Do you live in northern Canada? Find out about northern residents deductions!
CRA SOURCE ARTICLE
If you lived in one or more prescribed zones for a continuous period of at least six consecutive months beginning or ending in the tax year, you may be eligible to claim the northern residents deductions on your income tax and benefit return. The northern residents deductions consist of a residency deduction and a travel deduction. If you are eligible, these deductions reduce the amount of income you pay tax on, so they will reduce your overall income tax debt.
Filing and payment deadline
It’s important that you know that the deadline for most Canadians to file their income tax and benefit return is April 30, 2022. Filing your return on time helps make sure you receive any refund, benefits or credits you may be entitled to.
Since April 30, 2022, falls on a Saturday, your return will be considered filed on time if either:
we receive it on or before May 2, 2022
it’s postmarked on or before May 2, 2022
If you have a balance owing, your payment is due on April 30, 2022.
You have until June 15, 2022, to file your tax return if you or your spouse or common law-partner are self-employed. However, your payment is due on April 30, 2022.
Since April 30, 2022, falls on a Saturday, in both of the above situations, your payment will be considered paid on time if we receive it, or it is processed at a Canadian financial institution, on or before May 2, 2022.
What are the northern residents deductions on your 2021 income tax and benefit return?
There are two northern residents deductions:
a residency deduction for having lived in a prescribed northern or intermediate zone
a travel deduction
Eligible individuals living in a prescribed northern zone can claim the full amount of these deductions, and those living in a prescribed intermediate zone can claim 50% of these deductions.
What’s new for the travel deduction?
The government has proposed changes to the travel deduction. Under these proposed changes, the travel deduction will be expanded and be available to eligible northern residents for a personal trip taken by them or an eligible family member, even if no taxable travel benefit was received for that trip. For more information, see Information Sheet RC4650, Northern Residents Deductions for 2021 or Form T2222, Northern Residents Deductions for 2021.
How to claim northern residents deductions
If eligible, you can calculate your claim for the northern residents deductions using Form T2222, Northern Residents Deductions for 2021. If you live in a remote area located in the province of Québec, you can also claim related provincial deductions with form TP-350.1-V.
Keep receipts and documents
You should keep all your receipts and documents for at least six years starting from the end of the taxation year to which they relate, or if your income tax and benefit return is filed late, for six years after the day you file the return. In general, if you are an individual (not self-employed) and file your 2021 tax return on time, you are required to keep your receipts and documents that relate to the 2021 taxation year until at least the end of 2027.
Sometimes we review returns to make sure that income, deductions, and credits are properly reported. If you have to support your claims, having your receipts and records on hand will make it easier.
Other financial help for you and your family
Several benefits and credits are available to help you and your family. These include the Canada child benefit, the child disability benefit, the goods and services tax / harmonized sales tax credit, the Disability tax credit, and the Canada workers benefit.
It is important that you complete and file your return on time every year, even if you had no income. After you file your taxes, the Canada Revenue Agency (CRA) uses the information from your return to calculate benefits and credit payments, as well as any related provincial and territorial payments.
Electronic services that help you file
If you choose to file online on your own, there are a variety of NETFILE-certified software products to meet your needs, some of which are free.
Free tax help
Community Volunteer Income Tax Program
If you need help to file, the Community Volunteer Income Tax Program and participating organizations are hosting free virtual tax clinics for Canadians with a modest income and a simple tax situation. Volunteers may be able to complete and file your return for free, by videoconference, by phone, through a document drop-off arrangement, or in person.
Northern Service Centres
You may also be able to get help from the CRA’s Northern Service Centres. Due to COVID-19, these centres have suspended in-person service, but over the phone, a CRA officer can:
answer your questions about benefits and credits
help guide you through CRA’s various tools and digital services
help you respond to letters from the CRA
answer your small business tax-related questions
provide recommendations on how you can strengthen your bookkeeping systems
If you have tax questions related to living in the north, and your phone number starts with an 867 area code, you can call 1-866-426-1527 and talk with a CRA officer who understands northern tax matters.
Liaison Officer Service
The Liaison Officer service is a free service offered by the CRA to owners of small businesses and self-employed individuals to help them understand their business tax obligations. A visit from a Liaison Officer is 100% confidential; the information you choose to discuss with a Liaison Officer will not be shared with other areas of the CRA, or anyone else.
There are two ways that businesses or self-employed individuals can use the Liaison Officer service:
personalized visits by phone or online (videoconference)
webinars for associations or groups
You can book a free virtual visit with the CRA’s Liaison Officer service by using our online request form.
Other information you may find helpful
The CRA encourages you to sign up for direct deposit to get any refund faster and avoid delays. Don’t forget to sign up for My Account, the fastest and easiest way to view and manage your tax and benefit information. The CRA’s Get Ready page has information about online filing, deadlines, and helpful links.
You can learn more about taxes and filing by visiting the links above or by scheduling a free consultation with us.