A nonresident of Canada who has earned income from Canada is subject to Canadian income tax requirements. Nonresidents who are required to file a Canadian T1 return will report the income subject to these requirements, and claim available tax credits and deductions.
- Recipients of many types of passive Canadian-sourced income pay a withholding tax and don't file a Canadian tax return.
- Nonresident recipients of rental, acting, or pension income may be able to elect to file a return and pay tax on taxable income instead of paying the withholding tax on gross income.
- A nonresident recipient of Old Age Security income may be required to file a special return.
The T1 return for a nonresident will generally take one of two forms:
- A T1 Income Tax and Benefit Return for the province in which the income was earned (if it's only income from employment, a business with a permanent establishment in Canada, income from a scholastic source, or a gain from a sale of Canadian real estate, or if the nonresident immigrated or emigrated during the year), or
- A T1 Income Tax and Benefit Return for Nonresidents and Deemed Residents of Canada if there's only income from a scholastic source, a gain on Canadian real estate, nonemployment services provided not from a permanent establishment, or if electing on pension income as already described.
