Newsletters

Most Canadians, understandably, think of our income tax system as a government “program” that takes money out of their paycheques and out of their pockets. And, while it’s certainly true that virtually every Canadian who earns an income must allocate a portion of that income to paying federal and provincial personal income taxes, that’s not the whole picture. Our tax system does, in fact, provide Canadians with a number of direct benefits, through a variety of tax credit and benefit programs which actually put money into the hands of Canadians. And since that money can be obtained with minimal effort (and be received tax-free) it’s a win-win for the recipient.

Most Canadians, understandably, think of our income tax system as a government “program” that takes money out of their paycheques and out of their pockets. And, while it’s certainly true that virtually every Canadian who earns an income must allocate a portion of that income to paying federal and provincial personal income taxes, that’s not the whole picture. Our tax system does, in fact, provide Canadians with a number of direct benefits, through a variety of tax credit and benefit programs which actually put money into the hands of Canadians. And since that money can be obtained with minimal effort (and be received tax-free) it’s a win-win for the recipient.

Those attributes describe the basic child and family benefits paid by the federal government to eligible Canadians throughout each year. However, a substantial number of eligible recipients don’t receive benefits to which they are entitled simply because they haven’t claimed them, leaving potentially hundreds or thousands of dollars in tax-free income unclaimed each year. As well, many Canadians who do receive such benefits but who then fail to claim them annually can see their benefit payments stop, even though they remain eligible to receive those benefits.

While there are quite a number of such benefits, the process of “claiming” each of them is the same – simply filing a tax return each year. Eligibility for those benefits and/or the amount of benefit obtainable is based, in part, on the income of the recipient. When each Canadian files a tax return, the Canada Revenue Agency determines, based on the information provided in that return, the benefits to which the taxpayer is entitled and in what amounts. In making that determination, the income figure used is that from the previous year. In other words, a taxpayer’s eligibility for benefits during the 2025-26 benefit year is based on their income for 2024. And that information was provided to the Canada Revenue Agency on the tax returns for 2024 which were filed by taxpayers earlier this year.

Once the CRA receives the needed income information (usually by April 30, 2025) and determines a taxpayer’s benefit eligibility, those benefits are paid to eligible recipients throughout the 2025-26 benefit year, which starts on July 1, 2025 and ends on June 30, 2026.

It should be noted, as well, that while the federal government refers to these benefits under the umbrella term “child and family benefits”, it’s wrong to conclude that benefits are only available to parents and/or married individuals. Of the three benefit programs outlined below which will be in place during the upcoming benefit year, only the Canada Child Benefit program requires that a taxpayer be a parent, and none of the benefit programs require that a taxpayer be married or in a common-law relationship.

GST/HST Credit

The GST/HST credit is a non-taxable amount paid four times a year (on the 5^th of July, October, January, and April) to lower- and middle-income individuals and families, to help offset the cost of the goods and services tax/harmonized sales tax (GST/HST) that they pay. Generally, the credit is available to Canadian residents who meet any one of the following criteria:

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

The amount of benefit which may be received is determined by both family size and income level. For the upcoming (July 2025 to June 2026) benefit year, the maximum annual GST/HST benefit is as follows:

• $533 if you are single;
• $698 if you are married or have a common-law partner; and
• $184 for each child under the age of 19.

Eligibility for the GST/HST credit for the 2025-26 benefit year is determined automatically by the CRA for each taxpayer who filed a return for 2024. There is, therefore, no need to indicate on the return that the taxpayer is applying for the GST/HST credit.

Detailed information on the GST/HST tax credit can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/goods-services-tax-harmonized-sales-tax-gst-hst-credit.html.

Canada Workers Benefit

The Canada Workers Benefit (CWB) is a refundable tax credit paid to lower-income Canadian residents who are aged 19 or older or are married or have a common-law spouse or child with whom they live, and who have “working income” of at least $3,000 which was earned from employment or self-employment.

The amount of CWB which an individual or family can receive depends on marital status and net income. The basic amounts payable for the 2025-26 benefit year, and the net income levels at which eligibility for that basic benefit is eroded, are as follows.

