If you are a resident of Canada, you have to report your income from all sources, both inside and outside Canada, on your Canadian income tax return. The most common sources of income are from employment, scholarships, fellowships, bursaries, and interest on money deposited in the bank. The sum of these will determine your total income. Part-time scholarship recipients of $500.00 or more will be counted as income and be taxable.
To reduce the income subject to tax, you may be entitled to deduct the amount you paid into pension plans, registered retirement savings plans (RRSP), union and professional dues and child care expenses. There are some other less common deductions that are listed in the tax forms, such as moving expenses. The costs you incurred when moving to Canada may be claimed against certain income. Be sure to keep your receipts for airline tickets and other expenses. Subtracting your deductions from your total income gives you your taxable income. The taxable income is the amount on which your federal and provincial taxes are calculated.
Public Transportation Receipts (i.e. U-Pass receipt, ETS Transit Monthly Pass) identify the amount you paid for public transportation. If you are a registered U-Pass user, please include your U-Pass receipt, you can print from Beartracks. If you buy an ETS Monthly Pass, please include all of your monthly bus passes, store receipts are not applicable.
Non-Refundable Tax Credits
You may be entitled to claim certain non-refundable tax credits in calculating the amount of tax you may owe. Non-refundable tax credits reduce your federal tax. If the total of these credits is more than the income tax you owe for the year, you will not get a refund for the difference.
If you are a newcomer to Canada, you may be limited in the amount you can claim for certain federal non-refundable tax credits. Your residency status may also affect your eligibility to claim other non-refundable tax credits otherwise available.
As an international student, you may be able to claim the Tuition, education and textbook amounts. These amounts allow students to reduce their income taxes by taking into account eligible fees paid for tuition, and the education amounts for full or part time attendance.
It is important to complete Schedule 11 of the General Income Tax and Benefit Package to ensure that any unused part of these amounts is either transferred to your spouse or common-law partner, or carried forward for you to claim in a future year.
The non-refundable tax credits are subtracted from the federal income tax to determine your net federal tax. Alberta tax is calculated as 10% of taxable income and is reduced by non-refundable credits in the same manner as federal tax. The rules for calculating your provincial non-refundable tax credits are similar to the rules used to calculate your corresponding federal non-refundable tax credits.
Refundable Tax Credits
These credits include the tax that has already been deducted from your earnings. The refundable tax credits are subtracted from the total tax payable to determine if you will receive a refund from Canada Revenue Agency or if you are required to pay additional taxes. Many students are entitled to a refund.