Top Tax Credits You May Not Be Claiming

Could you get a larger return with tax credits?

Doing your taxes on your own this year? If they’re pretty straightforward you should be able to get through them without losing your hair. But if you’re even the slightest bit doubtful that you’ve done them correctly, you might want to pay someone to look over them for you, especially if you think you haven’t taken advantage of the benefits and credits available to you. Many accountants will modify their rates to meet your needs. You can save money, too, if you do most of the work yourself and just have them to go over the final details. If you don’t already have these credits on your list, be sure to add and take advantage of them.

Here are the 2012 personal tax credits available to qualifying Canadians: 

Get An Income Boost

GST/HST tax credit:Paid quarterly, the GST tax credit helps families and individuals who have low to modest income. The purpose of the credit is to help offset some of the costs that they have to pay. CRA says that you are eligible for this credit if you are a resident of Canada for income tax purposes in the month prior to and at the beginning of the month in which the GST/HST credit is issued and at least one of the following applies:

Before the month in which we make a quarterly payment, you

  • are 19 years of age or older;
  • have (or previously had) a spouse or common-law partner; or
  • are (or previously were) a parent and live (or previously lived) with your child.

Working income tax credit:To help provide relief for those who have low income, the Working Income Tax Benefit (WITB) can be claimed on Line 453 of your tax return.

Ontario Trillium Benefit:The Ontario Trillium Benefit is the combined payment of the Ontario energy and property tax credit, the Northern Ontario energy credit, and the Ontario sales tax credit. According to CRA, the annual OTB entitlement is divided by 12; payments are issued monthly. Your 2013 OTB payments, which are based on your 2012 income tax and benefit return, will be issued on the 10th of each month, starting on July 10, 2013.

Please note that if your 2013 OTB annual entitlement is $360 or less, it will not be issued monthly, but instead in one lump-sum payment.

Credits For Your Kids

Canada Child Tax Benefit (CCTB): The Canada child tax benefit is a tax-free monthly payment made to eligible families to help them with the cost of raising children under age 18. The CCTB may include the

  • National child benefit supplement (NCBS)
  • Child disability benefit (CDB)
Child fitness tax credit: CRA states, “You can claim to a maximum of $500 per child the fees paid in 2012 relating to the cost of registration or membership for your or your spouse’s or common-law partner’s child in a prescribed program of physical activity.”
 Enter this information in Line 365 of your return.

Childcare tax credit: Childcare costs can be claimed as a deduction from your income. Your childcare expenses can include any money spent on daycare or nursery school, afterschool programs, day camps and day sport schools, as well as overnight sport schools and camps. It also includes private school or boarding school tuition. To better determine what you can deduct, please visit CRA’s website. Enter your childcare tax credit amount on Line 214 of your personal tax return.

CRA watches this line carefully for those who are claiming dependents who aren’t actually dependent. While you can claim a dependent over the age of 18, you can only do so under certain circumstances.

Offset Your Student Costs

Education tax credit/Tuition tax credit:According to CRA, “The maximum tuition, education, and textbook amount transferred from a child (or from each child), is $5,000 minus the amounts that he or she uses, even if there is still an unclaimed part. Tuition, education, and textbook amounts that the student carried forward from a previous year cannot be transferred.” Only one person can claim this transfer from the student though. Enter your education/tuition tax credit amount on Line 324 of your personal tax return.

While you can deduct interest paid for your student loan interest, this doesn’t include a family loan or your line of credit. Only qualified student loans count.

Get Credits On Medical Expenses

Medical expenses tax credit: The medical expense tax credit applies to individuals who have spent extensive amounts of money of medical expenses for either themselves or their dependents. You must qualify for this tax credit before you apply for it. Be sure to check out Revenue Canada’s qualifications beforehand. Enter your medical expenses tax credit amount on Line 330 of your personal tax return. For dependents, enter the tax credit amount on Line 331.

CRA does red flag this section for errors, so be sure to read their guide carefully when it comes to medical expenses.

Cash In On Those Tax Free RRSP Savings

RRSP deduction:January and February are known as RRSP season. Check your Notice of Assessment from CRA for details on how much you are allowed to contribute and deduct this year. If you don’t contribute your max, as most people don’t, don’t worry. RRSP contribution room can be carried forward to years when you make more money. Be sure to keep track of them carefully, though. Enter your contribution amount on Line 208 of your personal tax return.

Related Topics

Personal Finance / Taxes

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