Income Tax Return to Get Refund for International Students in Canada [2023]

Tax season in Canada started for Canadians, PR holders and international students who had an income in 2021.

The tax filing process is usually not complicated for experienced individuals.

However, filing a tax return for international students in Canada could be challenging.

Especially, when it is your first time doing your tax return, you may need some help to handle it.

There is nothing to worry about because we will be covering everything in this article only for you to be able to file your tax return as an international student in Canada.

Let’s get started with how the tax system works in Canada!

The Canadian Tax System For Income Tax Return

Constitutions of Canada permit both Federal and provincial governments to impose tax laws and rates.

The tax rates and laws of the Federal Government work as a whole all around the country, but provincial ones are specific to that province, say in BC, British Colombians should pay taxes based on the tax laws of BC Province plus the ones imposed by the Federal Government.

The first two important characteristics of the Canadian tax system are:

• Being based on the Self-assessment Principle; that is, you have to file your income and benefits tax return(T1) annually.
• Being Progressive; the lower-income earners are taxed at lower rates and the higher income earners at higher rates.

1. Taxpayers in Canada

Every individual who is living, working and studying in Canada is liable for tax and has to file their year-end return to pay their taxes.

2. Tax Administration

For filing taxes in Canada, the only organization that people deal with for their taxes is “Canada Revenue Agency (CRA)”. They don’t set the tax laws; they administer and enforce the laws.

The primary duties of CRA are:

• Processing tax filing
• Issuing tax guides and pamphlets
• Auditing taxpayers and the submitted information

3. Taxation Process

The most income you receive is taxable and you have to include it in your return. Students’ income types are as follows:

The Income you might have:

• employment income
• tips and occasional earnings
• investment income
• registered education savings plan payments
• scholarships, fellowships, bursaries, and study grants
• apprenticeship grants
• research grants
• artists’ project grants

Note: In case you don’t have any income, CRA still suggests you file your income tax return in Canada anyway to keep the track of your student tax credit. No filing = No receipt of benefits

What Do You Need to File Your Tax Return as a Student?

When the tax season comes around, we all need to get ready to file our income tax.

However, the way you would like to file your income tax return, there are certain things that you must have.

1. CRA Account

Before you file your return, you need a CRA account, which you can create on the CRA website. Definitely, your SIN is required.

2. Social Insurance Number (SIN)

This is your identity number and The CRA uses your SIN to identify you for income tax purposes. You have to give your social insurance number in Canada to anyone who prepares information slips (such as a T4 slip or Tuition and Enrollment Certificate (T2202)) for you.

An individual who does not have a SIN has 15 days from the date of an information request to apply for a SIN at any Service Canada center.

3. Forms to File Income Tax Return

In case you are a student and employed, making income, you need to collect your T4 slip, provided to you by your employer and your T2202 form, by your college, by the end of February.

3.1 T4 Slip to File Income Tax Return

This slip indicates the whole amount of gross income that was paid to you during the year and all the deductions that were withheld from that income, like employment tax.

• T4 slips, which show employment income and payroll deductions

3.2 Student Tax Credit in Canada

Students, including international students, may claim a federal non-refundable tax credit equal to 15% of eligible tuition fees. This credit can help students get a refund or a deduction from their tax balance owing.

3.3 Tuition Amount

You must have received the following form to be able to claim your eligible tuition fee.

Tuition and Enrolment Certificate (T2202)

T2202 is the Tuition, Education, and Textbook Amounts Certificate and is provided by your institution by the end of February.

This form is issued to students who meet all of the following conditions:

• This is a qualifying education program or a specified education program
• at a post-secondary educational institution
• tuition fees are more than $100
• a student is 16 years of age or older before the end of the year

Eligible tuition fees

Tuition fees that are Eligible for tax credits include the following amounts:

• admission fees
• charges for use of the library or laboratory facilities
• exemption fees
• examination fees (including re-reading charges) that are integral to a program of study
• application fees
• confirmation fees
• charges for a certificate, diploma or degree
• membership or seminar fees that are specifically related to an academic program and its administration
• mandatory computer service fees
• academic fees

Amounts that are not eligible tuition fees:

The cost of books and materials (other than books, compact disks or similar material included in the cost of a correspondence course when the student is enrolled in such a course given by an eligible educational institution in Canada).

Courses are taken for purposes of academic upgrading to allow entry into a university or college program would usually not qualify for the tuition tax credit as they are not considered to be at the post-secondary school level, such as ESL English courses.

Carry forward or transfer the tuition credits amount

If you don’t use your tuition tax credit, you can carry forward any unused amounts to next year and use it later. You can carry forward the amount as many years as all the amount is used up.

Or, after using any amount of tuition tax credit to bring your own tax payable to zero, you can transfer the unused amount to your parents or common-law partner and let them use your credit to the federal limit of $5000.

Note: if you carry forward an amount, you will not be able to transfer that amount to anybody else in the future.

Last Step in the Canadian Taxation Process

Having added your credits, you submit your income and benefits tax return to calculate your refund or balance owing. Then, the CRA processes, assesses and mails you a Notice of Assessment (NOA). If you were entitled to receive a refund, 2 weeks after your electronically filing, or 8 weeks after paper filing, you receive your amount.

Note: The last day to file your taxes in Canada is on April 30^th of the next year, but in 2023, it is exceptionally on May 2nd.  If you miss this deadline, you will be entitled to a penalty and interest.

Where to File Your Tax Return

You can file it yourself online for free, or you can file a paper return.

Please Note: Doing your own tax is not risk-free, so you’d better ask for professional Tax preparation services. The tax preparer will fill out your return and send it to the CRA electronically.

First, you should authorize a representative such as a tax preparer, or an accountant to deal with the CRA on your behalf.

When you give the CRA consent to deal with a representative, either through My Account at canada.ca/my-cra-account or in writing, you are letting that person represent you for income tax matters, at the level of authorization you specify for the tax year, or years.

Need Help Doing Your Taxes?

Even if you have a modest income and a simple tax situation, Phoenix Accounting Services Ltd. can complete your tax return with an applied discount, especially, for Cornerstone College’s students.

“This fact sheet has been prepared for general information purposes. It is not a legal document. Please refer to the CRA website for purposes of interpretation and application of the law.”