• $1,633 for single individuals
  The single individual benefit is reduced if adjusted net income is more than $26,855.
• $2,813 for families 
  The family benefit amount is reduced if adjusted family net income is more than $30,639.

In order to apply for the CWB, a recipient must file their tax return electronically and follow the instructions provided for the particular tax return preparation software or, if filing a paper return, must complete and file a Schedule 6 with that tax return.

More detailed information on the CWB can be found at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-workers-benefit.html.

Canada Child Benefit

The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. The CCB is paid to the parent who is primarily responsible for the care and upbringing of the child or children, and the amount varies with the age and number of children.

The CCB is also a means-tested benefit, with the benefit amount being reduced as family net income increases. CCB amounts paid during the 2025-26 benefit year are based on family net income for 2024.

The maximum amounts payable for the benefit year running from July 2025 to June 2026 are as follows.

For each child:

• under 6 years of age: $7,997 per year ($666.41 per month);
• 6 to 17 years of age: $6,748 per year ($562.33 per month).

Where family net income for 2024 is less than $37,487, recipients will receive the maximum amount outlined above for 2025-26, with no reductions.

Individuals and families who may be eligible for the CCB will have their eligibility automatically assessed when they file their tax return for 2024; there is no requirement to file a particular schedule or other application. More information on the CCB is available on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html.

Finally, there is one federal tax credit program – the Canada Carbon Rebate (CCR) – which was received in previous years by many Canadians but is no longer available. The CCR was created to help offset the cost to Canadians of the federal consumer carbon tax, and when that tax was repealed earlier this year, the Canada Carbon Rebate program was also cancelled. The last payment of the CCR was made in April of 2025.

While the number and variety of federal child and family benefits, and the varying eligibility criteria for each, can be confusing, the necessary determinations and calculations are done by the federal government. The only step which need be taken by an individual is the filing of an annual tax return. Taxpayers who wish to find information on the benefits for which they may be eligible (and to obtain an online estimate of the amount of those benefits) can refer to the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits.html, where detailed information on each such benefit is provided.

While it’s unlikely that they do so with any great degree of enthusiasm, the vast majority of Canadians prepare their annual tax return each spring and file that return on time. That’s necessary, because the Canadian tax system is a “self-assessing” one, in which the onus is completely on the taxpayer to ensure that a return in prescribed form is completed and provided to the tax authorities. On that return, the taxpayer provides a listing of income earned during the previous calendar year as well as any claims made for tax deductions and credits. The end result of that process is a determination of the amount of tax owed for the year; any such amount must then, of course, be paid on or before April 30.

While it’s unlikely that they do so with any great degree of enthusiasm, the vast majority of Canadians prepare their annual tax return each spring and file that return on time. That’s necessary, because the Canadian tax system is a “self-assessing” one, in which the onus is completely on the taxpayer to ensure that a return in prescribed form is completed and provided to the tax authorities. On that return, the taxpayer provides a listing of income earned during the previous calendar year as well as any claims made for tax deductions and credits. The end result of that process is a determination of the amount of tax owed for the year; any such amount must then, of course, be paid on or before April 30.

The number of taxpayers who don’t file a return as and when required, or who file a return in which income amounts aren’t reported or incorrect tax deduction or credit claims are made, is, as a percentage of the overall number of tax filers, very small. However, even a very low non-compliance rate of 1% or less still means hundreds of thousands of returns not filed or filed with incomplete or inaccurate information.

There are a number of reasons why taxpayers don’t file a return – sometimes it’s just procrastination, or a lack of knowledge of how and when to get the return filed. In other cases, taxpayers don’t believe that they are required to file a return – for instance, where they have little or no income for the year.

