No Income: Do You Still Need To File Your Taxes?

There are many reasons why some Canadians might not have had an income last year. Stay-at-home parents, job loss, and injury are just a few of the potential scenarios that prevent people from earning an income. But the question, is if you're one of these Canadians, does that mean you get to skip filing your taxes this year? Interestingly enough, the answer isn't a simple yes or no. Most people in Canada will have to file a tax return, even if they made no income. However, to make it easy for you, here is a list from the government, specifying when you have to file your taxes.

• You have to pay tax for 2017.
• We sent you a request to file a return.
• You and your spouse or common-law partner elected to split pension income for 2017.
• You received working income tax benefit advance payments in 2017.
• You disposed of capital property in 2017 (for example, if you sold real estate, your principal residence, or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed income to you, or you are reporting a capital gains reserve you claimed on your 2016 return).
• You have to repay any of your old age security or employment insurance benefits.
• You have not repaid all amounts withdrawn from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan.
• You have to contribute to the Canada Pension Plan (CPP). This can apply if for 2017 the total of your net self-employment income and pensionable employment income is more than $3,500.
• You are paying employment insurance premiums on self-employment and other eligible earnings.

If none of these requirements apply, you should still file a return if:

• You want to claim a refund.
• You want to claim the working income tax benefit for 2017.
• You want the goods and services tax/harmonized sales tax (GST/HST) credit (including any related provincial credits). For example, you may be eligible if you turn 19 before April 2019.
• You or your spouse or common-law partner want to begin or continue receiving Canada child benefit payments, including related provincial or territorial benefit payments.
• You have incurred a non-capital loss in 2017 that you want to be able to apply in other years.
• You want to transfer or carry forward to a future year the unused part of your tuition. You want to report income for which you could contribute to an RRSP and/or a pooled registered pension plan (PRPP) to keep your RRSP/PRPP deduction limit for future years current.
• You want to carry forward the unused investment tax credit on expenditures you incurred during the current year
• You receive the guaranteed income supplement or allowance benefits under the old age security program. You can usually renew your benefit by filing your return by April 30. If you choose not to file a return, you will have to complete a renewal form.

As you can see, there probably aren't a lot of Canadians who don't fit these criteria. In other words, you probably have to file your taxes this year.

Consider the benefits

Even if you'd rather not file your taxes, consider all the tax benefits in that list. With zero income, you can also still cash in on tax breaks and credits. For instance, the child tax benefit is available for most Canadian parents regardless of employment status. That's a significant amount of money each month that could make a real difference to your finances.

You can also claim things like medical expenses, educational expenses, and child care expenses. The more expenses you can write off, the greater chance you'll get a refund. Or, if you're out of work due to a disability, there are also disability deductions and credits that earn you some cold, hard cash.

It's easier to file!

Think about it this way: with no income, filing your taxes is going to be much easier to actually complete. While everyone else is toiling over their T4s, you just have to enter a big zero and be done with it.

Bottom line, even though it's a pain in the neck, your best bet is to file so you can reap the rewards.

Hopefully you'll walk away from tax time with a nice refund. Will you do the smart thing with that extra cash? Here are some suggestions to make the best use of your tax refund. 

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