There is some very important general information you need to know about some of the issues concerning taxes in Canada. We’re going to show you some basic information about resident alien taxes, non-resident taxes and dual-status taxpayers. Let’s begin…

 

For resident alien taxes…

You, as a legal Canadian resident, will be subjected to the very same tax rules that Canadian citizens are subjected to. You need to ensure that you report all of your income on annual tax returns, no matter the country you earn it in.

 

For non-resident taxes…

If you’re not a resident of Canada, you still need to pay income taxes to the CRA, but only on the income that’s effectively connected to Canada. This usually includes the money that you earn while in the country. The CRA doesn’t have the authority to impose taxes on the income which non-residents earn in a foreign country or your home country. You will only be expected to report the amounts that are considered as Canadian-source income. You can also claim the credits and deductions available to Canadian citizens and resident aliens.

 

For dual-status taxpayers…

For the transitioning period from non-resident to resident status, then you will be considered as a dual-status taxpayer. As the name implies, this taxpayer will have to file two tax returns for the year. You’d have to pay a return for the period of the year you were considered as a non-resident and then for the period you were considered as a resident. To avoid filing two separate returns, you do have the option to be treated as a full-year resident throughout the year of transitioning.

 

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