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Tax Credits and Deductions You May Not Have Known About

General Mark Goode 10 Feb


With many Canadians are experiencing strains caused by the increased cost of living and inflation. Claiming tax credits can help offset the financial burden by putting extra money back in your pocket.

Below, is some of the top credits and deductions that you may be able to claim on your income tax return to help you save money.

Top government tax credits and deductions for this tax season

Some tax credits are offered automatically and applied based on the information you provide in your tax returns. However, you must manually apply for other tax credits (such as the Canada Child Benefit or home office tax credit) when filing your returns.

  1. The caregiver tax credit

If you’re caring for a spouse or family member suffering from a mental or physical impairment, you may be able to claim certain expenses with the Canada caregiver credit. To be eligible, you would have to be able to prove that you’re a caregiver for:

  •  Either your or your spouse’s child or grandchild
  •  Either your or your spouse’s parents, grandparents, siblings, aunt, uncle, niece, or nephew

The dependent must also have lived in Canada for the year you claimed the credit.

  1. Home office tax credit (even if you’re an employee)

Working from home is more common than ever, but it also comes with expenses, such as:

  •  Increased power usage
  •  Increased internet data usage
  •  Creating a dedicated office space in your home

Many of these additional expenses can be claimed as a tax credit. You can even claim certain office supplies.

  1. Moving expenses tax deduction

Moving to another province or city can come with a host of expenses, such as:

  •  Truck rental
  •  Fuel
  •  Renting storage units
  •  Paying movers

Both employees and self-employed workers can qualify for this tax credit.

4. Capital loss tax deduction

The stock markets performed poorly in 2022, and many Canadians lost money on their investments. The good news is that you can claim these losses against your other capital gains for the year.

Capital loss tax credit can reduce your capital gains tax liability.

If you’ve reduced your capital gains tax liability to $0, you can save the unused capital loss tax credit and apply it to future years. (or up to three years prior).

To apply a capital loss to a previous year:

  •  You need to file an amendment to your tax return for the year in which you incurred the capital loss.
  •  You can only apply the capital loss to a year in which you had capital gains.
  •  The capital loss will reduce the amount of capital gains you had in that year, potentially resulting in a lower tax liability.
  •  To apply a capital loss to a future year:
  •  There is no need take any action in the year you incur the capital loss.
  • Capital loss can be used to offset capital gains in future years until the capital loss is fully used up.
  •  You must claim the capital loss in the year you want to use it to offset capital gains.
  1. GST/HST tax credit

The GST/HST sales tax credit is automatically paid to eligible Canadians on a quarterly basis (every three months). A person is eligible for this credit based on their income that was reported the previous tax year and is reassessed on an annual basis.

  1. Canada child benefit (CCB)

The CCB is a monthly payment issued by the CRA to parents or guardians of children under 18 years old to help with the costs of raising children. The amount you’ll receive depends on your reported income, your living situation, and the number of dependent children you’re caring for.

The federal CCB payment may also be combined with provincial child tax credits as well, which can increase the amount you’re eligible to receive.

Bonus tip : if you’ve already used tax credits to reduce your income tax liability to $0, then you might be able to transfer a certain amount of your unused tax credits to your spouse or common law partner to help them reduce their taxes.


Government credits often go unclaimed

Canadians can file their income tax returns by paper or online using NETFILE-certified tax software. Some of these programs can help you figure out what tax credits you may be eligible for.

It may be a good idea to consider hiring an accountant to help you file, if you’re unsure which tax credits you may be eligible for.

Source: CTV News