Income tax in Canada is levied not just on Canadian citizens but on non-residents too and the income that nonresidents earn from Canadian sources will be taxed. Nonresident tax is levied only on the income that is received from sources in Canada and the worldwide income of the nonresident is not considered for taxation. For most of the nonresidents that income tax is deducted at source from the gross pay when being paid to them by the employer and the tax that is deducted is deposited by the employer to the Canadian Revenue Agency (CRA). To know if you are liable to pay nonresident tax, you will first have to determine your Canadian residency status with regard to taxation.

Ascertain Your Canadian Residency Status

There are a lot of factors that are considered while determining the residency status of an individual in Canada. The most important factor is said to be the residential ties that the non-resident has in Canada or is in the process of establishing. Some of the factors that are considered to be residential ties to Canada are

• Having a home in Canada

• Having personal property in Canada (car, furniture, etc.,)

• Have economic ties with Canada

• Have a spouse or dependents or common-law partner in Canada

• Having social ties in Canada

• Canadian driving license

• Canadian bank account or Canadian credit cards

• Health insurance with any of the Canadian territories or provinces

If you still are not able to identify your residency status then you can fill in the Form NR74 or NR73 and then send it to the International Tax Services Offices to seek clarity on your residential status.

Getting the Relevant Forms Needed for Tax Return Filing

If you have to file nonresident tax then you will require obtaining a few forms like the Canadian T4 form that is supposed to be given to you by the Canadian employer. The T4 form will have a summary of all your earnings and deductions that have been made by the employer and are usually mailed to the address that is given by the nonresident to the employer. These forms are important for international tax filing and therefore ensure that the correct address is given to the employer to receive them. Employers will issue the T4 form generally between January and March so that you can file the nonresident tax return by April 30th.

Completing and Filing the Tax Return

You will require the T1 Return form to file your nonresident tax and the tax package that is required will contain forms like 428 forms, Schedule 1 Federal Tax form, Schedule A form and the T4 form. If you are not comfortable filling in the form, then you can always avail the services of a tax accountant of taxi companies who will get your form filled for a small fee. Once all the forms are filled and checked properly you can mail the return forms along with the original T4 form that is received from your employer to the International Tax Services Office.

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