However, in many instances in which taxpayers don’t file a return, it’s likely because taxes are owed and they are unable to pay those taxes on time or in full – or at all. In such situations, it’s tempting to conclude that it’s better not to file in the hope, perhaps, that the CRA will overlook or somehow not notice the delinquency. That’s not, however, a realistic conclusion. Where a Canadian resident earns income, the payor of that income must file an income slip (T4 for employment income, T5 for interest income, etc.) with the Canada Revenue Agency, on which the recipient of that income is identified by name, address, and social insurance number. As well, beginning with the 2024 tax year, e-commerce sites are required to provide the tax authorities with identifying information for individuals who sell goods through those online marketplaces. And, where information provided to the tax authorities doesn’t match up with income reported on a return for the year by the taxpayer (or no return was filed at all), the omission will probably come to light.

Although each such instance of non-compliance can represent lost revenue to the Canadian government, the resources needed to track down each and every such occurrence simply aren’t available, especially since in many cases the amount recovered may be less than the costs which must be incurred to recover that amount.

With all of that in mind, the Canada Revenue Agency provides a program – the Voluntary Disclosures Program (VDP) – intended to encourage non-compliant taxpayers to come forward and put their tax affairs in order. The incentive to do so arises from the fact that in most cases, while taxpayers who participate in the VDP program will still have to pay outstanding tax amounts owed, plus some interest, they can avoid some other interest charges, penalties which would normally be imposed, and the risk of criminal prosecution.

There are five criteria which must be satisfied for an application to qualify for such relief under the VDP. Generally, any such application must:

1. Be voluntary (meaning that it is made before the CRA contacts the taxpayer or initiates any enforcement action related to the information to be disclosed);
2. Be complete (meaning that it includes all relevant information and documentation);
3. Involve the application or potential application of a penalty;
4. Include information that is at least one year or one reporting period past due (as of June 2025 that would include individual income tax returns for tax years up to and including 2023); and
5. Include payment of the estimated tax owing (taxpayers who are unable to do so can request a payment arrangement).

The VDP program includes two separate “tracks” for income tax disclosures – the Limited Program and the General Program – and the kind and extent of relief available depends on the track to which a particular application is assigned.

While the Canada Revenue Agency will ultimately make the determination of whether an application should proceed under the Limited or the General Program on a case-by-case basis, there are guidelines in place. The CRA’s intention is to restrict the Limited Program to instances in which taxpayers intentionally avoided their tax obligations (as distinct from inadvertence), or there is conduct on the part of the taxpayer which amounts to gross negligence. In making its determination of the appropriate track for a disclosure, the factors which the CRA will consider include the following:

• the dollar amounts involved;
• the number of years of non-compliance;
• the sophistication of the taxpayer;
• how quickly the taxpayer acted to correct their non-compliance after becoming aware of it; 
• whether the disclosure was made after the taxpayer became aware of the CRA’s intended specific focus on that particular area of taxpayer compliance; and
• whether efforts were made to avoid detection through the use of offshore vehicles or other means.

Those whose applications are accepted under the Limited Program will be required to pay outstanding tax balances owed, plus interest, and will be subject to penalties. They will not, however, be subject to criminal prosecution and will be exempted from the more stringent penalties which usually apply in cases of gross negligence on the part of the taxpayer.

Taxpayers whose conduct does not consign them to the Limited Program will instead be considered under the General Program. Under that Program, no penalties will be charged and no criminal prosecutions will take place. As well, the CRA will provide partial interest relief for the years preceding the three most recent years of non-compliance. For example, a taxpayer who makes an application to the VDP after having failed to file returns or pay tax owing, or who filed returns which omitted information or included incorrect information, for the 2018 through 2023 taxation years may be provided with partial interest relief with respect to tax arrears owed for the 2018, 2019 and 2020 taxation years. Such relief is generally equal to 50% of interest normally owed – in other words, the taxpayer will be required to pay only half of the interest charges which would otherwise be levied for those years. No interest relief will, however, be provided on tax amounts owed for the three most recent taxation years (2021, 2022, and 2023). Since interest charges levied by the CRA are, by law, higher than current commercial rates (for instance, the rate levied for April, May and June 2025 is 8%) and interest charged is compounded daily, having interest amounts forgiven, even in part, can make a significant difference to the overall tax bill faced by the taxpayer.

