Only two things in university are certain — graduation and taxes.
“I know that a lot of times the first time someone goes to university, it might be the first time they’ve had to file their own taxes,” said Deandra Doyle, a spokesperson for the Canada Revenue Agency.
Doyle is a St. Thomas University alum, and said she knows what it’s like to be a broke college student.
Even if students aren’t making an income, she urges them to do their taxes. Students are entitled to certain benefits and credits that can make a difference financially. Students can also file multiple years at a time — an advantage to those who forgot in the past.
“Taxes are not as scary to file as you think,” she said.
1. Getting started
Doyle said planning ahead is key to receiving refunds faster and avoiding interruptions to benefit and credit payments. Filing well before the due date will also give students time to seek help.
The deadline for filing this year is April 30, but because it falls on a Saturday, the CRA will consider it on time if they receive it by May 2 or postmarked on that date.
Balances owed from 2021 are due on April 30.
“Learn about your taxes” is a tool created by the CRA that has lessons on what taxes are, why Canadians pay taxes and how to understand pay cheques, pay stubs and income tax lists.
The tool then walks the user through how to do their taxes.
“It’s specifically made to help you learn about your taxes and empower you to do your taxes on your own,” said Doyle.
To prepare, students should gather information slips like T4s and T4As and collect receipts or support documents for deductions. Doyle said these will come in the mail by the end of February.
Students who received benefits from the CRA in 2021, like the Canadian Recovery Benefit, will receive a T4 information slip by the end of February. They are also available on the My Account section of the CRA website.
“What’s important to remember about those is that when most COVID-19 benefits were paid, some taxes were withheld as a source.”
This means that depending on the situation, someone could get a refund or owe more. If people are unable to pay what they owe, the CRA has options like an expanded payment arrangement and tax payer relief, said Doyle.
“It’s really important to remember that you shouldn’t not file because you’re afraid you might owe,” said Doyle. “There are always ways that we can work with you.”
2. How to file
Doyle recommends students make a profile on My Account, which is made for people doing their taxes on their own. Through the account, users track their refunds, return status and make payments.
On My Account, students can also change their address and direct deposit information before they file.
“We then recommend that you verify all your personal information such as your address and bank account — make sure they’re up to date with the CRA.”
Next, users choose how to file. One online option Doyle mentioned was Netfile. Doyle said there are a variety of approved software on the CRA website that are low cost or free.
Doyle recommends students file online — users who have direct deposit can get their return in eight days, as opposed to a 10 to 12 week wait for a paper return.
“It’s the fastest and easiest way to do your taxes,” she said.
Students with “simple tax situations” and “modest incomes” are eligible to attend a tax clinic run by the Community Volunteer Income Tax program where volunteers will do attendees’ taxes free of charge. A simple tax situation is where income comes from programs like social assistance or scholarships. A modest income is $35,000 for one person or $45,000 for two people.
Here, community organizations partner with the CRA to file peoples’ taxes for free. These clinics take place virtually and in-person around Canada.
There will be one specifically geared towards students at University of New Brunswick Law from March 1 to April 30.
3. Benefits for students
The tuition tax credit is a non-refundable tax credit, which means it will reduce the overall amount of taxes owed. Students can carry forward an unused amount, but they have to claim it the first year they owe income tax.
“Most of the money you spend on tuition may be used to claim the tuition tax credit, ” said Doyle.
She said students can also transfer a tuition tax credit to someone in their family.
Another benefit geared toward students is the goods and services tax [GST] or the harmonized sales tax credit [HST], which is for people with low or modest incomes.
Potential qualifiers are anyone who turns 19 before 2022, people who have a spouse or common law partner and parents who live with their child.
GST and HST credits are paid out four times a year. For these credits, there’s no paperwork.
“As soon as you file your tax returns, you’re automatically considered.”
The last benefit Doyle pointed out is eligible moving expenses.
“If you’re a full-time student, you may be eligible to deduct moving expenses, if you moved more than 40 kilometers closer to a new place of work or post-secondary education.”
Students are only allowed to deduct expenses from the amounts they are required to include in their income like scholarships, bursaries and research grants.
Moving for a summer job or starting a new business qualifies students for this category as well.
International students’ tax obligations depend on their residency status, which is determined by factors like if they have a home in Canada, a Canadian driver’s license or a health card.
Residents of Canada may be eligible for payments or credits even if they don’t have an income or taxes to pay. Generally non-residents will only have to report Canadian-source income, like employment.
Doyle said that all students, regardless of their situation, should file their taxes.
“Having ownership over your own financial situation, it can help you be more empowered to make financial decisions on your own,” said Doyle. “If you know what benefits and credits and things are available to you, it can help you maximize your return in tax time.”