Clarification about Income Tax Requirements

[_KK8512_]

Hey all,

As those of you applying for citizenship probably know, there is a condition stating that applicants must meet personal income tax obligations in 3 tax years fully or partially in the 5 years preceding the time the application is submitted.

My case is as follows: I came to Canada in December 2013 as an International Student. I finished grad school in February 2016 and I got my PGWP and I have been working since March 2016. In May 2016 I applied to Express Entry as I was eligible for it and in November 2016 my application was accepted and I got PR status. By December 2018, I will be eligible based on the number of days I have been in Canada.

I have been filing taxes all years since 2014 (2013 I came on Xmas day and obviously I didn't work so those 5 days won't make a ton of difference). As I understand it, as a student I wasn't required to file taxes since I had no income basically. From 2016 onwards I worked so I filed taxes the regular way. As I understand the income tax requirement, I think that I have fulfilled that condition.

Question: am I clear to apply for citizenship by December 2018 ?

Another interpretation of IRCC's requirement, in my opinion, is that I need to show IRCC tax filings in 3 tax years where I am required to do so. If it is the latter, then I need to file my 2018 income tax return before I can apply for citizenship, so I would need to wait until next year. That is the part that is not 100% clear, in my opinion.

Your views and answers are most appreciated

 

[Avadava]

You are required to file taxes even though you have zero income.

I would put "required to file" for 2015, 2016, and 2017 on your application and you should be good to go. No need to wait till 2019 to file for 2018.

Edit to add more details:

As an international student, you are considered a resident for tax purposes, if:
- spend more than 183 days per year in Canada
- own or rent a place to live
- have a Canadian bank account or driver's license
- have other significant ties to Canada

If you are in this category, you are eligible for GST credits, tuition carry-forward credits, and other provincial credits or tuition rebates.
That is why you are required to file taxes even if you have zero income. (It's a good thing you did).

 

[spyfy]

You are required to file taxes even though you have zero income.

I would put "required to file" for 2015, 2016, and 2017 on your application and you should be good to go. No need to wait till 2019 to file for 2018.

Edit to add more details:

As an international student, you are considered a resident for tax purposes, if:
- spend more than 183 days per year in Canada
- own or rent a place to live
- have a Canadian bank account or driver's license
- have other significant ties to Canada

If you are in this category, you are eligible for GST credits, tuition carry-forward credits, and other provincial credits or tuition rebates.
That is why you are required to file taxes even if you have zero income. (It's a good thing you did).

Unfortunately this is incorrect. You are not required to file just because you are entitled to tax credits. It is of course RECOMMENDED to file since you get those credits, but the REQUIREMENT to file is something different. One example reason that makes you required to file is if you owe taxes. Being a resident for tax purposes alone is NOT a reason to be required to file.

As to the question of the OP:
You can of course apply. You would only have a problem if in Three or more of the five years you were required to file AND you didn't file.

As long as you filed it is completely irrelevant if you were required to do so or not.

 

[Avadava]

but the REQUIREMENT to file is something different. One example reason that makes you required to file is if you owe taxes. Being a resident for tax purposes alone is NOT a reason to be required to file.

Actually, you aren't required to file only when you owe taxes. I have this information from Canada Revenue Agency. I had zero income and didn't file taxes. As a result, my Child Benefits stopped coming in. Called CRA, they told me I am REQUIRED to file taxes even though I have zero income. Asked accountant about it too. If you are a resident, you are required to file.

 

[spyfy]

Unfortunately this is incorrect. You are not required to file just because you are entitled to tax credits. It is of course RECOMMENDED to file since you get those credits, but the REQUIREMENT to file is something different. One example reason that makes you required to file is if you owe taxes.

As to the question of the OP:
You can of course apply. You would only have a problem if in Three or more of the five years you were required to file AND you didn't file.

As long as you filed it is completely irrelevant if you were required to do so or not.