The decision to apply to the VDP and to “come clean” about all previous tax transgressions is something that most taxpayers will likely consider with considerable trepidation. Those who are unsure about whether they want to move forward with a VDP application do have the option of using the CRA’s “pre-disclosure discussion service”. As the name implies, that service allows taxpayers to participate in preliminary discussions with a CRA official, on an anonymous basis, to gain some knowledge about the VDP program, the process involved, and the potential relief available.

Whether or not they choose to avail themselves of the pre-disclosure discussion service, taxpayers who decide to apply to the VDP should complete and file Form RC199 Voluntary Disclosures Program Application, which is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc199.html. (While it’s possible to apply to the VDP by drafting a letter to the CRA, using the prescribed form is generally the better approach. Doing so will ensure both that all required information is included and that that information is presented in a format which will be familiar to the CRA officials assessing the application.) Once the application is received, the CRA will check to make certain that it meets all the criteria required for a valid application, and that all of the required information, documentation, and payment have been sent. Once the application has been accepted, the next step is for the CRA to determine the program (Limited or General) to which it should be assigned and the taxation year(s) for which relief is being considered. At each step the taxpayer will be provided with written notice of the CRA’s decisions.

If the decision made is that the application is not eligible for the VDP, the taxpayer will also be advised in writing, with reasons, of the CRA’s decision to deny the application.

Where the decision made by the Agency is one with which the taxpayer disagrees, they are entitled to ask for a second administrative review of the application by the CRA. It is also possible for a taxpayer to ask the Federal Court to provide judicial review of the Agency’s decision. However, a taxpayer who wishes to pursue their application to the extent of filing such a Federal Court application is well advised to obtain legal advice before doing so.

Finally, taxpayers should recognize that the VDP Program can’t be used as a kind of “get out of jail free card” with respect to repeated failures to meet tax filing and payment obligations. The CRA’s expectations are that taxpayers who have benefitted from the VDP will thereafter meet their tax obligations, and a second review will be provided for the same taxpayer only in situations where the second application relates to a different matter than the first, and where the circumstances giving rise to the second application were beyond the taxpayer’s control.

Detailed information on the VDP can be found on the CRA website at https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html. Additional details with respect to the  Program are also outlined in the CRA’s Information Circular IC00-1R6, Voluntary Disclosures Program, which is available on the same website at IC00-1R6 - Voluntary Disclosures Program - Canada.ca.

By mid to late June 2025, most taxpayers have filed their tax return for the 2024 tax year and a Notice of Assessment has been issued by the Canada Revenue Agency outlining the Agency’s conclusions with respect to the taxpayer’s income, tax deduction, and tax credit claims and the amount of tax payable for 2024. Most taxpayers hope for (and in fact do receive) a refund while others are disappointed to find out that they owe additional taxes for 2024 and therefore have a tax bill (on which interest may be accumulating) to pay.

By mid to late June 2025, most taxpayers have filed their tax return for the 2024 tax year and a Notice of Assessment has been issued by the Canada Revenue Agency outlining the Agency’s conclusions with respect to the taxpayer’s income, tax deduction, and tax credit claims and the amount of tax payable for 2024. Most taxpayers hope for (and in fact do receive) a refund while others are disappointed to find out that they owe additional taxes for 2024 and therefore have a tax bill (on which interest may be accumulating) to pay.

A need to pay additional taxes at the time of filing always means that taxes for the prior year have been underpaid. While the only option open to the taxpayer on receiving a tax bill for the 2024 tax year is to pay it in full as soon as possible, a mid-year review of one’s tax situation for 2025 can ensure that a similar result does not arise when the return for 2025 is filed with the CRA next spring.

Many (if not most) taxpayers think of such tax reviews as a year-end exercise, one to be carried out in the last few weeks of the calendar year, in order to take the steps needed to minimize the tax bill for that year. And it’s true that almost all strategies needed to both minimize the tax hit for the current year and to ensure that there won’t be a big tax bill come next spring must be put in place by December 31 (the making of registered retirement savings plan (RRSP) contributions being the notable exception).

