Are You Missing Out on These Canadian Federal Tax Credits?

We all want to decrease our tax liabilities, and taking advantage of all possible tax credits is one way to do that. From medical expenses to buying your first home, there are several tax credits that Canadians can take advantage of.

While it's nearly impossible to list every federal tax credit (and everyone's tax situation is unique), here are some potentially overlooked tax credits to ensure that you're being efficient with your tax planning.

Federal Tax Credits for Families

There are quite a few tax credits available for families. Here are just a few:

• Any Canadian who is caring for a parent or who has renovated their home to improve accessibility for a qualifying individual should keep the caregiver tax credit and home accessibility expense tax credit in mind.^1,2
• While not a tax credit, the Canada child benefit (CCB) is a tax-free monthly payment made to eligible families raising children under 18. This benefit may include the child disability benefit, which is a tax-free monthly payment made to families caring for children under age 18 with severe and prolonged impairment in physical or mental functions.^3,4
• You may be able to claim an amount for eligible adoption expenses, including fees paid to an adoption agency, court costs, necessary travel expenses, and other reasonable expenses. The maximum claim for each child is $17,131.⁵

Federal Tax Credits for Investors

Canadian taxpayers who are generating income from foreign investments may be eligible for the foreign tax credit. This tax credit applies to foreign income or profit taxes you have paid on income you received from outside Canada.⁶

Healthcare Federal Tax Credits

Did you know that Canada offers a variety of tax credits for your mental and physical health?

• The medical expense credit can cover a variety of medical expenses, such as prescriptions, eyeglasses, private healthcare premiums, dental visits, and medical travel expenses.⁷
• Canada also has a disability tax credit. To be eligible to take advantage of this tax credit, you must be unable (or take an unreasonable amount of time) to complete normal functions for everyday life without assistance due to your condition. Many taxpayers might assume that this tax credit covers only physical disabilities, but it may also be utilized to cover mental health disabilities. Rather than focusing on certain disabilities, the credit focuses on how a person's disability impacts their daily life.⁸

Federal Tax Credits for Students

Canadian students can take advantage of a number of tax credits, including the following:

• A student may be able to claim an amount on their tax return for the interest they paid on their student loans. Only the student themself can claim this interest, and they may be able to carry the interest forward and apply it on their returns for the next five years.⁹
• Another tax credit for students is the Canada training credit, which may be used for eligible tuition and fees paid for courses taken. Eligible educational institutions include universities, colleges, and other educational institutions, as well as occupational skills courses that are certified by the Minister of Employment and Social Development.¹⁰

Miscellaneous Federal Tax Credits

In addition to the aforementioned tax credits for families, investors, students, and healthcare expenses, there are also a few miscellaneous credits. Here are some examples:

• The Climate action incentive credit "is a tax-free amount paid to help individuals and families offset the cost of the federal pollution pricing. It is available to residents of Alberta, Saskatchewan, Manitoba, and Ontario. It consists of a basic amount and a supplement for residents of small and rural communities."¹¹
• The First-Time Home Buyers' Tax Credit is a credit for any first-time home buyer who acquires a qualifying home.¹²
• The digital news subscription tax credit is a non-refundable tax credit for amounts paid by individuals to a qualified Canadian journalism organization (QCJO) for qualifying subscription expenses.¹³
• The goods and services tax/harmonized sales tax (GST/HST) credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset the GST or HST they pay.¹⁴
• The Canada workers benefit (CWB) is a refundable tax credit to help individuals and families who are working and earning low incomes.¹⁵

In addition to the tax credits above, each province or territory has its own tax credits. For example, the Canada Revenue Agency (CRA) administers the BC family benefit and BC climate action tax credit for British Columbia. Before filing your tax return this year, ensure that you're taking advantage of all eligible tax credits.¹⁶

1. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/canada-caregiver-amount.html
2. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2022-plan-grow-economy-make-life-more-affordable/home-accessibility-tax-credit.html
3. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html
4. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-disability-benefit.html
5. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31300-adoption-expenses.html
6. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-40500-federal-foreign-tax-credit.html
7. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4065/medical-expenses.html
8. https://swiftdisability.ca/knowledge-base/news/does-mental-illness-qualify-for-the-disability-tax-credit/?
9. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31900-interest-paid-on-your-student-loans.html
10. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2019-investing-middle-class/canada-training-credit.html
11. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/cai-payment.html#toc0
12. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2022-plan-grow-economy-make-life-more-affordable/first-time-home-buyers-tax-credit.html
13. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/deductions-credits-expenses/digital-news-subscription.html
14. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/goods-services-tax-harmonized-sales-tax-gst-hst-credit.html
15. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-workers-benefit.html
16. https://www.canada.ca/en/revenue-agency/services/child-family-benefits/provincial-territorial-programs/province-british-columbia.html

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.