Did you immigrate to Canada and become a resident of the country in 2024?

If you’re a newcomer to Canada, you become a resident for income tax purposes when you establish significant residential ties (such as a home or spouse or dependants living in Canada) in the country. Usually, these are established the day you arrive in Canada.

If you don’t have a home, a spouse or common-law partner, or dependants living with you in Canada, you’ll still be considered a resident if you’ve any of the following residential ties:

  • Personal property in Canada (car, furniture, etc.)
  • Social ties (memberships in recreational or religious organizations in Canada)
  • Bank accounts or credit cards issued in Canada
  • A Canadian driver’s licence
  • A Canadian passport
  • Health insurance with a Canadian province or territory

Did you know? If you were a resident of Canada in an earlier year and you moved away from Canada, you’ll be considered a Canadian resident for income tax purposes when you move back and re-establish your residential ties.

As a resident of Canada, you must file a tax return, for part or all of the year, if you:

  • Have to pay taxes or
  • Want to claim a refund

Even if you didn’t have any income for the year, you should still file a return as it lets the Canada Revenue Agency (CRA) determine your eligibility for certain benefits like the GST/HST credit, Canada child benefit, and other provincial/territory programs.

Reporting the income that you earned before you became a Canadian resident helps the CRA determine the amount of non-refundable and refundable tax credits you’re entitled to.

In order to receive your non-refundable Canadian tax credits (such as the basic personal amount, age amount, and spouse amount) in full :

  • at least 90% of your net income must come from Canadian sources (90% rule), for the part of the year you were not a Canadian resident or
  • your net income from foreign and Canadian sources for the year must be zero

If you don’t meet the 90% rule, then certain credits will be prorated based on the number of days you lived in Canada.

Note: If you don’t meet the 90% rule, H&R Block’s 2024 tax software will automatically prorate certain credits you’re eligible to claim based on the date of arrival you enter on the Immigration, Emigration, and Residency Status page. This page can be found by navigating to Get Started, then Immigration/Emigration.

Example:

Jane arrived in Canada on May 13, 2024. She didn’t have any income from Canadian sources while she was a non-resident but she did have foreign income during the year. Since Jane doesn’t meet the 90% rule requirements, she can only claim prorated amounts for certain non-refundable tax credits. In her case, for example, she can claim a prorated basic personal amount of $9,982.36 calculated as follows:

(232 days in Canada ÷ 365 days in 2024) × $15,705 = $9,982.36