By now, most Canadians will have received their income tax slips from their employers. This year’s Canada Revenue Agency (CRA) filing deadline for 2022 taxes is May 1.
Personal income tax credits are listed online by the CRA, and there is also an online overview of child and family benefits parents may wish to review as they do their taxes.
Among a host of old tax credits, Gerry Vittoratos, a national tax specialist at online tax filing service UFile, has four new lesser-known credits people may wish to be aware of.
New tax credits to consider for 2022:
Home Buyer’s credit
Credit for individuals who buy what the government considers a “first home” (did not live in a home you owned in the current year and the three prior years) in the tax year. This credit has doubled from $5,000 (actual credit of $750) to $10,000 (actual credit of $1,500).
Home accessibility tax credit
Credit for renovation expenses incurred to make a home more accessible — such as railings in a bathroom, wheelchair ramps, etc. — for a disabled individual (officially recognized by the CRA) or an older adult 65 years and older. The maximum amount of expenses has doubled from $10,000 to $20,000.
Labour Mobility Tax credit
Tradespeople who work in the construction sector and incur out-of-pocket travel expenses to get to and stay at a work site their employer did not reimburse can claim a deduction for these travel expenses up to a combined maximum of $4,000. To be eligible, the travel must be at least 150 kilometres from their home to the work site.
Immediate expensing of depreciable properties (businesses)
Businesses that purchase depreciable assets can fully expense the cost of these assets against their business income (100% depreciation rate). Ordinarily, these businesses would be limited to a certain percentage of the cost of those assets as an expense (For example, equipment can be claimed at 10% of the cost as an expense the first year and 20% every subsequent year). This is a temporary measure applicable until 2024.
Common tax credits to consider:
Basic personal amount
Every Canadian resident is eligible for this credit, which for 2022 is set at $14,398 (the actual credit is 15% of the basic personal amount, or $2,160). In essence, we are not taxed on the first $14,398 of income that we gain in the year due to the first tax bracket being set at 15% as well. The credit is progressively reduced to $12,719 (actual credit of $1,908) if your taxable income exceeds $155,625.
Medical expenses credit
You can claim any eligible medical expenses you incurred as a credit. The amount you can claim is reduced by 3% of your net income for the year, up to a maximum reduction of $2,469. The expenses can range from prescription drugs to fees for medical practitioners.
Donations credit
Any donation to registered charitable organizations can be claimed as a credit. The credit is 15% on the first $200 donated and 29% for any donations above $200. The credit is capped at 75% of your net income, and any amount you don’t need to reduce your federal tax to zero can be carried forward to the next five years.
Canada Employment Amount
If you have employment income, you can claim the lesser of $1,287 (actual credit of $193) or your employment income earned in the year as a credit.
Pension income amount
If you received what the government considers eligible pension income (RRSP/RRIF if you’re over 65, RPP), you can claim the lesser of $2,000 (actual credit of $300) or the eligible pension income as a credit.
Unique tax credits not to be forgotten, according to the CRA:
Digital news subscription expenses
You can claim up to $500 for amounts you paid in 2022 for qualifying subscription expenses.
Childcare expenses
You can deduct expenses for childcare from your gross income if you incurred those costs to earn income, carry on a business or research or attend school.
Disability support credits
Individuals who have an impairment in physical or mental functions and have paid for certain medical expenses can, under certain conditions, claim the disability supports deduction.
Moving expenses
If you moved to work or to run a business at a new location, or you moved to study courses as a full-time student enrolled in a post-secondary program at a university, a college, or another educational institution, you can deduct moving expenses. The new home, however, must be 40 kilometres closer to your new location. More details can be found online.
COVID-19 work-from-home credits
There is one of two types of credits you can apply for if you worked more than 50 per cent of the time from home for at least four consecutive weeks in the year due to the COVID-19 pandemic: You can take a $2 per day flat rate or calculate your home expenses. More details are found online.
