Tax credits are amounts that you can claim against your taxable income to reduce your taxable income.
In Canada, there are two types of tax credits: refundable and non-refundable. Refundable tax credits are tax credits that you can claim whether you have any taxable income or not. That means that the Canada Revenue Agency will refund you real money for these credits even if you have no taxable income.
Non-refundable tax credits are different. These are tax credits that you can use to reduce taxable income. However, if your taxable income is zero, then CRA will not refund you any money—they are non-refundable.
In addition, there are tax credits that are provincial—depending on where you live—and federal tax credits that are available to everyone no matter which province you call home.
So, what tax credits can I claim?
There is a long list of provincial, federal, refundable and non-refundable tax
credits, a complete discussion of which is beyond the scope of this article. But we’ll mention some of the broad categories that you may want to explore.
Provincial
Different provinces have different tax credits available, and they can be quite different from province to province.
Family and Child Care
There are several tax credits available under the category of family and child care. These tax credits can include—but are not limited to–daycare, boarding school, medical expenses, and adoption expenses.
Disability
For those who are disabled or who care for a family member who is disabled, again, there are several tax credits available.
Employment
This is a big category with lots of tax credits, especially if you have your own
business. These credits include business expenses, moving, and fees to professional organizations like unions.
If you are doing your own taxes, it’s a good idea to familiarize yourself with what tax credits could apply to you at the beginning of the tax year, so you can save relevant receipts if needed.
If you have an accounting professional preparing your taxes, then a short
consultation at the beginning of one tax year or the end of another is a good idea. A professional will know all of these potential tax credits and can help you plan ahead.
If you have any questions about this article or tax benefits, in general, or you want to make an appointment with an accounting professional at Naicker & Associates, please contact us at (604) 469-9369. We are based in Port Moody, BC.
