Who Needs to File a Tax Return in Canada?

Understanding whether you need to file a tax return in Canada can be confusing, especially if your income is low or irregular. Many people assume that if they don’t owe money to the government, they can simply skip tax season. However, skipping your return could mean missing out on hundreds or even thousands of dollars in benefit payments designed to support low-income households.

This guide simplifies the rules from the Canada Revenue Agency (CRA) to help you decide if you need to file this year.

Do You Have to File a Tax Return?

The CRA has specific rules regarding who must file a return versus who should file a return. Even if you aren’t legally required to file because you earned very little, doing so is often the only way to access valuable government benefits.

Cases Where You Must File a Tax Return

You are legally required to file a tax return in Canada if any of the following situations apply to you for the tax year:

You owe tax: If you earned enough income that you owe money to the CRA.
The CRA asked you to: You received a formal “Request to File” notice from the CRA.
You have self-employment income: You earned self-employment income that must be reported, or you are required to pay CPP contributions on self-employment earnings over $3,500.
You used the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP): You have an outstanding balance that must be repaid.
You sold property: You disposed of capital property, such as real estate or investments, or realized a taxable capital gain.

When Filing a Tax Return Is Recommended

For most low-income Canadians, this category is even more important than the “must” category. You should voluntarily file a tax return in Canada if:

You want a refund: If income tax was deducted from your paycheque, filing is the only way to get that money back.
You want benefit payments: Filing allows the CRA to calculate and issue benefits such as the GST/HST Credit, the Canada Carbon Rebate (formerly Climate Action Incentive Payment), and the Canada Child Benefit (CCB).
You want to claim refundable tax credits: Programs like the Canada Workers Benefit (CWB) put money directly into the hands of low-income workers.

Why Low-Income Earners Should Always File

A common myth is that filing taxes is only for people with high incomes or complex finances. In reality, the Canadian tax system is designed to support low-income individuals and families.

By filing a tax return in Canada, you unlock access to key programs.

1. GST/HST Credit

This is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset the GST or HST they pay. There is no separate application — filing your tax return automatically enrolls you.

2. Canada Child Benefit (CCB)

If you have children under 18, this benefit is critical. The CCB is a tax-free monthly payment that helps with the cost of raising children. If you stop filing your tax return, the CRA may suspend your payments because they can no longer assess your eligibility.

3. Canada Workers Benefit (CWB)

The CWB is a refundable tax credit for individuals and families who earn a low income from employment or self-employment. It can significantly increase your annual income and is claimed directly on your tax return.

4. Provincial and Territorial Credits

Many provinces offer additional benefits — such as the Ontario Trillium Benefit or the Alberta Child and Family Benefit — which are calculated automatically based on your federal tax return.

Common Scenarios: Do I Need to File?

Scenario A: The Student

Situation: You are a full-time student who worked part-time during the year and earned $4,000. Verdict: You should file. Your income is below the basic personal amount, so you likely won’t owe tax. However, you may receive a refund for taxes deducted and begin accumulating tuition credits for future years.

Scenario B: The Senior with No Income

Situation: You are retired and your only income is Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). Verdict: You must file. The CRA reassesses GIS eligibility annually based on your tax return. If you do not file, your GIS payments may stop.

Scenario C: The Newcomer

Situation: You moved to Canada in December and had no Canadian income during the year. Verdict: You should file. Filing establishes your residency for tax purposes and allows you to become eligible for benefits such as the GST/HST Credit in future periods.

How to File Your Return for Free

Cost should never be a barrier for low-income filers. The CRA offers several free options.

Community Volunteer Income Tax Program (CVITP)

If you have a modest income and a simple tax situation, trained volunteers can prepare your tax return for free.

Eligibility: Generally for individuals earning under $35,000 or families earning under $45,000 (limits may vary by region and tax year). How to find one: Search for “CVITP clinics” on the Canada.ca website.

Certified Free Software

Several NETFILE-certified tax software options are available at no cost or on a pay-what-you-want basis. Popular options include Wealthsimple Tax and CloudTax. These tools guide you step by step and automatically calculate your taxes.

File by Phone (SimpleFile by Phone)

Some low-income or fixed-income individuals receive an invitation from the CRA to file by phone. This automated service takes only a few minutes and is one of the easiest ways to file if you qualify.

Checklist: What You Need Before You Start

Before filing your tax return in Canada, gather the following:

Identification: Social Insurance Number (SIN) and date of birth.
Income slips:
- T4 (employment income)
- T5007 (social assistance or workers’ compensation)
- T4A(OAS) and T4A(P) (Old Age Security and CPP)
- T4E (Employment Insurance)
Receipts:
- Rent receipts (for provincial credits)
- Medical expenses
- Childcare expenses
- Tuition slips (T2202)

Don’t Wait Until the Last Minute

The tax filing deadline is usually April 30. If you owe tax and file late, penalties and interest apply. If you do not owe tax, there is no penalty for filing late, but benefit payments may be delayed.

For low-income households, steady cash flow matters. Filing early ensures your benefits continue without interruption and any refund reaches you sooner.

Conclusion

The answer to “Who needs to file a tax return in Canada?” is simple: almost everyone benefits from filing. While the law requires it for those who owe tax, the system actively rewards low-income filers through credits and benefit payments.

Don’t leave money on the table. Gather your documents, use a free filing option, and submit your return. Filing your taxes is one of the most effective financial steps you can take to support your household budget.