Filing Your Taxes When You Have No Income

Did you lose your job? Are you on maternity or paternity leave? Are you in-between jobs? Have decided to go back to school in order to further your career once you get back into the workforce? Or have you decided to take an extended sabbatical in order to refresh and take a breather from the everyday hustle and bustle of work-life?

Whatever your reason for not working, you may be wondering whether or not it’s still necessary to file a tax return. You might think there’s absolutely no reason to do so, especially since you did not make any money and therefore have nothing to pay income taxes on. In a sense, you may be right. You technically don’t have to file your income taxes if you have no income to claim, but only if other circumstances don’t apply.

Reasons You Must File Your Income Tax Even If You Have No Income

There are many some valid reasons to still consider filing your income taxes despite not having made any income in the previous calendar year. But before we list these reasons, here are some scenarios that would require you to file your income taxes in the next tax filing season:

You have taxes owing
You received a request to file a tax return from the Canada Revenue Agency (CRA)
You received Canada’s Worker Benefit (CWB) payments
You sold off real estate or investment shares, particularly if you made a profit from such sales
Your old age security or employment insurance benefits had to be sold off
You still have some amount of your RRSPs to repay if you used it for things such as the Home Buyers’ Plan
You made contributions to the Canada Pension Plan (CPP)
You paid employment insurance premiums on self-employment earnings
You and your spouse/partner are splitting your pension income

As you can see, there are many scenarios where you would still be responsible for filing a tax return, even if you are not currently working and bringing in a typical income.

File your taxes with TurboTax

Get Started

Benefits Of Filing Your Taxes Even If You Have No Income

Aside from the aforementioned reasons to file a tax return, there are many benefits that you can capitalize on by filing a tax return despite not having a job. Filing your tax return will make you eligible for certain tax credits that you wouldn’t be able to get unless you file. Here are some of the tax benefits that you can get if you file your tax return.

Canada Child Benefit (CCB)

It’s no secret that raising a child can be expensive. But if you file your taxes, you may be eligible for the CCB benefit. This benefit is a tax-free credit that is paid out each month. You could receive up to $563.75 per month for each child you have that is under 6 years old and $475.66 per month for each child between 6 and 17.

Check out these tax tips for low-income earners.

GST/HST Credit

The Goods and Services Tax or Harmonized Sales Tax Credit (GST/HST) is a tax-free payment for individuals and families with a low income. Individuals can receive up to $451, while families and couples can receive up to $592. If you have a child under 19, you can receive an additional $155 per child.

Ontario Trillium Benefit

Depending on the province you live in you may be eligible for other provincial tax credits such as the Ontario Trillium Benefit. This benefit includes 3 types of tax-free payments which are meant to help low-to-medium income families with energy costs as well as property and sales tax. The three benefits included are:

Northern Ontario Energy Credit
Ontario Energy and Property Tax Credit
Ontario Sales Tax Credit

School Credits

If you attended school, you may be able to claim your tuition fee for credit. However, it’s important to claim the credit during the correct tax year even if you don’t plan on using it. The reason is, if you want to carry forward or transfer the credit, you must report it during the correct year.

Check out these tax considerations for students.

Additional Benefits You May Miss Out On

To claim a tax refund
To claim the Canada’s Worker Benefit (CWB)
To apply an incurred non-capital loss on a future tax return
To contribute any income to an RRSP to keep the deduction limit in the future
To carry over any unused investment tax credit you incurred
If you receive the guaranteed income supplement under the old age security program

Additional Reading

Frequently Asked Questions

Where can I file my taxes in Canada?

There are many ways you can file your tax return in Canada. You can use Wealthsimple Tax, Turbo Tax, and other tax software companies. You could also choose to work with an accountant or a community volunteer tax clinic to help you file your tax return. Lastly, you could go old school and complete your tax return by paper or by phone.

When do I need to file my taxes in Canada?

In Canada, the earliest you can file your taxes is on Feb 22. The latest you can file your taxes without penalty is April 30th and June 15th if you’re self-employed.

How will I receive my tax refund or credits?

If you haven’t signed up for direct deposit, you should receive your refund via a cheque in the mail. However, certain benefits require you to be signed up with a direct deposit in order to receive the payment. If you believe you’re missing out, be sure the log into your CRA MyAccount to see if you have any uncashed cheques.

Bottom Line

Clearly, there are several scenarios that would not only require you to file a tax return even if you’re not working but there are also many cases where you would stand to benefit from such filing in the event that you are not necessarily obligated to file.

If you want to take advantage of any one of the above benefits, filing a tax return will need to be done, regardless of whether or not you are working and bringing in an income. As a general rule of thumb, consider filing your taxes, no matter what your employment status may be.

Rating of 4/5 based on 10 votes.

Lisa Rennie

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!