How to file a Canadian non-resident tax return and claim a tax refund
(Last updated: 11 Mar 2024)
Are you on a working holiday visa in Canada and you’re not sure about how to file your tax return or if you must file a Canadian tax return?
We have summed up some key information for you which will help when claiming your Canadian tax refund as a non-resident.
Firstly, who is a non-resident of Canada for tax purposes?
For income tax purposes, you are considered a non-resident of Canada if:
- You normally or routinely live in another country and you are not considered a Canadian citizen
- You stayed less than 183 days in Canada throughout the tax year
- You do not have significant residential ties in Canada
How to determine your Canadian residency status for tax purposes
You are an ordinary resident in Canada for tax purposes if:
- Canada is the place where you, in the settled routine of your life, regularly, normally or customarily live.
- If you have residential ties to Canada
Significant residential ties in Canada include:
- A home in Canada
- A spouse or common-law partner in Canada
- Dependents in Canada
Secondary residential ties
Other residential ties include a car or furniture, bank accounts or credit cards a driver’s license, a passport, or health insurance.
These are considered as secondary residential ties which may also be relevant in determining your residency status.
What is a factual resident of Canada?
You are considered a factual resident of Canada if you are living outside Canada for part of the year, but you maintain significant residential ties with Canada. Factual residents are still considered to be a resident of Canada for income tax purposes.
You may be considered a factual resident if you maintain residential ties with Canada and are:
- Working temporarily outside Canada
- Vacationing outside Canada
- Commuting from Canada to your place of work in the United States
- Attending school in another country
What is a deemed resident of Canada?
You may be considered a deemed resident of Canada if:
- You stayed in Canada for 183 days or more in the tax year
- You have not established significant residential ties with Canada
- You are not considered a resident of another country under the terms of a tax treaty between Canada and that country
Essentially, you are considered a deemed resident of Canada if you have not established significant residential ties with Canada to be considered a factual resident, but you have stayed in Canada for 183 or more days in the tax year.
What is a deemed non-resident of Canada?
You may be considered a deemed non-resident of Canada if you established residential ties in a country that Canada has a tax treaty with and you are considered a resident of that country.
The same rules apply to deemed non-residents of Canada as non-residents of Canada.
What is the 183-day rule in Canada?
The 183-day rule will assist in determining your residency status in Canada. If you have spent 183 days or more in Canada you are deemed a resident for tax purposes.
When calculating the number of days spent in Canada during the tax year you must include each day or part of a day that you were in Canada.
Sprintax Canada tax preparation software can advise you on your residency status for tax purposes. Simply create an account to get started.
What taxes do non-residents have to pay on their income?
Your earnings will be subject to income tax in Canada. The federal and provincial tax rate you pay depends on your earnings and the province you reside in. Federal tax rates range from 15% to 33%.
Canadian Federal tax rates and brackets in 2024
| Tax rate | Income bracket |
| 15% | Up to $55,867 |
| 20.5% | $55,867- $111,733 |
| 26% | $111,733 – $173,205 |
| 29% | $173,205 – $246,752 |
| 33% | Above $246,752 |
There is a tax-free allowance for all taxpayers on earnings up to $15,705 in 2024– meaning you pay no federal tax on your earnings up to $15,705. In 2023 the tax-free allowance was $15,000.
You can see provincial tax rates and brackets here.
What is the 90% rule for non-residents in Canada?
If you have recently arrived or returned to Canada you may be entitled to full non-refundable tax credits if you meet the 90% rule.
The 90% rule refers to at least 90% of a non-residents income from the tax year being sourced in Canada. If you have earned at least 90% of your net income in the tax year in Canada you will be entitled to claim non-refundable tax credits, allowing you to earn up to $15,705 tax free income in Canada. If more than 10% of your net income was earned outside Canada you will not be able to claim the full tax credits.
In summary, a person meets the 90% rule if, in the part of the year before you moved to Canada:
- You didn’t earn any foreign-source income
- 90% or more of your income was sourced in Canada
By meeting the 90% rule you can avail of and claim the full amount of Canadian tax credits, regardless of the fact that you didn’t live there all year.
If you do not meet the 90% rule, the credits will be pro-rated based on the date you entered Canada.
It is important when completing your TD1 form that you remember the 90% rule to avoid claiming this tax return when you are not entitled to it, resulting in owing tax back to the Canadian authorities. This form must be completed when you are starting a new job in Canada.
Do non-residents have to file an income tax return in Canada?
Anyone who has worked and paid tax in Canada throughout the year are legally obliged to file a non-resident tax return in Canada. This is important as not only does it ensure that you are tax compliant, but you may also be due a tax refund.
By filing a tax return this will ensure that you are tax compliant and you will avoid jeopardizing future Canadian visa applications.
If you have an underpayment of tax, you must pay the balance to the Canada Revenue Agency (CRA). On the other hand, it is also possible that you may be due a tax refund as the average Canadian tax refund is $998!
Do I need to report foreign income to Canada as a non-resident?
Yes, you must report any income earned outside of Canada on your tax return. This is important as this information is used to identify what tax credits you are eligible for in Canada.
Of course, you will not be double taxed on any income earned outside of Canada.
How do I file my Canadian non-resident tax return
To file your tax return you will need your Social Insurance Number (SIN) or Individual Tax Number (ITN), along with your T4 slip.
SIN is nine digits long and it is used by government agencies as a form of identification. To be eligible for a SIN you must have a work permit.
If you are not eligible for a SIN, you can apply for an ITN which is used by the CRA to identify you for tax purposes.
Find more information on Canadian Individual Tax Number (ITN) here.
What is a T4 slip?
A T4 slip outlines your income and tax deductions throughout the year and it is given to you by your employer. If you have been employed in multiple places throughout the year, you will need a T4 slip from each employer.
You should receive your T4 slip from your employer by the end of February.
You can prepare your Canadian non-resident tax return hassle-free with Sprintax Canada. Create an account to get started.
When is the tax return deadline for non-residents of Canada?
The Canadian tax deadline for filing 2023 tax returns is 30 April 2024.
It is important to file your 2023 tax returns by the deadline to avoid incurring fines or penalties from the CRA.
If you have your documents ready, get ahead of the queue and avoid the ‘deadline rush’ by filing your tax return early.
The earliest date you can file your 2023 taxes is 19 February 2024.
What is the penalty for filing your income tax return after the deadline?
The late filing penalty is 5% of your tax liability, plus an additional 1% for each month after the deadline, to a maximum of 12 months.
How do I claim my Canadian tax refund?
In order to claim a tax refund, you must file a tax return.
If the CRA receives your tax return on or before the deadline, they aim to send your refund within:
- 2 weeks if you file online
- 8 weeks if you file a paper return
Refunds for non-residents living outside Canada that file a personal income tax return may take up to 16 weeks.
Who can help me file my Canadian non-resident tax return?
By filing your Canadian tax return with an agent like Sprintax Canada they will ensure that you are tax compliant with the CRA. We will guide you through the entire process from start to finish. All you need to do is answer a few simple questions, print your return and mail it to the tax office.
Why choose Sprintax Canada?
- It is a quick online service
- We will ensure that you are 100% tax compliant with the CRA
- Stress-free tax return process
- Guaranteed maximum legal tax refund for federal and provincial tax
The average Canadian tax refund for non-residents is $998!
Get started with your Canadian non-resident tax refund here.
