Who is Required To File An Income Tax Return in Canada

Everyone in Canada is required to file an income tax return as long as they receive an income.

If you are required to file an income tax return, you will need to understand the meaning of income tax, its benefits, and other factors. The perks of living in Canada are numerous and include the available resources and shared services you will get to enjoy.

However, this is only possible because the country is keen on the taxation system, which is a great way of redistributing wealth. Who is required to file your income taxes in 2022? You will get to keep reading as we unfold everything about income tax returns in Canada for you.


What is an income tax return?

Precisely, an income tax return is money you will need to pay to the government of Canada on the income you earned. You can pay your income tax to the Canada Revenue Agency (CRA). An individual tax year is always from January 1 to December 31.

The income tax that people owe is different for everyone. However, the major factors deciding the income tax may include your income, employment status, and available deductions.


Who is required to file an Income Tax Return in Canada - Rotimioceans.com


What is the least income to file taxes in Canada?

In simple terms, anyone who earns income in a tax year is required to file an income tax return. To be precise, no amount is too small for income. That means how much you earn will determine the tax payable by you.

So, even if you did not earn anything in a year, which is rare, you must complete a tax return annually.

In the same way, the higher your income, the higher the amount you pay as income tax. In Canada, the federal tax brackets are outlined below:


Here are the income tax rates:

– 15% on the initial $50,197 of taxable income

– 5% on the next $50,195 of taxable income

– 26% on the next $55,233 of taxable income

– 29% on the next $66,083 of taxable income

  • – 33% of taxable income over $221,708


Although this is the case within the country, the provinces and territories have their tax bracket for their residents.


Who is required to file an income tax return?

The answer to this question is everyone is required to file an income tax. However, for the sake of clarity, we will outline the class of people eligible to file an income tax return in Canada. Here they are:

  • The income earners. Whether the income is in the form of employment investment or any other form of income, you are to file an income tax.
  • Canadian residents, international students, or those who traveled out of Canada
  • Self-employed individuals and those who owe Canada Pension Plan (CPP) and Employment Insurance (EI) premium
  • Anyone who sold or otherwise disposed of the property, like real estate or corporate shares
  • Those who split income with their spouse or common-law partners
  • Remember the following text: Those who use the Home Buyer’s Plan (HBP) and Lifelong Learning Plan (LLP) and have outstanding repayments.
  • Individuals who made withdrawals from their Registered Retirement Savings Plan (RRSP) not covered by the HBP or LLP
  • Individuals that sold or disposed of capital property, including a home, vehicle, or other assets. Even if the person did not incur capital, they must file an income tax return.
  • Those who must repay Old Age Security or Employment Insurance Benefits
  • Individuals who received a financial support benefit from the government of Canada, which includes social security, Canada Workers Benefit (CWB), or alike
  • Anyone who receives a request from the CRA to file or demand a file.


Additional Requirements

If you are an employee, your employer must deduct tax installments from every one of your paycheques and remit them to the CRA.

On the other hand, if your employer did not deduct enough tax for the year, you will have to carry it over to the coming year and pay more when you file your tax return. Again, if your employer deducts more than necessary, you will always get money back after you file your tax return for the year.

Similarly, if you earn an income from any other source aside from your employer, you must pay the tax on it when you file your tax return. If you also made certain types of investments, you are under an obligation to pay tax on the income you earn during the year.

Finally, by filing a tax return, you can qualify for an income tax refund and claim credits or deductions such as the Harmonized Sales Tax, Child Tax Benefit payments, Goods and Services Tax, and more.


Do dead people file an income tax return?

If you pass away, your family member or close friend will complete your final tax return while they process a will or estate.


Is there any age limit for individuals to stop filing taxes?

To be precise, there is no age limit to paying taxes in Canada. Filing your income tax return has no business with your age.

Even senior citizens receive a pension, government support, or other retirement benefits, and so, are required by law to file their taxes. Even if you are exempted from filing your income, it is best practice for you to file it.


What are the perks of filing an income tax return?

There are reasons for you to file an income tax return, and one of them is that it will be on your record that you do not owe taxes.

Unfortunately, if you stop filing your tax return, the CRA may force you to do it later, which may not be financially convenient for you. Therefore, it is to your advantage if you maintain an up-to-date filing status.

Another reason is that if you always file your tax return, you may be eligible to access other benefits. For instance, you may be qualified for money back if you do not owe taxes.

You may also be qualified for a federal or provincial benefit package. Examples of such packages are the Guaranteed Income Supplement (GIS), the Canada Workers Benefit (CWB), and the Ontario Trillium Benefit (OTB).

Additionally, your Registered Retirement Savings Plan (RRSP) contribution limit calculation makes use of your income as a base. So, if you do not pay tax, it will affect your contribution.


When should one file an income tax return?

As required by law, you are required to file your tax return and pay your tax before April 30, 2023, for the year 2022. As the case may be, you pay each year’s tax on April 30 of the following year. If you are self-employed, you can file and pay before June 15.

Also, if you make any contribution to an RRSP, your taxable income will be lower by the same amount. However, you may have until March 1, the same tax year, to make your contribution and report the deduction on your current year’s tax.


What happens if one files taxes late?

If you file taxes late, you may get penalties. You are charged compound daily interest on May 30, which is the tax you were to pay. Moreover, the required interest rates are subject to adjustment every three months.

To make it easier for you, start early to pay your tax in installments before the last day. This is because if you miss any payment, you must incur interest.

Aside from the interest increment, you will also face other penalties. For instance, the penalty for late filing of your income tax is 5% of the balance you owe.

Also, there is an additional 1% for every full month you file your tax after the payable date, and this is up to a maximum of 12 months. Therefore, it is better to file your taxes even if you cannot meet up with the deadline.


What are the requirements to file an income tax return?

To file a tax return, you will need to fulfill the following obligations for each income tax:

  1. Corporate income tax filing: All companies that exist and operate in Canada must file T2 income tax returns within 6 months of their year-end. In the same way, companies that carry out businesses in Canada but exist elsewhere must file a Canadian corporate income tax return.
  2. Trust and estate tax returns: Since trusts and estates have a calendar year-end, they are required to file T3 income tax returns in the space of 90 days of the year-end.
  3. Individual tax returns: Individuals must file T1 tax returns by April 30 of each year. But there are exceptions to this general rule. That is, individuals with self-employment income can extend their payment till June 15 to file their tax returns.
  4. Also, suppose the individual does not have any taxable income within the year. In that case, they are not under any obligation to file a tax return, except in cases where the individual had a capital gain during the year of disposed of capital property. But if CRA insists that they must file a tax return, then it shall be so.



Everyone who receives income in Canada is required to file an income tax return. Besides, you should file your taxes before the deadline to ensure you do not have to pay a penalty for an issue you can avoid.

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