How CCTB is calculated for newly landed immigrant !

[Hasni]

Dear friends,
I land today and apply for CCTB. In the form they ask my previous one year income, whether be outside Canada. Is it just as a formality that they ask to share or our benefits are calculated based upon that worldwide income which we mention. Please advise.
Thanks

 

[CanV]

They will evaluate based on your income, yes worldwide. Why would this be a formality? It is a serious question.

 

[Hasni]

They will evaluate based on your income, yes worldwide. Why would this be a formality? It is a serious question.

but CanV my point is that my world wide income should only come into question once I establish residential ties with Canada. Now after I land in Aug2014, and apply for benefits, I am just a starter, meaning I have yet to establish my residential ties with Canada. So the income I reflect while applying for benefits soon after landing should not be taken as basis for calculating my benefits. Also note that I haven't submitted any tax return yet cuz I am landing in the middle of a financial year, will submit in March2015 though as advised by my accountant. What do you say.

 

[CanV]

but CanV my point is that my world wide income should only come into question once I establish residential ties with Canada. Now after I land in Aug2014, and apply for benefits, I am just a starter, meaning I have yet to establish my residential ties with Canada. So the income I reflect while applying for benefits soon after landing should not be taken as basis for calculating my benefits. Also note that I haven't submitted any tax return yet cuz I am landing in the middle of a financial year, will submit in March2015 though as advised by my accountant. What do you say.

CRA and CCTB normally work on a yearly basis. If you landed on Dec 29, 2014 then you are a resident for the entire year of 2014. Therefore I wouldnt be surprised if they wanted to look at your entire yearly income, regardless of when you became a PR. Some accountants may give you better answers than most of us here.

 

[Leon]

You will not be asked to pay taxes in Canada of world income you had before settling.

However, when applying for benefits, your income has to be taken into account. Just because you are new in Canada doesn't mean that they will assume that you had no income the year before.

If you read here: http://www.cra-arc.gc.ca/bnfts/cctb/fq_qlfyng-eng.html#q8 you will see this:

There are certain situations where you may be required to complete additional forms or provide extra documentation with your application.

a) If any of the following applies to you, you will also have to complete the schedule RC66SCH, Status in Canada/Statement of Income.

You and/or your spouse or common-law partner are not Canadian citizens.
You and/or your spouse or common-law partner have become new Canadian citizens within the last 12 months.
You and/or your spouse or common-law partner have become residents of Canada within the last two years.
You and/or your spouse or common-law partner have moved back to Canada and re-established residential ties.

In this form, they ask for your worldwide income for 1-2 years before you became a resident of Canada.

Benefits paid to you in Canada take income into account because they would rather pay more to the needy than to pay the same amount to everybody regardless of their need. If you had good income in the past 2 years, you will be considered less needy than someone who has low income.

 

[Hasni]

You will not be asked to pay taxes in Canada of world income you had before settling.

However, when applying for benefits, your income has to be taken into account. Just because you are new in Canada doesn't mean that they will assume that you had no income the year before.

If you read here: http://www.cra-arc.gc.ca/bnfts/cctb/fq_qlfyng-eng.html#q8 you will see this:

In this form, they ask for your worldwide income for 1-2 years before you became a resident of Canada.

Benefits paid to you in Canada take income into account because they would rather pay more to the needy than to pay the same amount to everybody regardless of their need. If you had good income in the past 2 years, you will be considered less needy than someone who has low income.

perfect, thanks for explaining it so nicely.

 

[Hasni]

Just now a question connected to the same subject hit my mind....is there any difference between gross annual income and annual income, and which one we are supposed to reflect in the forms. Tahnks

 

[Leon]

Just now a question connected to the same subject hit my mind....is there any difference between gross annual income and annual income, and which one we are supposed to reflect in the forms. Tahnks

For tax purposes, you always write your gross income as far as I know. On the form, they just say to include all income from all sources. If you want to, you can fill out the form and send a letter along with it explaining from which sources you had income and how much is gross and how much is net. You can include tax assessments from where you are living now.

 

[singhabhishek251]

This is a very good information for any new comer and I think these benefits can be changed after staying for sometime and they are asking just on landing to make sure and figure out requirement for your initial benefits.

 

[Leon]

This is a very good information for any new comer and I think these benefits can be changed after staying for sometime and they are asking just on landing to make sure and figure out requirement for your initial benefits.

That's right, they initially calculate your benefits by using your world income but as you settle in Canada and file your taxes every year, they will use your Canadian income to calculate the amounts instead.