If you immigrated to Canada during the tax year, you need to report your foreign-source income for a specific reason. Here's what you need to know:
Why report foreign-source income:
- It determines if you meet the "90% rule"
- This rule affects your eligibility for full Canadian tax credits
The 90% rule:
You meet this rule if, before moving to Canada:
- You didn't earn any foreign-source income, OR
- 90% or more of your income was from Canadian sources
Implications:
- Meeting the 90% rule: You can claim full Canadian tax credits
- Not meeting the 90% rule: Several credits will be pro-rated based on your date of entry
Important notes:
- Only report foreign-source income earned before immigrating to Canada
- This reporting doesn't mean you'll be taxed on this income in Canada
- It's used solely to determine your eligibility for full tax credits
How to report:
- Include all foreign-source income earned before your move to Canada
- Wealthsimple Tax will use this information to calculate your credit eligibility
Remember:
- Accurate reporting ensures you receive all credits you're entitled to
- Keep records of all income, both foreign and Canadian
For more detailed information on filing your first tax return in Canada, visit the CRA's guide for newcomers.
If you have questions about reporting foreign-source income as a newcomer, consider consulting with a tax expert. For assistance entering this information in Wealthsimple Tax, please contact Wealthsimple support.
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