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Student Tax Filing

Do international students in Canada need to file taxes?

Yes. Because international students often live in Canada for more than 183 days and have social ties that are mostly in Canada, they may be treated as tax residents. Whether you are allowed to work and whether you must file taxes are two different concepts. Canada requires every tax resident to file a tax return. International students who meet low-income conditions can receive the GST/HST credit four times each year: July and October after filing, and January and April of the following year. This credit is not related to your spending amount. The GST/HST credit is one of the benefits for international students. In addition to the low-income credit, another important benefit of filing is accumulating tuition credits. Each year when filing, students download a form called T2202A from their school's online student account, which includes the year's tuition records. When you file, the CRA will also provide additional textbook amounts as credits. For every CAD $100, you can generally get about 22% back. For example, if CAD $100 of tax was withheld from your pay and you also paid CAD $100 in tuition, filing with the CAD $100 tuition can refund about CAD $22. In other words, if in 2017 you paid CAD $10,000 in tuition and CAD $2,200 was withheld in tax, you can get roughly CAD $2,200 back, meaning you effectively do not need to pay tax.

There is another issue that is now considered very important: if, during your studies, you purchased a home as your principal residence and sold it before obtaining permanent resident (PR) status, and you cannot provide tax filing records, the CRA requires the lawyer or notary to withhold 25% of the sale price at closing. For example: a CAD $1,000,000 home would have CAD $250,000 withheld, because the lawyer and notary cannot confirm whether the student selling the home is a tax resident, living in Canada, and paying taxes.

They have strict legal requirements to withhold 25% of the sale price for non-tax residents; otherwise, the lawyer and notary may be held responsible. Therefore, filing taxes as an international student becomes especially important.

Summary:

  1. International students in undergraduate or college programs who are over 18 years old must file taxes.
  2. Tuition records can be accumulated and carried forward for future tax refunds once you start working. This can be a very large refund: CAD $10,000 of tuition can refund about CAD $2,200 of income tax.
  3. Filing taxes is an important condition to be treated as a tax resident and claim the principal residence tax exemption when selling your home.

Required documents for student tax filing: via WeChat or in-person meeting.