Transcript

CVITP – Newcomers case study webinar

Slide 1

Hello and welcome to the Newcomers, case study webinar. Today we’re focusing on a case study for the Community Volunteer Income Tax Program.

The webinar will show volunteers how to file a tax return for a newcomer with a work permit and a spouse living abroad.

If you want to follow along, you can find this case study, and others, in the CVITP learning guide at Canada.ca/CVITP-learning-guide.

Slide 2

By the end of this webinar, you’ll have a better understanding of how to prepare a newcomer’s tax return and how to enter the information into the UFile CVITP software.

Slide 3

Before we begin, here are some key points to consider when preparing tax returns for newcomers who may have a spouse living abroad.

It’s important to understand that the term newcomer only applies to an individual for the first tax year in which they live in Canada.

The date of entry, or the date a newcomer arrived in Canada is also important.

You need to know that a spouse living outside of Canada, also referred to as a non-resident spouse, doesn’t need to submit a tax return. However, we need their name and net income for a newcomer’s tax return.

And lastly, you need to confirm the newcomer’s income earned outside of Canada, while they were not a resident of Canada.

For more information, we recommend you review the topic, “What to consider for newcomers,” under the Tax considerations for specific situations from the CVITP learning guide.

Now, let’s take a closer look at our case study.

Slide 4

The identification information includes the newcomer’s name, Mr. Martin Dubois, his identification number, which in this case is a social insurance number, his address, date of birth, and marital status.

We also have his spouse’s name and date of birth.

More information on the possible identification numbers a newcomer may have can be found in “What to consider for newcomers” in the CVITP learning guide.

Slide 5

Here’s the situation:

Mr. Martin Dubois immigrated to Canada from France on February 1, 2023.

He’s not a Canadian citizen but has a valid work permit.

After he arrived in Canada, he worked two jobs.

In 2023, Martin earned the equivalent of 5,000 Canadian dollars when he was employed outside of Canada. Martin’s wife, Simonne, still lives in France.

Simonne’s net income in 2023 was equivalent to 2,800 Canadian dollars, which she earned as a grocery store employee in France.

Martin and Simonne do not own foreign property.

Slide 6

Martin provided two T4 tax slips for both jobs he worked when he arrived in Canada. We’ll use the information on these slips to prepare his tax return in the UFile CVITP software.

Copies of the tax slips and all background information are in the CVITP learning guide.

Slide 7

Let’s start with the identification page. Make sure the individual’s information is entered correctly. If the name or date of birth do not match what the CRA has on record, you will not be able to EFILE the tax return.

At the bottom of this page, enter Martin’s province of residence and select married as his marital status. Martin and Simonne are still considered married even though they are living apart.

Slide 8

The next page is the Spouse interview type. Since Simonne still lives in France, she does not need to submit a Canadian tax return.

For this case study, select “net income only.” The CRA needs this information to calculate the benefits and credits for Martin while he is living in Canada.

Slide 9

The software will then ask for the spouse’s basic information. Enter Simonne’s name and date of birth. Leave the social insurance number field blank because she doesn’t have one.

Select No for, “Was your spouse a Canadian resident in 2023?” and, “Was your spouse an immigrant in 2023?”

Then, enter Simonne’s net world income of 2,800 Canadian dollars.

Slide 10

Next is the current address page.

The address entered needs to match the individual’s current home or mailing address.

This information will update the address CRA has on record.

Slide 11

The following page is the Canada Revenue Agency page.

Select Martin’s preferred language. This will allow Martin to receive future communications from the CRA in the language of his choice.

Select yes for the question, “Are you filing an income tax return with the CRA for the very first time?”

For the three questions that follow, select no.

Since Martin is not a Canadian citizen, select no for the question, “Do you have Canadian citizenship?”

Slide 12

Scroll down on the same page and fill in all mandatory fields.

At the bottom, there is a section on email notifications from the CRA. Leave the email address field blank.

If an email address is provided, CRA correspondence will be sent electronically through My Account. Newcomers typically don’t have My Account because it's their first time filing. Adding an email address could risk them missing important mail from the CRA.

So, for Martin, we’ll select no to the statement, “I accept the terms and conditions and I choose to receive email notifications from the CRA.”

