Filing Taxes as a Newcomer to Canada

What to File, When to File, What Income Counts — and the Myths That Cost Newcomers Money

Moving to Canada is exciting. Filing taxes for the first time is not.

Most newcomers don’t get into trouble because they avoid taxes. They get into trouble because they file at the wrong time, report the wrong income, or pay for filings that have zero legal effect.

This guide explains — in plain English — how Canada’s tax system actually works for newcomers, based on how the Income Tax Act is applied in practice by the
Canada Revenue Agency (CRA).

No fluff. No scare tactics. Just facts, examples, and numbers.

1. The single rule that controls everything

Canada taxes individuals by calendar tax year:

January 1 to December 31

You only file a tax return for a year in which at least one of the following is true:

1. You were a Canadian tax resident in that year, or

2. You earned Canadian-source income in that year

Your arrival date determines which year you file — not how eager you are to “get into the system.”

2. Arrival date → filing obligation (the quick truth)

👉 If you arrived between Jan 1 and Mar 31, 2026, there is nothing to file in spring 2026.

Trying anyway does not help. It backfires. We’ll show you why.

3. What happens if you try to file in spring 2026 after arriving in early 2026?

Let’s be explicit.

❌ You cannot file a valid 2025 tax return

• You were not a Canadian tax resident in 2025

• You earned no Canadian-source income in 2025

There is no legal basis for a 2025 T1 return.

❌ CRA will not assess the return

• No Notice of Assessment

• No CRA tax record

• No benefit activation

• No My CRA Account access

❌ Filing early does NOT:

• “Start your CRA profile”

• Speed up benefits

• Create My CRA access

• Make you compliant

• Help later filings

It simply wastes time — and sometimes money if you paid someone to do it.

4. What income do newcomers report (and what they don’t)

You MUST report:

• World income earned after you become a Canadian tax resident

  • Canadian employment income

  • Foreign employment income

  • Foreign interest, dividends, rental income

  • Self-employment income

You do NOT report:

• Any income earned before your Canadian residency date

• Any income from years before you arrived

Where the money is paid (foreign bank vs Canadian bank) does not matter.
What matters is when you earned it and your residency status at that time.

5. Exchange rates — how to convert foreign income properly

All foreign income must be reported in Canadian dollars (CAD).

CRA-accepted methods:

• Daily exchange rate (best for one-time payments)

• Monthly or annual average rate (best for regular income)

Rule that works:

Be consistent. CRA cares more about consistency than perfection.

6. Provincial tax implications — real numbers, real examples

Federal tax rules are the same across Canada.
Provincial tax rates are not.

Below are simplified illustrations (not advice) to show how location matters.

Scenario A: Ontario newcomer

Facts

• Arrival: May 1, 2025

• World income after arrival: $50,000

• Employment income only

• No deductions

Approximate tax impact

• Federal + Ontario tax combined

• Marginal rate enters ~29.65%

• Likely total tax payable: ~$8,500 – $9,500

Ontario has surtaxes that increase effective tax once income rises.

Scenario B: Manitoba newcomer

Facts

• Same income: $50,000

Impact

• Manitoba has higher middle-income provincial rates

• Likely total tax payable: ~$9,500 – $10,500

This surprises many newcomers who assume “all provinces are the same.”

Scenario C: Alberta newcomer

Facts

• Same income: $50,000

Impact

• Alberta has no provincial surtax

• Flat provincial structure

• Likely total tax payable: ~$7,500 – $8,500

This is why location matters even with identical income.

Key takeaway

Your province of residence on December 31 determines which provincial tax applies — not where you earned the income.

7. Benefits and MyCRA Account — what actually triggers them

❗ Critical truth

You do not unlock benefits or MyCRA Account by “trying to file.”

You unlock them by:

1. Filing a valid tax return

2. For a year in which you were a resident

3. Having that return assessed

Benefits tied to filing

• GST/HST Credit

• Canada Child Benefit (CCB)

• Provincial credits

No assessed return = no benefits.

8. Common tax forms explained (plain English)

T1 — The tax return

This is the main personal income tax return in Canada.
Everyone files a T1. There is no separate “newcomer return.”

T4 — Employment income slip

Issued by your employer.
Shows:

• Salary earned

• Income tax deducted

• CPP and EI contributions

If you worked in Canada, you’ll almost always receive a T4.

T5 — Investment income slip

Issued by banks or institutions.
Shows:

• Interest

• Dividends

Foreign equivalents are reported manually.

Notice of Assessment (NOA)

Issued by CRA after your return is assessed.
This document:

• Confirms your tax position

• Is required for My CRA Account

• Is often required for loans, benefits, and programs

9. Who should file your taxes? (cost vs reality)

Free tax clinics

Best for:

• Low income

• Simple situations

• First-time filers

Cost: $0

DIY NETFILE software

Best for:

• Simple employment income

• Comfortable with instructions

Cost: Low

Tax clerks / consultants

Unregulated titles.
Skill varies widely.

Use only if:

• You understand what they’re filing

• They explain, not rush

Tax accountants (CPA)

Best for:

• Foreign income

• Self-employment

• Complex residency

• Audits or corrections

Cost: Higher — but justified when complexity exists.

10. Myth-busting: bad advice newcomers hear

❌ “File early to start your CRA profile”

False. CRA profiles are created by assessed returns, not attempts.

❌ “File a nil return to get benefits”

False. Nil returns only apply when a filing obligation exists.

❌ “You must file immediately after landing”

False. Filing is tied to tax years, not immigration dates.

❌ “Foreign income doesn’t count if paid abroad”

False. Residency controls taxation, not bank location.

11. Bottom line

• Filing taxes too early does nothing

• Filing incorrectly creates future problems

• Filing correctly, at the right time, unlocks:

  • Benefits

  • My CRA Account

  • Financial credibility in Canada

In Canada, timing matters as much as honesty.