(NC)—Every year, thousands of immigrants make Canada their new home. However living in a different country can be a major adjustment, especially if you are unfamiliar with having to file income tax forms.
“Even if you are new to Canada, the Canada Revenue Agency (CRA) expects you to comply with your tax obligations,” says Cleo Hamel, senior tax analyst with H&R Block.“It is important to find out your residency status under the CRA rules and what this means to your tax return.”
People entering Canada can be classified as non-residents, deemed residents or part-year residents, depending on how long they stay and if they establish residential ties.
People who immigrate to Canada on a permanent basis are usually considered part-year residents for tax purposes. Part-year residents are taxed on their world income from the date of entry, so all income earned in a tax year must be reported.
“Every new Canadian needs to apply for a social insurance number (SIN) as soon as possible,” explains Hamel. “You will need a SIN to file a tax return and qualify for tax credits.”
Part-year residents may be entitled to the GST credit after their arrival. Parents should also complete a Child Tax Benefit Form RC66 from the CRA as soon as they arrive.
“Your tax obligations on investments and properties will be calculated based on the fair market value (FMV) on the date you entered Canada,” says Hamel. “The FMV will determine any capital gains or losses after you arrive, meaning you don't pay more tax than you need to.”
If you are new to Canada, it is important to make sure you claim the credits to which you are entitled while ensuring you comply with the existing tax laws and treaties.www.newscanada.com