Slide 13

Next is the EFILE page. For this case study, select no to the question, “Will you be using the CRA Auto-fill my return service for this taxpayer?”

Answer Yes for the question, “Will you be using EFILE to submit this return to the CRA?”

More information on CRA’s Auto-fill my return and EFILE services can be found in the CVITP learning guide, under the “CRA electronic services” section.

Let’s move to the Interview setup page.

Slide 14

The Interview setup identifies the topics related to the individual’s tax situation.

For this case study, tick the box next to “Immigrant, emigrant, non-resident taxpayer” within the specific situations section.

Since Martin has employment income, tick the box next to “Employment income and employment insurance benefits.”

None of the other pre-selected boxes apply to this case. Untick preselected topics on the interview page that you don’t need to make it easier to navigate the software.

Slide 15

The next page is the immigrant, emigrant or non-resident page. Click the plus sign next to the statement, “You immigrated to Canada in 2023,” to generate the, “Immigration to Canada” page.

Slide 16

This is where you enter Martin’s date of entry as February 1, 2023.

Leave the field blank for your net income while you were living in Canada with your spouse, since Martin hasn’t lived with Simonne in Canada.

Although no Canadian sourced income was earned while he resided outside of Canada, you still need to select, “Income from employment in Canada,” from the drop-down menu and enter a value of $0.00.

Enter the name of country, France, under the section “Canadian source part XIII income plus foreign sourced income earned when you were not a resident of Canada.”

Select “Net employment income” from the drop-down menu, since Martin earned employment income in France.

Enter the income amount, $5,000, that he earned while he resided outside of Canada. This income isn’t taxed in Canada. It’s only used to determine how the non-refundable tax credits will be calculated.

Slide 17

Next, on the T4 and employment income page, click the plus sign next to “T4 income.” This will generate the page, “T4 – Statement of Remuneration Paid”.

Slide 18

Let’s start with the T4 tax slip Martin received from Pete’s Market.

Enter the information from the tax slip into the corresponding fields.

For example, enter the employer’s name, Pete’s Market, $6,600 from box 14 into the employment income field and select Ontario as the province of employment.

Review every box from the T4 slip and enter the information into the matching field.

When you’re done, return to the T4 and employment income page by clicking it in the left-side menu.

Slide 19

Click on the plus sign next to, “T4 income,” to add the second T4 tax slip from Janitor’s Inc.

Slide 20

Just as you did earlier, enter the information from the second T4 tax slip into the matching UFile fields.

This concludes Martin’s interview.

Now, let’s look at the tab 3, Review, to see how the information entered affects the results.

Slide 21

Click the “Review” tab for a summary of the final calculation of Martin’s tax return. In this case, he receives a refund.

You should also read the messages at the bottom of the screen where any errors, warnings or tips are displayed.

Now let’s click tab “4, Tax return.”

Slide 22

Here, you can view a detailed summary of Martin’s tax return, as well as the schedules and forms that the software completed with the information you provided during the interview.

Click the tax return summary in the left-side menu.

Slide 23

You’ll notice that Martin’s income earned before he immigrated to Canada is not included in the tax calculation. However, it’s used to calculate certain credits and benefits.

You may also notice that some tax credits are calculated based on the number of days he spent as a resident of Canada. An example of this is the amount claimed on line 30000.

Slide 24

If you click on “World income” in the left-side menu, you‘ll see the income Martin earned outside of Canada and the number of days he was a resident of Canada in 2023 .

Once you finish reviewing the tax return and confirm that the information was entered accurately, you can move to tab “5, EFILE.”

Slide 25

Since this is a case study, we can’t access the EFILE steps and screens. In the, “UFile overview,” available in the CVITP learning guide, you will find details on how to EFILE a tax return and an overview of the tax software used by CVITP volunteers.

A three-part video is also available. It provides an overview of the UFile software and its functionalities.

Slide 26

This is the end of the webinar. Thank you for joining us today! We hope you gained a better understanding of how to file a tax return for a newcomer.

If you need a refresher, today’s webinar and other videos are available on the CVITP learning guide’s video gallery .

Visit canada.ca/cvitp-learning-guide.

CVITP learning resources are for program participants. Please do not share them.