| Year | Federal | Provincial |
|---|---|---|
2021 |
13,808 (for taxpayers with a net income of $150,473 or less) |
$10,880 |
2022 |
14,398 (for taxpayers with a net income of $155,625 or less) |
$11,141 |
2023 |
15,000 (for taxpayers with a net income of $165,430 or less) |
$11,865 |
Registered Retirement Savings Plan
- An RRSP deduction is the maximum amount that a taxpayer can invest
in a retirement account and deduct from that year’s income tax. - Contribution can be done upto the RRSP room as per the Notice of
Asssessment which is 18% of a tax payer’s pre-tax earned income of the
previous tax year. - For excess contributions you have to pay a tax of 1% per month on
excess contributions that exceed your RRSP/PRPP deduction limit by
more than $2,000 unless you withdrew the excess amounts. contributed
to a qualifying group plan. - Any withdrawals from your RRSP are immediately subject to
withholding tax. If you withdraw up to $5,000, the withholding tax rate
is 10%. If you withdraw between $5,001 and $15,000, the withholding
tax rate is 20%. If you withdraw more than $15,000, the withholding tax
rate rises to 30% - Source:Registered Retirement Savings Plan (RRSP) – Canada.ca
Donation
- This is a non-refundable tax credit. As such, it can only be used to reduce
tax owed; if you don’t owe any tax, you don’t get a refund. - donations made by December 31 of the applicable tax year;
- any unclaimed donations made in the previous five years can be claimed
only once. - You can transfer your donation credits to you spouse or common law
partner. - To claim your credit, report it on your federal and provincial tax return.
As a rule, at the federal level, your credit will be 15 percent of the first
$200 of donations and 29 percent of your additional donations. The
credit can reach under certain rules 33 percent if you are in the highest
tax bracket. - Source:Claiming charitable tax credits – Canada.ca
Medical Expenses & Home Accessibility Tax Credit (HATC)
- Medical expenses for the taxpayer, the taxpayer’s spouse or common-law partner, and dependent
children under 18 are claimed on line 33099 of the federal tax return.. - Only expenses in excess of the lesser of $2,397 for 2020 ($2,421 for 2021) or 3% of line 23600 net
income can be claimed for the federal tax credit. - HATC: The HATC applies to the total qualifying expenses, up to a maximum of $10,000 per year.
The credit is at the lowest personal tax rate of 15%, so the maximum tax reduction per year is
$1,500 ($10,000 x 15%). - Source:Home accessibility tax credit (HATC) – Canada.ca
First Time Home Buyer (HBP)
- A first time Home Buyer through the HBP program can withdraw upto $35000 from your RRSP
tax free to put forward to buy the first home. - This applies to withdrawals made after March 19, 2019.
- You have upto 15 years to repay to your RRSP, Pooled Registered Pension Plan(PRPP) or
Specified Pension Plan (SPP) the amounts withdrawn from RRSP under the HBP - The repayment period starts the second year after the year when you first withdrew the funds
from your RRSP/PRPP/SPP. - For example, if you withdrew funds in 2020, your first year of repayment will be 2022.
- Source :Buying a home – Canada.ca
First Home Savings Account (FHSA)
- Life Time Contributions would be $40,000
- Annual Contribution Limit $8,000
- maximum of $8,000 unused contribution room can carry forward to the following year.
- The account can stay open for a maximum 15 years4 or until the end of the year you turn 71
- Annual contribution limit does NOT carry forward.
- Contributions are a tax deduction and will lower taxable income.
- Withdrawals for a first-time home purchase are tax free.
