How to File an International Student Tax Return in Canada and the USA
If you live in Canada or the United States, April is tax season. International students likely have a lot of questions when it comes to taxes and whether they need to file a return. The short answer? YES. It is important to know your tax status if are an international student in Canada or the USA. What makes things a bit confusing is the different tax systems in both countries.
Today, we’re going to break down what you need to know in order to correctly file an international student tax return in Canada or the USA. However, this is just an overview of the basics. We recommend every student visit the Canada Revenue Agency (CRA) or Internal Revenue Service (IRS) website for official information.
If you are an international student in Canada, you must first know your residency status before filing taxes. According to the Government of Canada website, international students fall into one of the following types of residents:
Residency status is based on your residential ties with Canada. Residential ties can vary but the most important ones include:
- A home in Canada
- A spouse or common-law partner or dependants who live in Canada with you
- Social ties in Canada
- A Canadian driver’s licence
- Canadian bank accounts or credit cards
- Health insurance with a Canadian province or territory
Many international students who study in Canada will have residential ties. However, you may not have these ties if you:
- Return to your home country for a significant amount of time in a calendar year
- Move to another country when not attending university or college in Canada
Figuring out your residency status can be a little confusing but is important to know for filing taxes. For more information, we recommend reading through the Government of Canada’s guide on determining residency status. If you’re still unsure, you can fill out this form to have the CRA make a decision.
How do I file an international student tax return in Canada?
In Canada, you can file taxes online or by mail. In general, if you receive income from a Canadian source, you most likely need to file taxes. Even if you did not receive income in the previous year, it’s still a good idea to file a return to see if you qualify for tax credits such as the goods and services tax/harmonized sales tax (GST/HST) credit.
Since many students have modest incomes, they may also be eligible to use the Community Volunteer Income Tax Program. This free service hosts tax clinics where volunteers do tax returns for people who qualify.
When do I need to file by?
The deadline to file your 2018 tax return is April 30, 2019. You can still file after this date but you may have to pay a late penalty if you owe money to the CRA. The easiest way to file your taxes is electronically using certified tax software, some of which are free of charge.
In the United States
Filing taxes in the USA works a bit differently than in Canada. Every international student must file a tax return as a condition of their visa. However, you are also entitled a number of benefits and exemptions. For this reason, most international students likely won’t owe any money and may even receive a refund.
What do I need to file taxes?
Before you can file taxes, you will need an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN). If you don’t have one, you can still file taxes but will need to submit a W-7 form alongside your return. Additional forms may be required depending on the source of your U.S. income. InternationalStudent.com has a great tax return guide if you’re unsure of which forms to submit.
What is US source income?
US source income is any wages earned from a job in the United States. However, scholarship money and interest earned on money in an American bank account also qualify. A full list of income sources can be found on the IRA website.
When do I need to file by?
In the United States, you must file your tax return on or before April 15th. Every international student needs to submit Form 8843. If you’ve received income in the last calendar year, you may also need to submit Form 1040NR-EZ. These forms can be submitted online or by mail.
How do I file my return?
Unfortunately, the IRS does not allow electronic filing for nonresidents. This means all international students need to submit their tax return by mail. Your return must be mailed to this address:
Internal Revenue Service Center, Austin, TX 73301-0215, U.S.A.
The good news is there is no cost to filing your taxes with the IRS. You will only be charged if you use a service, like Sprintax, or a certified accountant.