Nil Income Tax Return in Canada

Do I Have to File Taxes If I Have No Income Canada?

Filling out tax forms to file a tax return is fatiguing – So why on earth would anyone file a tax return if they don't have to? Well, there's one particularly important reason why – you might get a hefty tax refund check in the mail.

Although you might not be required to file a tax return, it might be wise to file one anyway, even if you don’t technically need to. That’s because there could be cash owed to you by the Canada Revenue Agency and that’s quite much to miss out on.

It could come from two sources: reclaiming taxes you’ve already overpaid for, or claiming tax credits that you’re entitled to, including money from the third stimulus check if you haven’t already received it.

There are several benefits available to those who file zero-income tax returns. While it is not required to file your income tax return if you have no income, you will not be able to receive any money you are eligible for without filing your income taxes.  Here is a list of those government benefits.

Federal Benefits and Credits Put Cash into Your Account

1. Canada Child Benefit

The Canada Child Benefit (CCB)  provides tax-free monthly payments to parents or guardians of children. The CCB might include the Child Disability Benefit and any related provincial and territorial programs.

For those with lower income, the CCB can amount to hundreds of dollars each month, which can be the difference between struggling to support your family during this time of high inflation or getting by a little more easily.

2. Disability benefit

A disability benefit is a tax-free, financial payment to support your well-being. The disability benefit is a monthly payment you can get if you: are under 65, contributed enough to the Canada Pension Plan, or have a mental or physical disability that regularly stops you from doing any type of substantially gainful work. It is a non-refundable tax credit that helps those who are impaired by reducing or eliminating their taxes.

3. Pension

In Canada, pension programs and tax filing are closely linked, as various types of pension income are subject to taxation and specific rules apply to how they are reported on tax returns.

4. Old Age Security

Old Age Security (OAS) is a social welfare program in Canada that provides a basic income to seniors aged 65 and older who meet specific residency requirements. It is one of the pillars of Canada's retirement income system

5. Guaranteed Income Supplement

The Guaranteed Income Supplement (GIS) is a benefit provided by the Government of Canada to support low-income seniors. To continue receiving your GIS payments, you need to file your income tax return to confirm your eligibility.

6. Canada Workers Benefit

The Canada Workers Benefit (CWB) is a federal government program in Canada aimed at providing financial assistance to low-income individuals and families who are part of the workforce. It is designed to supplement the income of low-wage earners and encourage them to remain in the workforce.

7. Goods and Services Tax or Harmonized Sales Tax Credit GST/HST

The GST/HST is a tax-free payment for individuals and families with a low income. If you are eligible then the benefit will automatically be applied to your tax return.

8. Ontario Trillium Benefit

An additional provincial credit is available which can issue you monthly money based on your tax return.

This benefit includes 3 types of tax-free payments which are meant to help low-to-medium income families with energy costs as well as property and sales tax. The three benefits included are:

  • Northern Ontario Energy Credit
  • Ontario Energy and Property Tax Credit
  • Ontario Sales Tax Credit

9. Eligible Tuition Fees

If you attended school and have eligible tuition fees, you must file a tax return to claim the credits, even if you are not using them. You might not need to use the credits this year, but to carry forward or transfer them, they must be reported on your current year's tax return.

10. Non-Capital Loss 

 If you’ve incurred a capital loss, it’s important to report it on your income tax return so that you may use it on future tax returns.

Provincial & Territorial Benefits and Needs-Based Programs Must Know Your Income

There are provincial and territorial benefits along with federal benefits and there are income-tested programs and services across the country as well. If you don’t file your taxes, you will be forced to pay the maximum for any service because your eligibility for reduced fees depends on your verified level of income.

Do You Have To File Taxes In Canada If You Have No Income?

In a sense, you may be right. You technically don’t have to file your income taxes if you have no income to claim, but only if other circumstances don’t apply. Even if you haven’t earned any income, there are still many reasons why you may need to file your taxes.

Here are some scenarios that would require you to file your taxes even if you didn’t earn any income from employment.

  • You have taxes owing.
  • You paid employment insurance premiums on self-employment earnings.
  • You made contributions to the Canada Pension Plan (CPP)
  • You received a request to file a tax return from the Canada Revenue Agency (CRA)
  • You received Canada’s Worker Benefit (CWB) payments.
  • You sold off real estate or investment shares, particularly if you made a profit from such sales.
  • Your old age security or employment insurance benefits had to be sold off.
  • You still have some amount of your RRSPs to repay if you used it for things such as the Home Buyers’ Plan.
  • You and your spouse/partner are splitting your pension income.

As you can see, there are many scenarios where you would still be responsible for filing a tax return, even if you are not currently working and bringing in a typical income.

How Do I File a Nil Tax Return in Canada?

The most convenient way to file your nil corporate tax return is to hire a tax accountant in Toronto who will do it for you. That is not only the most straightforward way but the safest, because your accountant knows what information is required and can prepare all documents correctly.

Can You Get A Tax Refund If You Have No Income?

If you’re an adult Canadian, you should file a tax return every year. Even if you have no income. You could get money back (a tax return) from the CRA because of the large list of tax credits available. Filing your tax return will make you eligible for certain tax credits that you wouldn’t be able to get unless you file.

Think about that for a minute! Although dealing with taxes can be a real drag, it's probably worth it if you wind up with a much fatter wallet in the end.

If you want to take advantage of any one of the above benefits, filing a tax return will need to be done, regardless of whether or not you are working and bringing in an income. As a general rule of thumb, consider filing your taxes, no matter what your employment status may be.

Depending on the complexity of your tax return you could file them yourself or consult with a tax accountant. Often there are many ways we can earn a higher tax return amount that we aren’t aware of and an accountant can help you with that. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

Written By:
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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