Taxes for Young Adults in Canada 2025

Updated March 2025 · 9 min read

Filing taxes for the first time in Canada is surprisingly painless — and surprisingly profitable. Young adults with modest income are often owed a refund, qualify for several valuable credits, and are building RRSP room even if they're not contributing yet. The biggest tax mistake most young Canadians make is not filing at all.

Here's what you actually need to know about taxes in your late teens and 20s in Canada.

Why You Should File Even With Low Income

Many young people think "I didn't make much money — I don't need to file." This is wrong and costly. Even with low income, filing your taxes:

• Builds your RRSP contribution room (you earn 18% of earned income in new RRSP room each year)
• Qualifies you for the GST/HST Credit — a quarterly payment from the government worth $300-$500+/year for low-income Canadians
• Qualifies you for the Canada Carbon Rebate (Climate Action Incentive) in eligible provinces — up to several hundred dollars annually
• In Quebec and other provinces, may qualify for additional provincial credits and benefits
• Establishes your Canada Child Benefit eligibility if you have kids
• May get you a refund of income tax that was over-withheld from your paycheque

The deadline: April 30 each year (June 15 if you or your spouse have self-employment income). Filing late with a refund has no penalty. Filing late with a balance owing incurs penalties and interest.

The Key Documents You Need

• T4 slips: From every employer you worked for in the year. Shows employment income and deductions. Your employer must provide by the end of February.
• T4A slips: For scholarship or bursary income, CERB/CESB, or other self-employment income
• T2202: Tuition receipt from educational institutions for the tuition tax credit
• RRSP contribution receipts: If you contributed to an RRSP
• Charitable donation receipts: For the donation tax credit
• Investment income slips (T3, T5): From non-registered investment accounts

Credits and Deductions Young Adults Often Miss

Tuition Tax Credit

If you paid tuition to a qualifying educational institution, you get a 15% federal tax credit on those amounts. If your credit exceeds your tax owing (likely if your income was low), the unused portion carries forward to future years — potentially reducing taxes when your income is higher.

Moving Expenses

If you moved at least 40 km closer to a new job or school, you can deduct eligible moving expenses from related income. This includes movers, travel costs, storage, and temporary accommodation.

Work From Home Expenses

If you worked from home due to employment conditions, you may be able to claim home office expenses. The simplified flat rate method allows $2/day of working from home up to a maximum.

Student Loan Interest

Interest paid on qualifying student loans (federal and provincial) qualifies for a 15% federal tax credit. Note: federal student loans at 0% generate no interest to claim, but provincial loan interest may still qualify.

How to File: Your Options

Free tax software: For simple returns (T4 income, basic credits), free NETFILE-certified software handles everything. Wealthsimple Tax (formerly SimpleTax) is excellent and genuinely free for most Canadians. TurboTax has a free tier. These are software that file directly with the CRA electronically.

Community Volunteer Income Tax Program (CVITP): Free tax filing by trained volunteers for eligible Canadians with modest income. Run by the CRA, available at thousands of locations across Canada. If your income is below ~$35,000-$45,000 (thresholds vary), this is an option.

CRA My Account: Set up your CRA My Account online. You can see your tax return status, RRSP room, TFSA room, and benefits information. Do this once and keep your login.

Common First-Time Filer Mistakes

• Not reporting all income. All T4s must be reported. The CRA has all your T4 information already — if you file with a T4 missing, you'll get a reassessment.
• Missing the tuition carry-forward. If you had tuition credits you couldn't use in a low-income year, they're carried forward automatically but you need to claim them in the right year.
• Forgetting provincial taxes. Canadian tax returns cover both federal and provincial taxes in one filing. Provincial tax rates and credits differ by province.
• Not setting up direct deposit for refunds. CRA can direct deposit your refund directly to your bank account — much faster than a cheque. Set it up in My Account.

A Note on Self-Employment and Gig Work

If you earn money through gig platforms (Uber, DoorDash, Fiverr, Etsy) or freelance work, this is self-employment income. You must report it, pay income tax on it, and contribute to CPP on it. The upside: you can deduct legitimate business expenses against that income. Keep records.