Nonetheless, there’s a lot to recommend carrying out a mid-year review of one’s tax situation for the current year, for several reasons, First, by this point in the year, most taxpayers have a good sense of how much income they will earn in 2025, the tax deductions and tax credit claims which they will be able to make, and, perhaps most important, the amount which they have already paid to the CRA for 2025 income taxes, whether through deductions from their paycheque or by instalment payments. As well, doing a mid-year review, instead of waiting until December, gives the taxpayer the chance to put into place any adjustments needed to help ensure that there are no unpleasant tax surprises when the return for 2025 is filed next spring. And, while the deadline for implementing most tax saving strategies may be December 31, it’s also the case that opportunities to make a significant difference to one’s current-year tax situation diminishes as the calendar year progresses.

The first step in doing that review is figuring out how much one’s tax bill for 2025 is likely to be. For most Canadians, income amounts and available deductions and credits don’t vary significantly from one year to the next. Where that’s the case, the amount of tax owed by the taxpayer for 2024 (a figure that can be found on Line 43500 of the Notice of Assessment) is likely to be very close to one’s tax liability for 2025.

Where income for 2025 is likely to be significantly different than that received in 2024, taxpayers can use the tax return preparation software used to prepare the 2024 return to get an idea of how much tax will be payable for 2025. Although the tax brackets and tax credit amounts used by tax return preparation software for 2024 will differ from those in effect for 2025, those differences won’t make a significant difference to the total tax bill. If anything, using 2024 tax return software to calculate the tax bill for 2025 will result in a slight overestimate of that tax bill, owing to the indexation of tax brackets and credit amounts.

After getting a sense of how much tax is likely to be payable for the 2025 tax year, the next step in doing a review is to determine how much income tax has already been paid to the CRA for 2025 (remembering that by this point in the year, approximately one-half of the tax bill for 2025 should already have been remitted to the CRA).

There are two ways of paying income taxes throughout the year. The majority of Canadians (including all employees) have income taxes deducted from their paycheques and remitted to the federal government on their behalf – a process known as source deductions. Taxpayers who do not have income tax deducted at source – which would include self-employed individuals and, frequently, retired taxpayers – make tax payments directly to the federal government (four times a year, in March, June, September, and December) through the tax instalment system.

Where the individual involved pays tax by instalments, the solution is simple. They can simply increase the amount of remaining instalment payments made in 2025 so that the total instalment payments made over the course of this year accurately reflect the total tax payable for the year.

The situation is a little more complex for employees, or anyone who has tax deducted at source. Where a taxpayer finds that source deductions being made will not be sufficient to cover their tax liability for the year (meaning a tax bill to be paid next spring) the solution is to have those source deductions increased. No one likes paying more taxes, but where taxes are owed the only choice involved is to pay them now or pay them later. Spreading out that payment over the rest of the tax year is much less painful than being hit with a large tax bill (as well as interest charges when that tax bill can’t be paid in full and on time) when the return for the year is filed next spring.

Take, for example, an employee who, after filing the return for 2024, received a bill indicating that an additional $1,000 in taxes was owed. Assuming that their income, and the amount of tax deducted from their paycheque don’t change, it’s likely that a similar amount will be owed when the return for 2025 is filed. If that taxpayer is paid biweekly, there will be about 13 paycheques between the end of June and the end of the year. Increasing the amount of tax deducted from those paycheques by about $75 per paycheque will mean that the $1,000 in taxes owing is paid to the Canada Revenue Agency by the end of the year – thereby avoiding that large tax bill when the return for 2025 is filed in the spring of 2026.

To increase the amount of tax deducted from their paycheque, the employee needs to obtain a TD1 form for 2025, which can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later.html. On the reverse side of that Form TD1, there is a section entitled “Additional tax to be deducted”, in which the employee can direct their  employer to deduct additional amounts at source for income tax, and can specify the dollar amount which is to be deducted from each paycheque, on a go-forward basis.

No one particularly likes thinking about taxes at any time of year, but ignoring the issue definitely won’t make it go away. The investment of a few hours of time now, and putting in place any needed adjustments, can mean avoiding a nasty surprise in the form of a large tax bill which must be paid when the return for 2025 is completed and filed next spring.

