If you are a student, you may be wondering, do I have to pay income tax in Canada?
Every year, the Youth Fair Gains program invites a guest from the Canada Revenue Agency (CRA) to speak to the class at the start of tax season. Read our tax tips below for answers to our students’ frequently asked questions.
Do I have to file taxes if I’m under 18, or if I live with my parents?
It is important to file your taxes, even if you are not yet 18 years old, but you are working. You may have noticed that the net pay on your paycheque is less than the pay agreed to when you were hired. This is because employers withhold a bit of your pay for government benefits like Employment Insurance (EI). You will get a refund for the premiums you paid, if you file your taxes and your income is exempt.
Even if you are not working, filing your taxes at 18 years old just means you are putting your hand up: now the government will consider you for certain benefit payments like the Goods and Services Tax (GST) credit, and they’ll also know much to pay you. Student loan applications sometimes ask what you declared as income on certain lines of your tax return, so it’s good to have those numbers ready.
This is my first-time filing taxes. What do I need to know?
You will need a Social Insurance Number (SIN) which you will also need for your first job. If you do not have a Social Insurance Number, you can get one from the Service Canada website. This can take a few weeks, so plan ahead.
It’s also a good idea to set up My Account, a secure portal that lets you view your personal income tax and benefit information and manage your taxes online.
I’m expecting a refund. Do I need to file before the tax filing deadline?
You can start filing taxes on February 22 and the deadline to file your taxes is April 30, 2021. There’s no real difference between filing in February and filing in April.
If you owe on your return, you don’t have to wait till April to pay, you just have to pay by April 30. You will pay interest if you file after April. There is no penalty for late filing if you don’t owe, but it will affect you when your return will be processed and approved for certain benefits. For more key dates, read our blog, Tax Filing Dates Everyone Should Know.
Should I claim a scholarship as income?
If you received a scholarship, you will receive a T4 slip. However, scholarships or bursaries eligible for the scholarship exemption do not have to be included as income. Because there are multiple factors that can affect this exemption, we recommend you read this student tax guide from the CRA for more details.
What should I know if I received Canada Emergency Student Benefit (CESB) or Canada Emergency Response Benefit (CERB)?
If you applied for these benefits through Service Canada, you will get a T4E tax slip. If you got it through the CRA, you will get a T4A slip.
Our most important tip: beware of tax scams!
If you’re expecting a refund, know that the CRA will only pay you via direct deposit or mail you a cheque. They will never
e-transfer you money, text or email you a link to click on for payment. Do not respond to requests asking to confirm your personal information.
Getting a tax refund? Join the Momentum Savings Challenge, get $5 right away!
A tax refund is also a great time to start putting money aside, even just $40. If you join the Momentum Savings Challenge on the QUBER app, each time you save $40 you’ll earn cash rewards. Stop at any time, or keep going to earn more (up to a maximum of 10 months). You’ll also automatically qualify for QUBER’s Save to Win grand prize. Learn more here.