What tax refunds and benefits am I eligible for?

Understanding Your Benefits and What Tax Refunds You Are Eligible For: The Simple Guide to Improving Your Economic Well-being

Benjamin Franklin once said “In this world nothing can be said to be certain, except death and taxes”. His point remains as relevant today as it was in the 18th century, everybody hates taxes (except the government), and the only good tax is a tax refund. Whether you are familiar with the different tax refunds and benefits or you are completely new to the exciting world of taxation, this article will provide some basic information and other details for you to consider.

Government printed cheques becoming obsolete

Before we go over some of the different tax refunds, we need to comment on the phasing out of government cheques.

As part of its sustainable development strategy and with the aim of becoming more fiscally responsible with tax payer’s money, the Canadian government has embarked on a three year plan to phase out printed cheques completely. The initiative which is expected to be completed by April 1, 2016 will see individuals and businesses receive their payments via direct deposit through their financial institution.

Individuals and businesses can request direct deposit for the following tax refunds:

1. Goods and Services/Harmonised Sales Tax (GST/HST)
2. Working Income Tax benefit (WITB)
3. Canada Child Tax Benefit (CCTB)
4. Universal Child Care Benefit (UCCB)

Individuals can request for direct deposit through the Canada Revenue Agency (CRA) in three ways:

1. Online if you are registered for ‘My Account’
2. By mail, simply fill out the Direct Deposit Enrolment Form and mail it to the address as indicated on the form
3. By telephone, call 1-800-959-8281

The advantage for you is that you get your money immediately without the hassle of having to line up at your bank but the most important is potentially all the trees you could save! Additionally, registering for a ‘My Account’ with the CRA allows you to view your tax refund amount or balance owing, account balance, benefits, tax free saving accounts and access to a multitude of different forms and services which in turn quickens your applications and prevents you from having to mail out physical application forms.

You can register for a “My Account” at the CRA website http://www.cra-arc.gc.ca/myaccount/

Also make sure to check out the Service Canada website, it’s your one stop destination for personalized access to the Government of Canada services, benefits and other tax related information.

Income Tax Refund- T1 General Personal Return

The personal income tax return is filed by using the T1 form in which you must file your total income, including foreign income for the tax year. Several different types of income are not taxed including winnings from gambling or betting, inheritances and gifts, war disability pension, and the Canada Child Tax Benefit (see below).

The Canadian Government since 2009 have collected nearly four times more revenue derived from personal income taxes than from corporate income taxes. Does that sound even remotely justifiable? Make sure to focus on getting your tax return right in order to maximize your tax refund by using tax software or seek a tax professional

The due date to submit the T1 is April 30th of the following year or June 15 for self-employed individuals. The government is encouraging more Canadians to file their T1 online through both the CRA and Service Canada website.

If you registered for My Account as suggested above, you can also check the status of your tax refund online, make changes to your return and set up a preauthorized payment plan if you have balance owing.

Ontario Trillium Benefit

The Ontario Trillium Benefit (OTTB) is a combination of three tax credits amalgamated into one, which include the Ontario Sales Credit, Ontario Energy and Property Tax Credit, and the Northern Ontario Energy Credit.

As a result of the recent proposal in the 2013 Ontario budget, there has been one major change for those who qualify for the OTB. Individuals now have the option to receive one single payment in July or receive it in installments on the 10th of each month. You can do this by simply checking off the box on your tax returns.

Remember that eligibility for the OTB can change from year to year depending on a variety of different factors from changes in income, age, family status and location. Make sure that you apply for it every year on your tax returns.

GST Credits

 The GST tax credit is issued on a quarterly basis throughout the year and is  designed to help low and modest income families and individuals.

 In order to be eligible for the tax credit you must first and foremost be a resident  of Canada and that you meet one of the following conditions:

1. You are 19 years of age or older before the month in which the government makes a payment;
2. You have (or previously had) a spouse or common-law partner; or
3. You are (or previously were) a parent and live (or previously lived) with your child.

New residents of Canada can also apply for this credit by using this RC-151 form

In order to receive this benefit you must file an income tax and benefit return (see above).

Canada Child Tax Benefit (CCTB)

The Canada Child Tax Benefit is a tax free monthly payment that is open to families to help them with the cost of raising children that are under the age of 18. The CCTB may also include the national child benefit supplement which is another benefit made eligible for low income households. Additionally, it can also include the Child Disability Benefit which is for households who care for children that have physical and mental impairments.

In order to be eligible, all of the following conditions must be met:

1. you must live with the child, and the child must be under the age of 18;
2. you must be primarily responsible for the care and upbringing of the child;
3. you must be a resident of Canada; and
4. You or your spouse or common-law partner must be a Canadian citizen, a permanent resident, a protected person, or a temporary resident who has lived in Canada for the previous 18 months, and who has a valid permit in the 19th month.

You may apply by using the Form RC66, Canada Child Benefits Application

Universal Child Care Benefit

The universal child care benefit is part of the Federal government’s Universal child care plan. It is designed to provide financial assistance to families with children less than six years of age. It is paid in installments of $100 a month per child, equating to $1200 a year.

Eligibility for the UCCB is automatically processed when you apply for the Canada Child Tax Benefit. If you are not eligible for the CCTB then you may apply for the UCCB by using the same RC 66 Form as the CCTB.

For further details and additional information regarding any of these tax refunds, please check out the Canadian Revenue Agency website. If you prefer, you may contact a CRA advisor directly to find out specifically what other benefits and deductibles you may be eligible for. Remember, that all of these smaller benefits and rebates can significantly contribute to your overall tax refund.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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