Income for parents grandparents sponsorship

[palaman4]

Hello All,

Thank you for reading, I promise your advice will be rewarded with an upvote.

I recently have received an invitation to sponsor parents grandparents for Permanent residency. I applied for this in 2020 when my annual salary for last 3 years was much more that required for sponsorship my parents. But in 2021 I did IT contracting remotely from India, while I generated good income (for my corporation) but I did not withdraw much salary from my corporation for 2021 as it was cheaper for me to live in India. As a result my personal income filed for 2021 does not meet current income criteria for sponsoring parents. Should I correct my taxes for 2021 before applying or should I explain my case as is to CiC?

 

[Naturgrl]

Hello All,

Thank you for reading, I promise your advice will be rewarded with an upvote.

I recently have received an invitation to sponsor parents grandparents for Permanent residency. I applied for this in 2020 when my annual salary for last 3 years was much more that required for sponsorship my parents. But in 2021 I did IT contracting remotely from India, while I generated good income (for my corporation) but I did not withdraw much salary from my corporation for 2021 as it was cheaper for me to live in India. As a result my personal income filed for 2021 does not meet current income criteria for sponsoring parents. Should I correct my taxes for 2021 before applying or should I explain my case as is to CiC?

Your CRA NOAs must meet LICO for 2020, 2021 and 2022. So yes you need to have your taxes redone. You cannot explain your case to IRCC as application will be refused. How many people in your family to meet LICO? Do you have NOAs for all years and filed taxes in Canada?

 

[scylla]

Hello All,

Thank you for reading, I promise your advice will be rewarded with an upvote.

I recently have received an invitation to sponsor parents grandparents for Permanent residency. I applied for this in 2020 when my annual salary for last 3 years was much more that required for sponsorship my parents. But in 2021 I did IT contracting remotely from India, while I generated good income (for my corporation) but I did not withdraw much salary from my corporation for 2021 as it was cheaper for me to live in India. As a result my personal income filed for 2021 does not meet current income criteria for sponsoring parents. Should I correct my taxes for 2021 before applying or should I explain my case as is to CiC?

IRCC will not accept an explanation. Your CRA NOA must show income for each year that meets or exceeds LICO. Foreign tax returns are not accepted. As of now, refusal would be guaranteed since you have insufficient income for 2021.

 

[palaman4]

Your CRA NOAs must meet LICO for 2020, 2021 and 2022. So yes you need to have your taxes redone. You cannot explain your case to IRCC as application will be refused. How many people in your family to meet LICO? Do you have NOAs for all years and filed taxes in Canada?

Thank you for your reply! Yes I have Noa for 2020, 2021 but not done for 2022 yet. And 2021 personal income is lesser than required.

 

[Naturgrl]

Thank you for your reply! Yes I have Noa for 2020, 2021 but not done for 2022 yet. And 2021 personal income is lesser than required.

What do mean not done? Taxes for 2022 were due on May 2, 2023. If you filed for 2021, then how will you all of sudden have more income? You had to include all income so did you under-report your income. You may be subject to audits on all your tax years. Not sure you are going to get this all done prior to application deadline.

 

[canuck78]

Hello All,

Thank you for reading, I promise your advice will be rewarded with an upvote.

I recently have received an invitation to sponsor parents grandparents for Permanent residency. I applied for this in 2020 when my annual salary for last 3 years was much more that required for sponsorship my parents. But in 2021 I did IT contracting remotely from India, while I generated good income (for my corporation) but I did not withdraw much salary from my corporation for 2021 as it was cheaper for me to live in India. As a result my personal income filed for 2021 does not meet current income criteria for sponsoring parents. Should I correct my taxes for 2021 before applying or should I explain my case as is to CiC?

Two potential issues. Income and where have you been living since 2020. It’s unclear how much time you have been living in Canada and India. As already indicated restating your income puts you at risk of auditing all your other tax returns.

 

[Copingwithlife]

Hello All,

Thank you for reading, I promise your advice will be rewarded with an upvote.

I recently have received an invitation to sponsor parents grandparents for Permanent residency. I applied for this in 2020 when my annual salary for last 3 years was much more that required for sponsorship my parents. But in 2021 I did IT contracting remotely from India, while I generated good income (for my corporation) but I did not withdraw much salary from my corporation for 2021 as it was cheaper for me to live in India. As a result my personal income filed for 2021 does not meet current income criteria for sponsoring parents. Should I correct my taxes for 2021 before applying or should I explain my case as is to CiC?

You’re opening up a Pandora’s box . Be warned
You have to adjust your corporation taxes , payroll account . T2 adjustment, T4 adjustment. You’d be subject to interest & penalties for the additional income . You’d have to adjust your T1 return, amend anything and everything. T2, T1, T4’s


https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/file-information-returns-slip-summaries/make-corrections-after-filing/amend.html


“You also cannot change the nature of the payments after the financial statements and information returns have been filed (including the T4).

Depending on your situation, this may be considered retroactive tax planning and is inaccurately changing the reporting of the income.”

The above is directly from the Federal Government. Because they are aware people manipulate numbers

 

[palaman4]

You’re opening up a Pandora’s box . Be warned
You have to adjust your corporation taxes , payroll account . T2 adjustment, T4 adjustment. You’d be subject to interest & penalties for the additional income . You’d have to adjust your T1 return, amend anything and everything. T2, T1, T4’s


https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/file-information-returns-slip-summaries/make-corrections-after-filing/amend.html


“You also cannot change the nature of the payments after the financial statements and information returns have been filed (including the T4).

Depending on your situation, this may be considered retroactive tax planning and is inaccurately changing the reporting of the income.”

The above is directly from the Federal Government. Because they are aware people manipulate numbers

Thank you so much for replying! What about the 3 options below 1) if I claim that I took a dividend my from my corporation in 2021 to improve my income for that year. That way I would avoid amending payroll or corporation tax changes. 2) what if I simply pay more 2021 personal tax claiming that I earned some extra personal income in that year from some other work. 3) what if I claim that for the year 2021 I earned extra income in India.

 

[canuck78]

Thank you so much for replying! What about the 3 options below 1) if I claim that I took a dividend my from my corporation in 2021 to improve my income for that year. That way I would avoid amending payroll or corporation tax changes. 2) what if I simply pay more 2021 personal tax claiming that I earned some extra personal income in that year from some other work. 3) what if I claim that for the year 2021 I earned extra income in India.

How much time have you been spending in Canada during the past 6 years? Discovering that you suddenly have cash income years later and cash income has not been a typical claim would raise an alarm for potential tax fraud. Will potentially lead to auditing of longterm returns. How much personal income have you stated since 2018? Missing a few hundred dollars of income versus a few thousand will also make a big difference

 

[Naturgrl]

Thank you so much for replying! What about the 3 options below 1) if I claim that I took a dividend my from my corporation in 2021 to improve my income for that year. That way I would avoid amending payroll or corporation tax changes. 2) what if I simply pay more 2021 personal tax claiming that I earned some extra personal income in that year from some other work. 3) what if I claim that for the year 2021 I earned extra income in India.

You need a tax accountant specializing in business and worldwide income. Assume you have been a resident and living in Canada during the last 3 years.