Actually, you aren't required to file only when you owe taxes. I have this information from Canada Revenue Agency. I had zero income and didn't file taxes. As a result, my Child Benefits stopped coming in. Called CRA, they told me I am REQUIRED to file taxes even though I have zero income. Asked accountant about it too. If you are a resident, you are required to file.

I did NOT say that you are only required to file taxes if you owe taxes. I said there are several reasons why one might need to file taxes, your child benefits is one of them. As i said owing taxes is one EXAMPLE reason why one has to file taxes, not the only one.

It is, however, incorrect that simply being a tax resident and having income makes on REQUIRED to file taxes according to the Income Tax Act.

Again, there are many reasons that make you required to file taxes. But having income in itself is not such a reason.

 

[spyfy]

Actually, you aren't required to file only when you owe taxes. I have this information from Canada Revenue Agency. I had zero income and didn't file taxes. As a result, my Child Benefits stopped coming in. Called CRA, they told me I am REQUIRED to file taxes even though I have zero income. Asked accountant about it too. If you are a resident, you are required to file.

Here is a list of reasons directly from the CRA:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/you-have-file-a-return.html

As you can see "Being a resident of Canada" is not on the list. Not even "Having income" is on the list.

In fact, as you can see, even receiving the Childcare Benefit is not a reason why you MUST file taxes. You just SHOULD file taxes.

Of course if you don't file, you might lose those benefits. So it's still bad for you. That does NOT mean that you are required to file taxes, you are just missing out on benefits.

And for Citizenship the REQUIREMENT to file taxes counts, not if it's recommended to file taxes.

 

[_KK8512_]

Here is a list of reasons directly from the CRA:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/you-have-file-a-return.html

As you can see "Being a resident of Canada" is not on the list. Not even "Having income" is on the list.

In fact, as you can see, even receiving the Childcare Benefit is not a reason why you MUST file taxes. You just SHOULD file taxes.

Of course if you don't file, you might lose those benefits. So it's still bad for you. That does NOT mean that you are required to file taxes, you are just missing out on benefits.

And for Citizenship the REQUIREMENT to file taxes counts, not if it's recommended to file taxes.

Thanks for the replies spyfy.

So yes, I did file taxes in 2014 and 2015 for GST/HST tax credits and my understanding is more in line with what you said: it isn't a requirement to file taxes but it is recommended to do so. Your other point was also interesting, highlighting that as long as taxes are filed, whether it was required or not becomes irrelevant. So your interpretation is that because I have been filing taxes for the last 4 years, I have cleared the income tax requirement set out by the government.

 

[Goku]

Unfortunately this is incorrect. You are not required to file just because you are entitled to tax credits. It is of course RECOMMENDED to file since you get those credits, but the REQUIREMENT to file is something different. One example reason that makes you required to file is if you owe taxes. Being a resident for tax purposes alone is NOT a reason to be required to file.

As to the question of the OP:
You can of course apply. You would only have a problem if in Three or more of the five years you were required to file AND you didn't file.

As long as you filed it is completely irrelevant if you were required to do so or not.

I second that. You are not required to file but it recommended to file so that you receive benefits such as OTB if you are eligible. If you don't file you are the one losing benefits and not them.

Actually, you aren't required to file only when you owe taxes. I have this information from Canada Revenue Agency. I had zero income and didn't file taxes. As a result, my Child Benefits stopped coming in. Called CRA, they told me I am REQUIRED to file taxes even though I have zero income. Asked accountant about it too. If you are a resident, you are required to file.

They asked you to file your tax return even though it was zero is because they recalculate your payment every July based on your adjusted family net income from the previous year.
Source: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-we-calculate-your-ccb.html

 

[Avadava]

They asked you to file your tax return even though it was zero is because they recalculate your payment every July based on your adjusted family net income from the previous year.
Source: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-we-calculate-your-ccb.html

That makes sense then. I just remember I was told to file even with zero income.

Nevertheless, the OP did file even though not required, so he satisfied the 3 year requirements.