The Canada Training Credit is a refundable credit which mature adults (age 25 to 65) can claim for education costs. However, the amount you can claim is based in part on income reported on your tax return and is identified as your Canada Training Limit on your Notice of Assessment.

2. Canada Child Benefit

The Canada Child Benefit is usually paid to the children’s mother. However, if she is married or in a common-law relationship, her spouse or common-law partner must also file a return in order for the benefits to continue. This rule applies even if the spouse or common-law partner has no income to report. The information contained in the returns is used to recalculate the claimant’s benefits for the next benefit period.

The rule that both spouses or common-law partners must file a return does not apply if the claimant’s spouse or common-law partner is a non-resident. In this case, he or she must file Form CTB9 Canada Child Tax Benefit Statement of Income.

3. Tuition Carry Forwards

Students with tuition fees may not get a refund if they did not have any tax deducted at source from their income. However, they must still file a return with the relevant information entered on their Schedule 11 if they want to transfer the unused amount to a spouse or parent or they want to carry it forward to a future year.

With the cost of tuition rising, students can build up a substantial carry forward amount during the years they are in school. They will benefit from this when they begin working and will be glad they bothered to file tax returns during they years in question.

4. Eligibility for New Programs

For example, in order to be eligible for CERB or the Canada Recovery Benefit, you needed to have working income of at least $5,000 either in 2019 or in the 12 months prior to application. It made it a whole lot easier to show you met that requirement if you filed a 2019 or 2020 tax return.

Many provincial programs are also dependent on you having filed a tax return.

5. Mortgage or Loan Applications

Banks or other lenders will usually require proof of income before processing your loan or mortgage. A letter from your Human Resources Manager is usually not sufficient for this purpose since it can easily be forged. That is why they will also want to see a copy of your tax return and/or a Notice of Assessment.

If you are in a hurry to get your loan or mortgage application processed, you will be grateful that you took the time to file a tax return even though you were not technically required to do so.

6. Student Loans

The Canada Student Loans Program provides financial assistance in the form of loans and grants to post-secondary students who demonstrate financial need. In order to prove that they meet the eligibility requirements, the provincial government agency administering the program usually requires the applicant to provide them with information from the previous year’s tax return or authorize the Canada Revenue Agency to release the information.

Unless the applicant is an independent student, the provincial government agency will usually want to see information from his or her parents’ tax returns as well.

7. Guaranteed Income Supplement

When taxpayers first apply for the Guaranteed Income Supplement, they must do so using Form ISP3025 Application for the Guaranteed Income Supplement or Statement of Income for the Allowance or Allowance for the Survivor. However, thereafter, they can renew their benefits simply by filing an income tax return by April 30 each year.

If a senior fails to file a tax return, Service Canada will send him or her a renewal application form in the mail. If neither an income tax return nor renewal application form is filed, Service Canada will cease paying the GIS beginning in July.

8. Subsidized Housing

Provinces or municipalities will only provide subsidized housing if the tenant’s income is below a certain threshold. For example, the BC government will only provide rental assistance under the BC Rental Assistance Program to working families with children if their gross household income is less than $40,000 per year.

In order to substantiate your income, most provinces will require you to file a tax return.

9. Subsidized Nursing Home or Assisted-living Facility

Government subsidies are available in most provinces for taxpayers whose income is inadequate to meet basic accommodation costs in a nursing home. In the event that you or your spouse needs the care or facilities provided by a nursing home or special care home, you will therefore be required to substantiate your income. A tax return is the best way of doing this.

10. Assistance for Health Insurance

A number of provinces offer assistance to lower-income taxpayers in order to help them pay the cost of health insurance premiums and/or the cost of prescription drugs.

Manitoba, New Brunswick, Nova Scotia and Saskatchewan also offer Pharmacare or Drug Plan programs for lower-income residents of those provinces.

11. RRSP Contribution Limit

Earned income will not be taken into consideration for determining your RRSP contribution room unless it is reported on a tax return.

It is important to note that taxpayers under the age of 18 can accumulate RRSP contribution room even though they are too young to own an RRSP at the present time. It is therefore important for them to report their income from summer jobs on a tax return even though there may be no other reason to do so.

12. Provincial Tax Credits

A number of provincial tax credits or rebate programs can only be claimed by filing a tax return. The more common credits are listed below:

Newfoundland

Newfoundland and Labrador Income Supplement
Newfoundland and Labrador Seniors’ Benefit (NLSB)

Prince Edward Island

Prince Edward Island Sales Tax Credit

Nova Scotia

Nova Scotia Affordable Living Tax Credit (NSALTC)
Poverty Reduction Tax Credit

New Brunswick

New Brunswick Home Energy Assistance Program
New Brunswick Seniors’ Homes Renovation Tax Credit
New Brunswick HST Credit

Québec

Solidarity Tax Credit
Tax Credit for Home-support Services for Seniors
Tax Credit for Eco-friendly Home Renovation (EcoRenov)
Tax Credits respecting the Work Premium
Tax Credit for Child Care Expenses
Child Assistance Payment
Tax Credit for Children’s Activities
Tax Credit for Caregivers

