International Students Leaving Canada: Final Tax Return and Refund

International student leaving Canada: which tax return do you file?

If you were a resident of Canada while studying, you file one Canadian return for the year you leave: world income (income from every country, such as interest on a bank account back home) from January 1 to your departure date, and only certain Canadian income after it (CRA, Leaving Canada). The return is due April 30 of the next year, and it is the only way tax withheld from your pay comes back.

What makes a student's case not simple:

• Property or investments at home or here. Leaving can tax a gain you never cashed (see departure tax below).
• A long stay. A PhD, or study plus a work permit, can pass the no more than 60 months in the preceding 120 months test and pull property from home into departure tax.
• Quebec. Quebec students also deal with Revenu Québec, which runs its own income tax.
• Two countries. Your new country may tax the same income or gain.
• Years you never filed. Tax withheld in earlier years comes back, and their tuition carries forward, only once those returns are filed.

Gather your T4 slips, your T2202 tuition slip, proof of your departure date and a foreign address before you fly.

Were you a resident of Canada while studying?

A student who sets up a home here usually has the ties that make them a resident, but status turns on your residential ties, not your permit (CRA, International students). Significant ties are a home in Canada, a spouse or common-law partner here, and dependants here. Secondary ties include a Canadian bank account, a provincial health plan, a car or furniture, and a driver's licence.

Status decides what you report and which credits you get:

• Resident: world income while resident, with tuition and credits.
• Non-resident: a student without significant ties who stays under 183 days in the year reports only Canadian income. For a year with no residence at all, most personal credits are allowed only if all or substantially all of your income is taxable in Canada (Income Tax Act, section 118.94). The tuition credit is not on that restricted list (section 118.5).
• Deemed non-resident: significant ties here, but a resident of your home country under its tax treaty with Canada; the non-resident rules apply.
• Deemed resident: no significant ties, but 183 days or more in the year and not resident in your home country under a tax treaty.

If you are unsure, you can ask the CRA for an opinion on Form NR74. The full ties test is in Canadian tax residency.

Do you file for the year you leave, and which departure date goes on it?

Yes, a resident student files for the year of departure, and the date on it is usually the day you leave. The CRA uses the latest of the day you leave, the day your spouse or dependants leave, and the day you become resident in your new country. If you lived abroad before coming to Canada and are going back there, you usually become a non-resident the day you leave (CRA, Leaving Canada).

The date splits the year: world income before it, only Canadian-source income after it. Keep a boarding pass, the lease end notice and your new country's entry record. To file and pay once you are abroad, see filing your departure return from abroad. If your 9-series SIN has expired, see filing without a valid SIN.

Can you get back tax withheld from a campus, co-op or TA job after you leave?

Yes, if more was withheld than you owe, the refund comes from filing your return; the CRA lists claiming a refund as a reason to file (CRA, Who has to file). Leaving Canada does not cancel the refund, but nothing comes back until the return is filed. This covers income tax: CPP contributions and EI premiums come back only if too much was deducted, and the return works that out.

A refund is likely only if your credits, including tuition, cover more of your tax than was withheld. On a part-year return, the basic personal amount and similar credits are reduced to the resident part of the year, while tuition for terms inside that period is claimed in full (Income Tax Act, section 118.91). How each credit is cut is in the part-year return guide.

A final pay slip or T4 that arrives after you leave still goes on this return; see Canadian slips after leaving.

Tuition on your last return: claiming this year's T2202 before you go

Claim this year's tuition on your departure return using the T2202 your school issues and federal Schedule 11 (CRA, P105). Tuition for a term that falls wholly within your resident period counts; a term that runs past your departure date may not, so check it before counting on a refund; Schedule 11 also shows what you carry forward.

• Download the T2202 from your student account before you lose access to it.
• Tuition you carried forward from earlier years must be used first in a year you owe tax, so it can absorb tax on the departure return. If you skipped returns for earlier study years, that tuition is not on record until you file them; see non-resident returns and catch-up.
• Using leftover tuition in later years, once you are a non-resident, is covered in unused credits when leaving Canada.

Moving costs for the move out are generally not deductible; the exception covers only someone leaving to study full time abroad on a taxable Canadian award (see the part-year return guide).

Do GST/HST credit payments stop when you go?

Yes. The Canada Groceries and Essentials Benefit (formerly the GST/HST credit) is paid only if you were resident in the month before the payment and at the start of the payment month (CRA, who is eligible). A non-resident generally cannot receive it, and the CRA asks anyone still receiving it after leaving to contact it immediately (CRA, Leaving Canada).

Payments made after your departure date are generally not yours to keep, and the CRA recovers them. How to stop them and repay is in benefits after leaving Canada.

