Why Do I Have to File an Income Tax Return?

You must file your tax return if:

• You owe tax for the year in question.
• You have a taxable capital gain to report or you disposed of a property during the year.
• You received advance payments of the tax credit for childcare expenses, home-support services or the work premium.
• You are a non-resident and you disposed of a taxable Canadian property (a property located in Canada, for example) regardless of whether there was a gain.
• You have a balance due under the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP).

Exceptions and allocations

Even if your income is low and you don’t have to pay any tax, declaring your income is in your interest. For example, you could get a refund of tax deducted at source and be eligible for certain benefits based on your reported income. This includes:

• The Canada Workers Benefit.
• Child and family allowance benefits.
• The GST credit and the Solidarity credit.
• The Guaranteed Income Supplement.
• Splitting your pension income with your spouse.
• Receiving a refund of QPP/CPP, QPIP and EI overcontributions.

What are the consequences of not filing an income tax return?

If an individual fails to file an income tax return before the deadline, the authorities will impose penalties.

• A late filing penalty equivalent to 5% of the unpaid tax balance.
• An additional 1% penalty for every full month your return is late (maximum of 12 months).

Please note that these penalties and interest accumulate over time and can lead to financial issues. Naturally, if an individual is entitled to a refund instead, there is no late-filing penalty.

Please note that your employer provides a summary of your income earned between January 1 and December 31 of the previous year no later than the last day of February. You will receive a record of employment from each employer where you earned income.

• T4 (federal)
• Relevé 1 (provincial)

For most individuals, the deadline for filing tax returns for 2023 is April 30, 2024. If you or your spouse have self-employment income, the deadline is June 15, 2024. However, you must pay any tax balance for the 2023 taxation year no later than April 30, 2024. If you fail to do so, interest will be calculated on the unpaid balance.

And if you decide to leave Canada, don’t forget that you must file an income tax return for income earned during the year of your departure.

You can file your tax return as soon as you have all your receipts and tax documents. If you’re not sure what documents you need to file your income tax return, this checklist will help you save time.