Key Terms & FAQ

If you are new to Canada or filing for the first time, the Canadian tax system can feel like a different language. At EZ Income Tax, we want to make sure you understand the basics.

1. Important Vocabulary

• CRA (Canada Revenue Agency): The government department that manages taxes. Think of them as the "tax police" and the "benefit payers."

• T1 General: This is your actual tax return document. Always keep a copy (PDF or paper) for your records.

• NOA (Notice of Assessment): The official "receipt" the CRA sends you after they process your return. It tells you if you owe money or get a refund.

• Tax Slips: Official documents (T4, T4A, T5, etc.) sent by employers or banks showing how much you earned.

• Non-Refundable Tax Credits: These credits reduce the tax you owe. If you owe $0 in tax, these credits cannot be turned into cash; they simply stay at $0.

• CRA My Account: Your personal online portal. Note: You can usually only register after your first return is processed.

2. Common Questions & Scenarios

• "I have no income, do I still file?" Yes! Filing tells the CRA you are a low-income resident, which triggers Benefits like the GST/HST credit and the Carbon Tax Rebate.

• Refund vs. Benefit: A Refund is a one-time payment of tax you overpaid. Benefits are ongoing payments (monthly/quarterly) from the government to help with living costs.

• World Income: If you moved to Canada part-way through the year, the CRA will ask for your income earned before you arrived. They don't tax it, but they use it to see if you are "low income" enough to get benefits.

• Late Filing: If you owe money, filing after April 30th results in a 5% penalty plus 1% interest per month. If the CRA owes you a refund, there is no penalty, but your monthly benefits might be paused.