Are you getting ready to file your Canadian tax return and wondering if you can receive a tax refund if you owe taxes to the CRA?
In this article we will explore some Canadian tax rules and how you can offset your tax refund against any outstanding tax payments to the CRA, helping to reduce or eliminate your tax bill.
Find out how to check your tax refund in Canada!
Am I a resident or non-resident for tax purposes?
It is important to understand the difference between a resident and a non-resident for tax purposes in Canada as this will affect the amount of tax you pay.
For tax purposes, you are considered a non-resident of Canada if:
- You stayed less than 183 days in Canada throughout the tax year
- You normally or routinely live in another country and you are not a Canadian citizen
- You do not have significant residential ties in Canada
You are generally considered a resident for tax purposes if Canada is where you regularly, normally or customarily live and you hold significant residential ties.
What are examples of significant residential ties?
- Dependents in Canada
- A home in Canada
- A spouse or common-law partner in Canada
More information to determine your residency status here.
What is the 90% rule?
The basic personal tax-free allowance for 2024 is $15,705. To be eligible to claim this tax-free allowance, you must have earned at least 90% of your total income in the tax year in Canada.
If you earned over 10% of your net income outside of Canada, you will not be eligible for the tax-free allowance.
How do taxes work in Canada?
Canada has a progressive tax system. This means that the amount of money you make determines how much tax you will pay.
In Canada, you pay both federal and provincial tax on your earnings. Federal tax rates range from 15% to 33%.
The Federal tax rates for the 2024 tax year are:
| Income Bracket | Federal Tax Rate |
|---|---|
| On the first $57,375 of taxable income | 15% |
| From $57,375 up to $114,750 | 20.5% |
| From $114,750 up to $177,882 | 26% |
| From $177,882 up to $253,414 | 29% |
| Over $253,414 | 33% |
As previously mentioned, the basic personal tax-free allowance for 2024 is $15,705 – increased from $15,000 in 2023.
Learn more about the 2024 provincial tax rates.
Am I eligible for a tax refund?
Eligibility for a CRA tax refund depends on various personal factors such as income, tax residency status, tax credits and deductions and many other factors.
When determining your tax residency status, think of the 183-day rule. If you have spent 183 or more days in Canada you are deemed a resident for tax purposes.
And if you have spent less than 183 days in Canada, don’t have significant residential ties there, and you’re not a Canadian citizen, you are considered a non-resident for tax purposes.
Find out how to file a Canadian non-resident tax return and claim a tax refund and more information on determining your residency status.
Ready to claim a tax refund from Canada?
Why do I need to file a Canadian tax return?
It is important to file your Canadian tax return to ensure that you are compliant with the Canada Revenue Agency (CRA). If you do not file your taxes by the income tax return filing deadline, the CRA could impose penalties or fines.
If you don’t file your tax return, you could be leaving your money with the CRA.
Our average Canadian tax refund is $998, so it is worth checking what you are owed!
Can the Canada Revenue Agency withhold my tax refund?
If you owe taxes to the Canadian government, the CRA may keep all or part of your refund that you are due and offset it against your tax refund.
Therefore, if you owe the CRA $800 and you are due a tax refund of $1,000, the total you will receive will be the remaining balance which, in this instance, is $200.
By applying for a tax rebate with a tax agent like Taxback, we will ensure you get your maximum tax refund and claim every relief you are entitled to, helping to increase your tax refund and reduce any outstanding payments to the CRA.
How can I check my tax refund status in Canada?
If you apply with Taxback you can check your Canadian tax refund status by logging into your Tax Tracker account where we will keep you updated each step of the way.
You can check your tax refund status by logging in on the CRA website for updates on your income tax refund status. The CRA advise that you wait 8 weeks before contacting them for an update on your tax return.
Why is my tax refund delayed?
There may be many reasons why your tax refund may be delayed.
Firstly, the delay could be caused by incorrect personal details, such as your address etc. which may slow down the process of receiving your tax refund.
If you filed your tax return after the tax deadline on 30 April this could also lead to a delay in receiving your refund.
If you file under the wrong tax residency status this will also be a factor that will delay your refund getting to your bank account. It is important when filing your tax return to include all of the correct information and this will help to ensure the CRA process your documents as efficiently as possible.
It is best to file your tax return as early as possible before the tax deadline, this can help to reduce the time you have to wait to receive your tax refund, and you will avoid any penalties or fees imposed by the CRA for filing after the deadline.
Depending on what way you signed up to receive your tax refund, this could increase the time you are waiting to receive it. For instance, if your refund is being deposited directly into your bank account this is typically a quicker process than paper cheques.
How do I calculate my tax refund?
It is possible to approximately calculate your income tax refund yourself.
To do this you must determine how much income you earned if you’re entitled to the Canadian tax-free allowance, the rate of Canadian income tax that you pay, and any tax deductions you are entitled to in Canada.
This can be a daunting and time-consuming process.
A fast and easy way to calculate your tax refund is by using Taxback’s free tax refund calculator which will instantly estimate your tax refund allowing you to find out how much Canadian tax you’re owed.
Learn more here about calculating your Canadian tax refund and expenses you may be entitled to.
Does everyone get a tax refund in Canada?
Many people earning income in Canada will be entitled to a tax refund. If you overpaid taxes to the CRA throughout the year, you will receive a refund of the excess money paid.
The amount of tax due back varies from person to person depending on income earned in Canada, tax credits, tax paid throughout the tax year, and other personal circumstances.
How much tax refund will I get in Canada?
How long does it take to get a tax refund?
A commonly asked question is “how long after notice of assessment do you get a tax refund?”
A notice of assessment (NOA), is provided by the Canada Revenue Agency and it contains details of how much your income tax refund will be or how much tax you owe.
NOA’s and tax refunds are typically sent out one to two weeks after your tax return has been filed online. This can take up to eight weeks if you file your tax return by mail.
Non-resident tax returns for those living outside of Canada can take up to 16 weeks.
Ready to claim a tax refund from Canada?
Need help filing your Canadian tax return?
At Taxback we understand that tax filing can be daunting and stressful.
We can file your tax return or student tax return, and even better news our average Canadian tax refund is $998!
All you have to do is simply fill out our short application form and we will handle everything from there, ensuring you receive your maximum tax refund.
Why choose Taxback?
- Guaranteed maximum tax refund, our average Canadian tax refund is $998
- Remain compliant with the CRA, avoiding any penalties or fines
Last Updated on February 11, 2025
