Canadian citizens and residents are expected to file their income tax and benefit returns every year. If you are a taxpayer in Canada, this article highlights common applicable deductions and tax credits.
Child care expenses
If you had to go to work, run a business, attend a school program, or carry out research work, and as a result incurred child care expenses, you can claim back some of this cost. Eligible child care expenses may include costs to daycare centres, camps, boarding schools, caregivers, etc. You cannot claim costs for clothing, transportation, leisure, and recreational activities amongst other costs.
It is important to note that you need a receipt for every eligible child care cost you claim and you cannot carry forward unclaimed expenses to another year.
Qualified donees for which you may be able to claim donations in Canada include but are not limited to charities, athletic associations, United Nations, municipalities, housing corporations, etc.
You may be eligible to claim tax credits on donations made to charity in cash or kind, this is applicable to religious organizations. Eligible charities must be registered with the CRA. You can search for registered charity organizations with the CRA here.
If you live or have lived in specific northern cities in Canada for a continuous period of at least six consecutive months within the tax year, you may qualify for the Northern residents deductions.
This tax deduction would increase the returns you get after you file your tax. Some people are not aware of this and miss out on the benefits of living in northern areas.
There are two parts of the residency deduction, basic residency amount and additional residency amount. For each day you live in an eligible northern location, you can claim between $5.5 – $11 per day for the basic and/or additional residency amount.
For example, if you lived in a prescribed northern zone A location such as the Yukon, Northern territories from January 1, 2019 – December 31, 2019, you can claim $11 per day for the 365 days as basic residency amount AND the additional residency amount of $11 per day for 365. This amounts to $8,030 [ $4,015 (basic residency) +$4,015 (additional residency)] claimable under your tax return.
If you live in a prescribed intermediate zone B area such as Fort McMurray in Alberta, the same would apply to you but for an amount of $5.5 per day.
If more than one persons living in the residence address claim the basic residency amount, then no one can claim the additional residency amount but if only one person claims the basic residency amount, that person would be entitled to claim the additional residency amount.
Using the example above, if more than one eligible person living in your household, say your spouse also claims the $11 per day basic tax return then none of you can claim the additional residency amount.
Check your location within your province here to see if you qualify for the Northern residents deductions.
If you moved for work or business-related reasons or for full-time schooling in a post-secondary program and your move got you at least 40km closer to your work or school, you may claim eligible moving expenses paid in the year.
Eligible costs include:
- Transportation and storage costs
- Travel expenses, meals and accommodation
- Temporary living expenses for up to a maximum of 15 days for meals and temporary lodging
- Cost of cancelling your lease
- Incidental costs related to your move
- Cost to maintain your old home when vacant
- Cost of selling your old home
- Cost of buying your new home
The eligible moving expenses you can claim are reduced by any reimbursements of moving allowances you may have received.
Volunteer fighters or search and rescue volunteers
If you were a volunteer firefighter or a search and rescue volunteer and you completed at least 200 hours of eligible volunteer firefighting services or eligible search and rescue volunteer services, you can claim up to $3,000.
Eligible services apply and more information can be found on the CRA website.
Some tuition fees and examination fees for licensing and certification may be claimable. See more information on this here. Some Union or professional dues can also be claimed.
Interest on student loans
You can claim an amount for interest on student loans. This can be carried forward for 5 years and becomes ineligible if the student loan is combined with another type of loan.
First-Time home buyer
If you purchase a qualifying home, you may be eligible for a $5,000 claim through the home buyers amount under the Federal non-refundable tax credits.
The Canadian Revenue Agency (CRA) monitors tax claims and credits, therefore it is very important to obtain and keep supporting documents for any tax deductions you claim on your tax returns.