Regardless of their particular circumstances, Canadians who act as unpaid caregivers for disabled, elderly, or chronically ill relatives carry a heavy physical and emotional burden. The weight of those responsibilities is often made greater by financial stresses, particularly where the situation requires full-time caregiving, to the extent that the caregiver is unable to work outside the home in paid employment. In addition, caring for someone who is disabled or chronically ill often means incurring additional out-of-pocket expenses, whether for medical supplies or equipment, or for making alterations to a home in order to make it possible for the individual being cared for to stay in that home.

Regardless of their particular circumstances, Canadians who act as unpaid caregivers for disabled, elderly, or chronically ill relatives carry a heavy physical and emotional burden. The weight of those responsibilities is often made greater by financial stresses, particularly where the situation requires full-time caregiving, to the extent that the caregiver is unable to work outside the home in paid employment. In addition, caring for someone who is disabled or chronically ill often means incurring additional out-of-pocket expenses, whether for medical supplies or equipment, or for making alterations to a home in order to make it possible for the individual being cared for to stay in that home.

The good news is that there a number of tax deductions, credits, and benefits made available through our tax system to help mitigate the burden of those additional costs. The bad news is that the rules governing which credits or benefits can be claimed and in which circumstances can, unfortunately, be confusing. The complexity of those rules likely means that many caregivers who may be eligible to claim such credits or benefits are unaware that they can do so, or don’t know how to claim those credits and benefits in the most tax-effective way possible.

Generally speaking, the tax credits available to caregivers (and to those for whom they care) can be divided into three categories. The first type of credit is claimable by individuals who have a condition or disability which significantly limits their ability to live, work, or care for themselves without assistance. The second kind of credit is provided to a family member who supports or acts in a caregiving capacity to that ill or disabled individual. Finally, the third category of credit can be claimed, by either the disabled individual or their caregiver, to help offset costs incurred costs for specific purposes related to the need for caregiving.

No matter which credits are or are not available in a particular situation, the first – and perhaps most important – “strategy” to maximize the available tax assistance is for both the caregiver and the person receiving care to file a tax return every year. Disabled individuals are, unfortunately, often among the lowest-income Canadians, and it’s sometimes assumed that where income is low, and no tax is payable, there’s no point in filing a tax return. However, the reality is exactly the opposite. Eligibility for many, if not most, federal tax credits and benefits is based on income, and lower- and middle-income Canadians are the ones most likely to qualify for such benefits. As stated on the Canada Revenue Agency (CRA) website: “[E]ven if you do not owe tax, are tax-exempt, or have no income to report, you should do your taxes every year to avoid missing out on benefit and credit payments and tax refunds. The information from your tax return is used to calculate payments.”

Credits claimable by a person needing care

Disability supports deduction

In many instances, individuals who have some form of disability can nonetheless attend school or engage in paid employment where needed accommodations or supports are provided. Where those supports involve an expenditure on the part of the individual, they may be able to claim a deduction from income for those costs.

The disability supports deduction allows an individual to claim a deduction for any of a specified list of eligible expenses including, for example, the cost of Braille printers, large print-on-screen devices, or voice recognition software. In some, but not all, cases, a prescription and/or certification from a medical practitioner are needed to enable the deduction to be claimed. A full listing of disability supports which can qualify for the deduction, together with detailed information on the disability supports deduction itself, can be found on the CRA website at 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-21500-disability-supports-deduction.html#wb-auto-4.

Disability tax credit       

In monetary terms, the disability tax credit (DTC) is the most significant federal tax credit which can be claimed by a disabled individual. In order to claim that credit, however, it is necessary to first submit an application to the Canada Revenue Agency. That application will include a detailed assessment by a medical professional indicating whether the individual has a medical condition which significantly or markedly restricts that person’s ability to carry out daily activities like walking, dressing, feeding, speaking, or hearing, and that such restriction is likely to last at least 12 months.

The criteria for approval of an application for the DTC are detailed and specific and the wait time to have a decision on an application made by the CRA can be lengthy. However, where such application is approved, the individual can claim a non-refundable tax credit amount of $10,138 (for 2025), meaning that income up to that amount can effectively be received without paying federal tax. As well, the claim for the DTC credit can be transferred, in whole or in part, to one or more family members who support the disabled relative, to reduce their tax payable for the year.

