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The simple answer to that question is that you must declare all the income that you earned during the preceding year. You may well be wondering whether you have to declare income earned outside of Quebec. The answer is yes! If you’re considered a Canadian resident for tax purposes, you’re required to file a return and declare all income earned during the preceding year. It’s the law!
Here’s what you need to know about filing an individual’s income tax return. There are two types of income: taxable income and non-taxable income.
Taxable income is income on which you must pay taxes. This includes:
Non-taxable income is income that is tax-exempt. This includes:
In order to calculate your tax bracket, you must first determine your net income, which is the difference between your total income and your deductions. Deductions are amounts that you can subtract from your total income to reduce your taxes. They include moving expenses, RRSP contributions and employment expenses, for example.
Then you can calculate your tax on net income by applying the tax rate for your income bracket. Each level of government has a progressive taxation system, which means that higher incomes are subject to higher income tax rates.
There were five income brackets and four tax rates in Quebec for 2023. Click here to find out more about provincial income tax rates. For federal income tax rates, click here.
Lastly, you must add or subtract the tax credits to which you are entitled to determine your tax liability or refund. Tax credits are amounts that directly reduce your tax payable or are reimbursed if you don’t have any tax to pay.
There are several types of tax credits in Quebec which include the tax credit for childcare expenses, the solidarity tax credit, and the tax credit for home-support services for seniors. Complete lists of provincial and federal tax credits are available on the Revenu Québec and Canada Revenue Agency websites.
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