Does departure tax touch an investment account, crypto or property back home?

It can. When you leave, Canada treats most property you own as sold at fair market value that day, so a gain is taxed with no sale (CRA, Dispositions of property; Income Tax Act, section 128.1). Savings held in cash, a TFSA or an RRSP are not deemed sold; stocks, ETFs or crypto held outside those accounts are.

Property you owned on arrival is valued at its market value on the day you became resident, so only the growth while you lived here counts. 50% of a capital gain is added to your income and taxed at your normal rates. Each deemed gain or loss is worked out on Form T1243 and carried to Schedule 3 of the departure return. If the property you own when you leave is worth more than $25,000 in total, you also file Form T1161; cash and bank deposits, registered plans and personal items each worth under $10,000 are left out of that total (CRA, Dispositions of property). T1161 is due by your filing due date even if you do not otherwise have to file; filing it late costs $25 a day, at least $100 and up to $2,500. You can elect on Form T1244 to defer paying the tax on these gains until you sell; the election is due April 30 of the year after departure, and security is needed above a set amount of federal tax.

The short-stay rule in depth is in leaving within five years of arriving; for crypto, see departure tax on crypto; for a home abroad, see foreign real estate when leaving Canada.

What happens to a TFSA or RRSP you opened while studying?

You can keep both, and neither is treated as sold when you leave. A TFSA keeps growing free of Canadian tax (your new country may not treat it as tax-free), and you get the full annual limit ($7,000) in the year you leave, but no new room in any full year you are a non-resident (CRA, TFSA and non-residents).

• Do not add to the TFSA after you leave. A contribution made while non-resident is taxed at 1% for each month it stays in the account.
• Withdrawals while non-resident are not taxed in Canada.
• RRSP: whether to cash it out before or after the departure date is covered in RRSP cash-out before or after leaving.

Staying on a post-graduation work permit instead: what changes?

If you stay and keep your home here, you generally remain a resident: no departure return yet, and you keep filing full-year returns. Unused tuition then reduces tax on your work income.

Two things keep moving while you stay. The months you live here count toward the no more than 60 months in the preceding 120 months test, so property from home can fall into departure tax later. And TFSA room keeps growing each resident year. When the permit ends and you leave, see leaving Canada after a work permit ends.

What to gather before you fly

Collect these while you still have access to school, employer and bank accounts:

Update your address with the CRA, and set up CRA My Account with a sign-in that works abroad, before you go so the notice of assessment and any refund reach you. Quebec residents also file with Revenu Québec, because the CRA administers provincial income tax for every province except Quebec (CRA, provincial tax).

Example

Illustrative figures in Canadian dollars.

Master's student with a campus job

A master's student in Ontario who arrived three years ago leaves on June 30 after graduating. A campus job paid C$12,000 this year with C$900 income tax withheld. She files a part-year return with June 30 as her departure date, reports world income to that date and claims her tuition on the T2202. With income this low and tuition credits, much of the C$900 may come back as a refund.

ETFs in a Canadian brokerage account

A student bought C$8,000 of ETFs in a Canadian account; they are worth C$11,000 when he leaves. They were bought while resident, so the short-stay exception does not cover them: his departure return shows a C$3,000 deemed gain, of which C$1,500 is taxable, reported on Form T1243 and Schedule 3. Leaving out his cash and personal items, what he owns is worth under C$25,000, so no T1161.

Doctoral student with a flat at home

A doctoral student arrived seven years ago and owns a flat in her home country bought before she came. It was worth C$150,000 when she arrived and C$180,000 when she leaves.

• Years 1 to 5: resident 60 months or less, so the flat would have been excluded.
• Years 6 and 7: resident more than 60 of the last 120 months, so the exclusion is lost.
• Departure: the flat is treated as sold for C$180,000 against a C$150,000 starting value, a C$30,000 gain, C$15,000 of it taxable. Her property is over C$25,000, so she files T1243 and T1161. She can elect on Form T1244 to pay the tax when she sells. Her home country may tax a later sale differently.

Different for you?

• You own property or investments at home or here, or stayed more than five years: departure tax and two-country relief need the numbers checked with individual tax help; background in leaving within five years of arriving and foreign real estate when leaving Canada.
• You studied in Quebec: a second provincial return applies; get individual tax help.
• You are unsure you were ever a resident: see Canadian tax residency.
• You missed returns for earlier study years, or a scholarship was paid after you left: see non-resident returns and catch-up and get individual tax help.
• Benefits kept arriving after you left: see benefits after leaving Canada.
• You are staying on a work permit first: see leaving Canada after a work permit ends.
• The full departure picture: see leaving Canada.