Details of the DTC can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit.html.

Credits claimable by caregivers

There are a number of tax credits which can be claimed by an individual who acts as a caregiver to another family member, or on whom a family member depends for support. Each such credit has its own set of eligibility criteria which must be met, by both the caregiver and the person receiving care or support. Regrettably, the rules governing the interaction of these credits can be very confusing – for instance, in some circumstances claiming a particular credit can mean losing eligibility for a similar credit. As well, eligibility for and the amount of credit claimable can vary depending on several factors, including the age and income of the dependant or person receiving care, as well as the nature of the relationship (i.e., spouse versus non-spouse dependant) between the caregiver and the person receiving care.

The CRA website does include a comprehensive listing of all of the credits which may be claimed by an individual who provides care for or supports a family member. That listing includes details of the eligibility criteria for each credit, the circumstances in which such credit can or cannot be claimed, and how each credit interacts with the others. The full listing on the Agency’s website is as follows.

• Line 30300 – Spouse or common-law partner amount
• Line 30425 – Canada caregiver amount for spouse or common-law partner, or eligible dependant age 18 or older
• Line 30400 – Amount for an eligible dependant
• Line 30450 – Canada caregiver amount for other infirm dependants age 18 or older
• Line 30500 – Canada caregiver amount for infirm children under 18 years of age

Tax credits for home renovation expenses

Home accessibility tax credit

Frequently, when someone becomes ill or disabled, changes must be made to that person’s home in order to enable them to continue living there, or to increase their safety or mobility in that home. Such changes may be as small as a grab bar installed in the shower or as large as a chairlift for the stairs or even a renovation to provide a ground floor bedroom or bathroom. For many such renovations, a home accessibility tax credit can be claimed

In order for any claim for the home accessibility tax credit to be made, the person for whose benefit the changes are being made must be either aged 65 and older or be eligible for the disability tax credit. In order to qualify, the home to which the renovations are being made can be owned by that person or jointly owned by that person and a supporting relative. In all cases, however, the person for whose benefit the renovations are being carried out must live in that home.

Regardless of who owns the home, the credit can be claimed by the elderly or disabled individual or by their spouse. It can also be claimed by another family member who is the individual’s caregiver, as long as that caregiver has claimed any one of a specified list of tax credits for providing support for that person – and that list includes the caregiver tax credit.

Where those eligibility criteria are met, either the person requiring care or their spouse or caregiver can claim a non-refundable tax credit of up to $3,000 for up to $20,000 in eligible expenses incurred during the year, or the credit can be shared among them. Detailed information on eligible expenses and how to claim the credit can be found on the CRA website at 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-31285-home-accessibility-expenses.html.

Multi-generational home renovation tax credit

In some circumstances, an individual who requires family support can no longer live safely in their own home and the solution is often for that person to move in with another family member – usually one of their children. Making that change often means a need to renovate to provide living space for the disabled or elderly individual and, once again, a tax credit can be claimed for eligible expenses incurred to do so. That tax credit – the multigenerational home renovation tax credit – provides a non-refundable credit of up to $7,500 for up to $50,000 in eligible renovation expenses. For purposes of the credit, eligible renovation expenses are those incurred to provide a self-contained secondary housing unit for a relative who is 65 years of age or older, or who is eligible for the disability tax credit. Details of the multigenerational home renovation tax credit can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/multigenerational-home-renovation.html

The availability of support for ill or disabled individuals and/or their caregivers through our tax system is clearly a good thing. However, the sheer number of tax credits and deductions which can be claimed and, in particular, the complexity involved in determining both which credits are available in which circumstances and which credit claims will produce the best tax result can be overwhelming. The CRA has brought together on a single webpage information on each of the different aspects of our tax system which may be utilized by caregivers and their dependants, and that webpage can be found at https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities.html.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.

Corporate:
Issue #71 Corporate

Personal:
Issue #71 Personal