Ontario

Climate Action Incentive (a federal payment available to residents of Ontario)
Ontario Trillium Benefit

Manitoba

Personal Tax Credit
Education Property Tax Credit
School Tax Credit for Homeowners
Seniors School Tax Rebate
Fertility Treatment Tax Credit
Primary Caregiver Tax Credit
Climate Action Incentive (a federal payment available to residents of Manitoba)

Saskatchewan

Climate Action Incentive (a federal payment available to residents of Saskatchewan)
Saskatchewan Low-Income Tax Credit (SLITC)
Saskatchewan graduate tuition tax credit

Alberta

Alberta Child and Family Tax Credit
Alberta Seniors’ Benefit
Climate Action Incentive (a federal payment available to residents of Alberta)

British Columbia

BC Sales Tax Credit
BC Low Income Climate Action Tax Credit
BC Seniors’ Home Renovation Tax Credit

General Tax Tips

Make sure you file your tax return on time if you have a balance due, even if you cannot pay them right away. By doing so, you will at least avoid the late filing penalty. This is currently calculated as five percent of your balance due, plus one percent per month for a maximum of 12 months.

If you are turning 19, make sure you file a 2022 income tax return in order to receive the GST/HST credit. You will get at least one GST/HST Credit cheque for the payment dates following your birthday. For example, if you turn 19 in March 2023, you will receive the last quarterly payment for the July 2022 to June 2023 benefit period, which is paid in April 2023.

Contributions to a political party get a bigger tax credit than contributions to charities. In fact, for federal political contributions you get a credit of 75% on your first $400 contributed. If you contribute to a political party or candidate, make sure to keep your receipts separate from your charitable receipts.

Old charitable donation receipts that you forgot to claim in previous years should not be thrown away. Charitable donation receipts are good for five years after the year in which the donation was made.

If you are a resident of Ontario, Manitoba or Saskatchewan or Alberta, you have to pay the federal carbon tax. That is the bad news. The good news is that the government is refunding you what you will have to pay upfront in the form of the Climate Action Incentive. This is a refundable tax credit which you can only get by filing an income tax return.

Tax Tips for Employees

If you have employment income, make sure you claim the Canada Employment Amount.

Employees are not normally allowed to claim supplies unless they are directly used up in the course of their employment. However, employees who are tradespersons may be able to claim a deduction for the cost of tools.

Wage loss replacement benefits are completely tax-free if you paid all the premiums to the plan. They are taxable if your employer paid all the premiums. If both you and your employer contributed to the premiums, you can reduce the taxable portion of the benefits by the premiums you paid.

If you have to move because your place of employment changes, and your new residence is at least 40 kilometres closer to your new job than your old residence, you may be able to claim moving expenses. Your expenses are limited to the employment income earned at your new location. However, any amount in excess of this can be carried forward and claimed next year instead.

Tax Tips for Families

Inform the Canada Revenue Agency (CRA) if there any changes in your family circumstances which could affect your GST/HST credit. Examples include a change in marital status or a change in the number of children in your care. The change will be reflected in your next quarterly GST/HST payment.

If you deposit your Canada Child Benefit into a separate bank account specifically for your child, any interest it earns is considered your child’s income rather than your own.

If you are the single parent of a child under 18 and you live with your child and contribute to the maintenance of the dwelling in which you both live, you can claim an eligible dependant amount (which is the same as the spouse or common-law partner amount for couples). The amount is reduced by any income your child earns.

You may claim a non-refundable tax credit for expenses relating to the adoption of a child. You claim all your expenses in the year the adoption is finalized.

If you sold your home this year, make sure to designate it as your principal residence when you file your tax return. Failure to do so could result in the principal residence exemption being denied, which could result in the capital gain being taxable.

Tax Tips for Seniors

Seniors who turn 65 can postpone receiving Old Age Security benefits for up to five years and receive higher annual benefits when they do start collecting.

If you have to make renovations to your home in order to make it safer or more accessible, you can claim a 15% credit for the first $10,000 of expenses.

If you are disabled due to a mobility impairment, the expenses may also qualify as medical expenses, in which case you can claim them twice. There are also similar provincial credits in British Columbia, Ontario and New Brunswick.

If you have to travel more than 40 kilometres in order to get medical treatment which is not available locally, you can claim the cost of transportation as a medical expense. If you have to travel more than 80 kilometres you can also claim other travel expenses, such as meals and accommodation.

Disabled or Infirm Dependents Tax Tips

If you are disabled and need to pay for certain types of disability supports (such as optical scanners or sign-language interpretation services) in order to work or go to school, you may be able to claim a deduction for your expenses.

If you are supporting an infirm dependant who is 18 or over and infirm, you may be able to claim the Canada caregiver amount.

You may also claim the Canada caregiver amount for children under 18 at the end of the year who have an impairment in physical or mental functions. The child must be dependent on others for assistance in attending to personal needs and care when compared to children of the same age.