Many people do not file income tax returns for their children until it is strictly necessary. Generally, a tax return is required if an individual has sufficient taxable income to create a tax liability (normally about $ 7,800).

However, there may be good reasons to file a tax return even when income is below $7,800. Where a child has had income tax withheld from their employment income (see Box 22 on their T4 slip), they can recover this tax by filing a tax return. In addition, if CPP was withheld but their income for the year is below $ 3,500, they can recover the CPP withheld.

Another advantage of filing a return is that reporting "earned income" (salary, wages, net business income) to Canada Customs and Revenue Agency will create RRSP "contribution room". It is not necessary to make RRSP contributions currently, but the available room will carry forward indefinitely and the child can choose to make a contribution and deduct it on a future tax return. This will increase their lifetime contribution limit.