Canadians students face new considerations and responsibilities as they pursue their education. Dealing with income tax and filing an income tax return are additional challenges in their path to becoming adult citizens. This year thousands of Canadian students will file an income tax return for the first time.
So when does a student have to file an income tax return?
Cameron Johnston
CPA, CA, LPA, Partner
Millards Chartered Professional Accountants
According to Cameron Johnston, CPA, CA, LPA and Partner at Millards Chartered Professional Accountants, it depends on your situation.
“There are a number of circumstances that dictate when you need to file.You are required to file an income tax return when you have to pay tax for the year or Canada Revenue Agency (CRA) sent you a request to file. You’re also obligated to file if you have to repay any of your employment insurance benefits or if you are paying employment insurance premiums on self-employment and other eligible earnings.”
CRA also requires students to file a return when that student has not repaid all amounts withdrawn from a registered retirement savings plan under the lifelong learning plan, or if the student received any advance payments of the working income tax benefit and wants to apply for an advance payment for the following year.
There are many situations when a student is required to file an income tax return, but are there any benefits for students to file an income tax where they’re not required to do so?
“Yes, in some cases there is. You need to file a return if you want to claim a refund, apply for the GST/HST credit or any related provincial credit or if you, your spouse or common-law partner want to receive Canada child tax benefit payments.”
Johnston says that students may have other reasons to file a return.
“You may also want to carry forward or transfer the unused part of your tuition amounts, report income for which you could contribute to an RRSP, or claim the working income tax benefit.”
Once a student has reviewed the criteria and determined that they are obligated to file an income tax return, there are some prerequisites for moving forward.
“In cases where you don’t already have a social insurance number, also called the SIN, the first step is to get one. The SIN is a nine digit identification number that is issued to Canadian citizens and permanent residents.”
Under some circumstances a temporary SIN may be issued. Both the SIN and the temporary SIN are issued by Service Canada.
“You can get more information on getting a SIN at the Service Canada website or you can call them toll-free at 1-800-206-7218.”
In addition to the information on the Service Canada website, The Canadian Revenue Agency has created a series of videos designed to help students and their families, understand when and if a student is required to file income tax. The video series explores student income tax in short segments on topics such as claiming moving expenses and child care deductions, claiming tuition fees, education and textbook amounts.
An accountant with Millards since 1990, Cameron Johnson provides audit and accounting services for clients in the public and nonprofit sectors, as well as small owner/manager businesses. He is a former member of the Practice Inspection Committee of the Institute of Chartered Accountants of Ontario and is the Treasurer for the BCI Alumni Foundation. He also serves as Treasurer for the James Hillier Foundation, an organization that provides scholarships for Brant County students pursuing post-secondary education in the field of science.
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