- Eligibility: Must be a citizen or resident of Canada
- Must be over the age of 18
- Must not have lived in a home they owned in the year the account is opened
- Must not have lived in a home they owned during the preceding four calendar years
- Must not have used the FHSA in the past
- Must close the account within 15-years
- FHSA can be combined with the RRSP HBP of $35,000, providing as much as $75,000 for a first home
purchase - Withdrawals from the FHSA that are not used for a first-time home purchase are considered taxable
income, just like RRSP withdrawals
Home Credit
- You can claim $10,000 ($5,000 for Tax years prior to 2022) for the purchase of a qualifying home in the year
if both of the following apply: - You or your spouse or common-law partner acquired a qualifying home
- you did not live in another home owned by you or your spouse or common-law partner in the year of
acquisition or in any of the four preceding years (first-time home buyer) - Source:Line 31270 – Home buyers’ amount – Canada.ca
Care Giver Credit
- For your spouse or common-law partner, you may be entitled to claim an amount of $2,273 in the
calculation of line 30300. You could also claim an amount up to a maximum of $7,276 on line 30425. - For an eligible dependant 18 years of age or older (who is a person for whom you are eligible to make a
claim on line 30400), you may be entitled to claim an amount of $2,273 in the calculation of line 30400. You
could also claim an amount up to a maximum of $7,276 on line 30425. See the note below. - For an eligible dependant under 18 years of age at the end of the year (who is a person for whom you are
eligible to make a claim on line 30400), you may be entitled to claim an amount of $2,273 in the calculation
of line 30400 or on line 30500 for your child. See the note below. - For each of your or your spouse’s or common-law partner’s children under 18 years of age at the end of the
year, you may be entitled to claim an amount of $2,273 on line 30500. See the note below. - For each dependant 18 years of age or older who is not your spouse or common-law partner or an eligible
dependant for whom an amount is claimed on line 30300 or on line 30400, you may be entitled to claim an
amount up to a maximum of $7,276 on line 30450. - Source: The new Canada caregiver credit – Canada.ca
Education Tax Credit
- Generally, a course taken in 2020 at an institution in Canada will qualify for a tuition tax credit if it was either:
- taken at a post-secondary education institution
- for individuals 16 years of age or older at the end of the year, who are developing or improving skills in an occupation and the
educational institution has been certified by the Minister of Employment and Social Development Canada - Fees paid by an individual to a post-secondary educational institution in Canada (that provides courses at a post-secondary level) or,
fees paid by a deemed resident of Canada, to a post-secondary educational institution outside Canada (that provides courses at
a post-secondary level), for courses that are not at the post-secondary school level are eligible for the tuition tax credit if the following
conditions are met: - If a student’s employer pays or reimburses tuition, the student is not eligible to claim the credit unless the employer includes the
tuition amount in the student’s earnings. This is also true if an employer pays tuition to a parent on a student’s behalf. - Examination fees paid to an educational institution, professional association, provincial ministry or other similar institution, to take
an occupational, trade or professional examination that is required to obtain a professional status recognized by federal or provincial
statute, or to be licensed or certified as a tradesperson, to allow you to practice the profession or trade in Canada, may be eligible for
the tuition tax credit. - Ancillary fees or charges exceeding $250 and paid in respect of an occupational, trade, or professional examination are not eligible
tuition fees unless they are required to be paid by all individuals taking the examination. - Calculating and Claiming Tuition Tax Credits
- As a non-refundable credit, if the tuition amount is greater than the tax owed, the non-refundable credit can only be used to reduce or
eliminate the student’s federal/provincial tax bill but won’t generate a refund. If you aren’t able to use the full amount of the credit,
any unused credits can be carried forward to a future tax year, or transferred to a spouse/common-law partner or
parent/grandparent.
Calculating and Claiming Tuition Tax Credits
- Tuition Credit Documents
- Colleges, universities and other accredited education institutions issue a T2202 –
Education & Textbook Amounts Certificate to certify that a student took eligible courses
of suitable duration to qualify for the tuition tax credit. - A student who is entitled to the disability credit and is enrolled in a qualifying educational
program on a part-time basis is entitled to receive the credit as though he/she were a
full-time student by submitting a certified letter from a medical practitioner about the
student’s mental and physical impairment. Only the student completes Schedule 11, which
calculates tuition. - Education and textbook tax credits that were eliminated on January 1st, 2017 can still be
carried forward and claimed when needed. - Transferring Unused Credit Amounts
- Unused tuition credits calculated on Schedule 11 can be transferred to qualifying relatives.
Spouses and common-law partners, parents and grandparents — including those of your
spouse or partner — can be designated for all or part of the transferred amount.
