17 Why File My Tax Return?

There are some situations when one is required to submit a tax return filing.  These include when one owes tax for the year or CRA has sent a request to file a tax return.

Even though there is no requirement to file a tax return at times, there are many advantages to being up to date and filing an Income Tax and Benefit Return (T1) each year:

• Getting the refund that is owed to you. One must file a tax return in order to access any refund.  If you are in a refund position for the taxation year, you have already overpaid an excess amount of tax and provided the government an interest-free loan.  When one files a return, any refund will be directly processed to you.
• Beginning or continuing to receive payments such as the goods and services tax / harmonized sales tax (GST / HST) credit or the Canada child benefit (CCB). The information from your tax return is used to determine the qualifying amount for these benefits.  Without a submitted tax return, these benefits may not continue to be processed.
• Carrying forward or transferring unused tuition credits. Individuals can apply any unused tax credits against any future taxes owing or assist in reducing another person’s tax liability.
• Earning registered retirement savings plan (RRSP) contribution room. With a filed tax return, one can accumulate RRSP contribution room to save and invest increased funds for retirement.
• Accessing social assistance programs or qualifying for certain financial assistance benefits. As a trade apprentice, there are some non-profit organizations that run programs to assist unemployed or underemployed trade workers to find suitable employment, update short-term training tickets, and have all the tools required performing job requirements.  Some of these programs will review an individual’s latest Notice of Assessment (NOA) from the last filed tax return to evaluate if you qualify for their program.  Many financial support benefits administered by CRA also require that an individual is up to date on their tax return filings.  Some examples of previously offered financial support benefits include the Canada Recovery Benefit (CRB), Canada Housing Benefit, and Canada Dental Benefit.

It is recommended to submit a completed Individual Tax and Benefit Return (T1) to Canada Revenue Agency every taxation year that one is a Canadian Tax Resident.