, newcomers must also complete Form RC151 to receive payments in their first year (see our detailed guide on the GST/HST credit).

Canada Child Benefit (CCB)

If you have children under 18, filing your tax return triggers eligibility for the CCB. The benefit amount is based on your family's net income and the number and ages of your children. To apply, complete Form RC66 (Canada Child Benefits Application) and submit it to the CRA.

Apply online at: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-apply.html

Moving Expenses Deduction

If you moved at least 40 kilometres closer to start a new job, run a business, or attend post-secondary school in Canada, you can deduct moving expenses. Eligible expenses include:

• Transportation and storage costs
• Travel expenses (meals, vehicle, accommodation)
• Temporary living expenses (up to 15 days) near your new home
• Costs of selling your old home and buying your new one (real estate commissions, legal fees)

Note: This deduction applies to moves within Canada. Moving expenses from your home country to Canada generally do not qualify, but moving from your initial landing point to a different city for work or school may qualify.

Medical Expenses

You can claim eligible medical expenses that exceed 3% of your net income (or $2,759 for 2025, whichever is less). This includes:

• Prescription medications
• Dental work
• Eyeglasses and contact lenses
• Medical travel expenses
• Health insurance premiums (including premiums paid for private insurance or provincial health plans)

Keep all receipts. Medical expenses can include costs paid in Canada and abroad.

Tuition Tax Credit

If you attended a Canadian post-secondary institution, the tuition you paid generates a non-refundable tax credit. Your school issues a T2202 form showing eligible tuition amounts. Unused tuition credits can be carried forward to future years.

Canada Workers Benefit (CWB)

This refundable tax credit is for individuals and families with low working income. For 2025, single individuals earning between approximately $3,000 and $23,000 may receive up to $1,518. The CRA calculates this automatically when you file.

Rental Income Expenses

If you rent out a room in your home or own a rental property, you can deduct expenses related to the rental income (mortgage interest, property taxes, insurance, repairs, utilities). Report this on Form T776.

Provincial Differences

Ontario

Ontario residents may be eligible for:

• Ontario Trillium Benefit (combines the Ontario Sales Tax Credit, Ontario Energy and Property Tax Credit, and Northern Ontario Energy Credit)
• Ontario Child Benefit
• Apply by filing your federal return and completing the ON479 form

Quebec

Quebec has its own provincial income tax return filed separately with Revenu Quebec (https://www.revenuquebec.ca/). You must file both a federal return with the CRA and a provincial return with Revenu Quebec. Quebec residents also receive the Solidarity Tax Credit instead of the Ontario-style credits.

British Columbia

BC residents may qualify for the BC Climate Action Tax Credit, paid quarterly. Filing your federal return triggers eligibility.

Alberta

Alberta has a flat provincial tax rate of 10% on the first $148,269 of taxable income (2025). Alberta residents may qualify for the Alberta Child and Family Benefit.

Other Provinces

Each province has its own credits and benefits triggered by filing your tax return. Check your province's website for specific programs.

Common Mistakes to Avoid

Not filing because you think you do not owe taxes

File anyway to unlock government benefits and build RRSP room.

Missing the deadline

Late filing results in penalties (5% of the amount owed plus 1% per month, up to 12 months) and delays in receiving benefits. File by April 30.

Forgetting to report worldwide income

Canada taxes residents on their worldwide income. If you earned income in another country during the period you were a Canadian tax resident, you must report it. You may be able to claim a foreign tax credit if you already paid tax on that income abroad.

Not keeping receipts

The CRA may ask for supporting documentation years later. Keep all tax-related receipts and documents for at least six years.

Using the wrong residency date

Your residency date for tax purposes is the date you established significant residential ties to Canada (usually your landing date). Make sure you enter this correctly on your first return.

Not reporting foreign property

If you owned foreign property with a total cost exceeding $100,000 CAD at any time during the year, you must file Form T1135 (Foreign Income Verification Statement). This includes foreign bank accounts, real estate, and investments. The penalties for not filing are steep.

Step-by-Step: Filing Your First Return

1. Get your SIN from Service Canada if you have not already.
2. Collect all income slips (T4, T5, T4A, etc.) and receipts.
3. Register for CRA My Account at https://www.canada.ca/en/revenue-agency/services/e-services/cra-login-services.html
4. Choose a free tax software (Wealthsimple Tax is recommended for beginners).
5. Enter your personal information, including your date of entry into Canada.
6. Enter your income from all slips.
7. Claim deductions and credits (medical expenses, tuition, moving expenses, etc.).
8. Review your return carefully before submitting.
9. Submit via NETFILE and note your confirmation number.
10. Set up direct deposit through CRA My Account for fastest refund delivery.
11. File Form RC151 if this is your first year in Canada and you want GST/HST credit payments to start before your first tax return is assessed.

What to Do Next

1. Register for CRA My Account as soon as possible so you are ready when tax season arrives.
2. Start a folder (physical or digital) for all tax-related documents as they arrive.
3. File your return by April 30, even if your income was zero.
4. Apply for the CCB using Form RC66 if you have children.
5. Check your Notice of Assessment when it arrives to confirm everything was processed correctly and note your RRSP contribution room for next year.

Filing your first Canadian tax return might feel daunting, but with free software and abundant free resources, it is very manageable. The financial rewards — in the form of government benefits — make it well worth the effort.