As Canadians prepare to file their 2012 taxes, the Canada Revenue Agency (CRA) has published a list of benefits and credits that can help families and businesses with their expenses throughout the year and reduce the amount they owe at tax time.
Since 2006, the government has introduced several tax relief measures through Canada’s Economic Action Plan, the latest being the family caregiver tax credit, which can be claimed this year for the first time.
Apprenticeship Job Creation Tax Credit: Provides employers with a tax credit of up to 10 percent of the eligible wages payable to eligible apprentices. The maximum credit an employer can claim is $2,000 per year for each eligible apprentice.
Canada Child Tax Benefit: A tax-free monthly payment that helps eligible families with the cost of raising children under the age of 18. To find out if you qualify for this benefit as well as others, use the CRA’s online benefit calculator.
Canada Employment Credit: A 15 percent non-refundable tax credit on an amount of $1,095 in employment income. The CEC was introduced to recognize employees’ work expenses for items such as home computers, uniforms, and supplies.
TFSAs have become increasingly popular, with approximately 8.2 million Canadians having opened an account and roughly 2.5 million contributing the maximum in 2011.
Children’s Arts Tax Credit: Did your children participate in a program of artistic, cultural, recreational, or developmental activity in 2012? If so, you may be able to claim up to $500 of the money spent per child on these activities for a non-refundable tax credit of up to $75 for each child. You may claim an additional $500 for each eligible child who qualifies for the disability amount and for whom you have paid a minimum of $100 on registration or membership fees for an eligible program.
Child Care Expenses: Did your children attend daycare or a program such as a summer day camp in 2012? You or your spouse or common-law partner may be able to claim what you spent on eligible child care in 2012.
Child Disability Benefit: You may be eligible for this tax-free benefit if you cared for a child under the age of 18 who is eligible for the disability tax credit.
Children’s Fitness Tax Credit: Did your children play soccer, take ballet classes, or participate in a program of physical activity in 2012? If so, you may be able to claim up to $500, per child, of the cost of these activities for a non-refundable tax credit of up to $75 for each child. You may claim an additional $500 for each eligible child who qualifies for the disability amount and for whom you have paid a minimum of $100 in eligible expenses.
Disability Tax Credit: If you or a family member has a severe and prolonged impairment in physical or mental functions, you may be able to claim this non-refundable tax credit.
Family Caregiver Tax Credit: This is a 15 percent non-refundable tax credit on an amount of $2,000 that provides tax relief to caregivers of infirm dependent relatives. This includes, for the first time, infirm spouses, common-law partners, and minor children.
First-Time Home Buyers’ Tax Credit: Assists first-time home buyers with the costs associated with the purchase of a home, such as legal fees.
Goods and Services Tax/Harmonized Sales Tax Credit: The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset all or part of the GST or HST that they pay.
Hiring Credit for Small Business: Small businesses that meet certain criteria and paid more in Employment Insurance premiums in 2012 over 2011 are eligible for this credit, which puts up to $1,000 back into the accounts of job creators.
Home Buyer’s Tax Credit: Did you buy a home in 2012? You may be able to claim a non-refundable tax credit of up to $750 for the purchase of a qualifying home.
Medical Expense Tax Credit: In order to fully recognize the medical and disability-related costs incurred by caregivers, the government has removed the $10,000 limit on the amount of eligible expenses a caregiver can claim in respect of financially dependent relatives.
Public Transit Tax Credit: Did you or your eligible dependent use public transit in 2012? You may be able to claim the full cost of certain public transit passes or electronic payment cards under this non-refundable tax credit.
Registered Retirement Savings Plan: If you saved for your retirement in 2012 by investing in RRSPs, you may be able to deduct your contributions to reduce your tax.
Registered Disability Savings Plan: An RDSP is a savings plan to help Canadians with disabilities and their families save for the long-term financial security of a person who is eligible for the disability tax credit.
Tax-Free Savings Account: Allows all Canadians to earn tax-free income through a range of investment products. TFSAs have become increasingly popular, with approximately 8.2 million Canadians having opened an account and roughly 2.5 million contributing the maximum in 2011. The maximum people can contribute to their TFSAs annually is $5,500.
Textbook Tax Credit: In order to better recognize the cost of textbooks, this credit provides increased tax relief to students in addition to the Tuition and Education Tax Credits. Students must first claim their credit on their own returns, but may be able to transfer unused amounts to a parent, grandparent, spouse, or common-law partner.
Tradesperson’s Tool Deduction: Allows tradespeople to deduct from their income part of the cost of tools purchased throughout the year.
Universal Child Care Benefit: Gives families with young children more choice in child care by providing $100 per month for each child under age 6.
Volunteer Firefighters’ Tax Credit: Available to any volunteer firefighter who serves at least 200 hours per year at one or more fire departments in their community.
Working Income Tax Benefit: Working individuals and families with low income may be able to claim this refundable tax credit. The WITB includes a supplement for individuals who qualify for the disability amount. Eligible individuals and families may also apply for advance payments.
The CRA notes that those who file their return online and use direct deposit will, in most cases, receive a refund in as little as eight days, compared to four to six weeks for a paper return.
For more information go to www.cra.gc.ca/getready
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