RESOLVED: Proration of Non-Refundable Tax Credits for Newcomers

The Canada Revenue Agency (CRA) has recently revised its interpretation regarding non-refundable tax credits for newcomers to Canada. Taxpayers who declare zero income, from both foreign or Canadian sources, for the period prior to arriving in Canada no longer meet the 90% rule and will have their non-refundable tax credits prorated.

Previously, declaring a zero income for the part of the year when newcomers were not a resident of Canada entitled them to claim 100% of their non-refundable tax credits. 

TaxCycle does not yet take this change into account on the Immigrant worksheet.

Resolution

We have included this change in the latest TaxCycle update.