Which Tax deductions in Canada am I eligible for?

Question

Hello,

I am from India and I came in Ottawa,Canada on 1 January 2008 and my last working day in Canada is 30 June 2008. I wanted to know for which Tax deductions I am eligible in Canada. To this effect I have done some research myself.

1. I am Non-resident Canadian for financial year 2008 since I am living for less than 183 days in Canada.

2. I can claim Federal and Ontario Standard deduction amount which are around $9000 approx.

3. Since I am working here for only SIX months my annual income does not go beyond 35000$ approx which is the limit of first slab of taxes for Federal and Ontario state.

4. Right now my employer is deducting maximum tax possible at source considering my maximum income for whole year.

5. I came to know that I can claim CPP(Canada Pension Plan) back since I am non-resident for 2008 financial year.

Apart from this is there anything else for which I can claim deductions?

Thanks,

Abhijit

Answer 1

If you are not an immigrant. You do not have an social insurance number and you do not need one. Your employor cannot deduct any taxes from you because he has no way to report taxes to the Canadian government. Your employer should treat you like a worker in India and pay you in full without any deduction. Technically,you are not allow working in Canada if you are not an immigrant. Therefore,either you were cheated by your so call employer or because  you  status is  an illegal worker in Canada.

Answer 2

At the end of 2008 (actually any time before April 30), you will file a Canadian income tax return.  At that point, excess tax paid will be refunded.  You are correct that you are being charged a higher than necessary tax rate, but there is nothing to be done about that at this point.  If you knew you were only working until June 30, you could have filed an application to lower your withholdings, but it's not retroactive.  As I say, it wil be refunded in 2009.

You will not be reimbursed for CPP or EI deductions made.

Answer 3

Canada's income tax system is based on residency. If, as you say in your first point, you are a non resident of canada, then you may not be allowed to claim any portion of the Federal and Ontario standard deductions you refer to in point two.

When you enter or leave Canada during the year, the amount for the basic exemptions are prorated based on the number of days you are a resident of Canada.

It would be to your advantage to contact the International Tax Services Office of the CRA and ask your question of themn directly. Phone [phone].