Federal Tax Credits

NON-REFUNDABLE TAX CREDITS:

Non-refundable tax credits reduce tax that would otherwise be payable. Thus, if you do not owe tax, a tax credit is not helpful.

Which tax credits are non-refundable:

The basic personal exemption of $15,000 as well as amounts for age and dependents (if you qualify)

Caregiver amount – for those looking after a disabled or ill person who lives with them.

HOME ACCESSIBILITY CREDIT – for renovations to your home to make it accessible if a family member is disabled.

HOME BUYER CREDIT – for first-time home buyers.

DIGITAL NEWS SUBSCRIPTION CREDIT – for subscriptions to Qualified Canadian Journalism Organizations (QCJO).

ADOPTION TAX CREDIT expenses incurred for adoption of children.

CAREGIVER TAX CREDIT caring for a family member living with you.

DISABILITY TAX CREDIT – for the disabled, can be transferred to a family member living with the disabled individual.

TUITION TAX CREDIT – post secondary, with tuition tax receipts (more information on the Students page).

Also:

DONATIONS:

• The first $200 of charitable donations receives a tax credit of 15%.
• Amounts above $200 are eligible for a 29% tax credit, however, if you are a top tax bracket earner, that credit increases to 33%.
• Spouses (common-law and married) can combine donations and report on one return.

MEDICAL EXPENSES: Tax credit available on amounts spent out of pocket that total more than 3% of your taxable income (maximum threshold for high income earners is $2,635). Claim for the entire family on one return, including post-secondary students who do not need the credit themselves.

FOREIGN TAX CREDITS: For amounts paid to other countries (often on a portion of investment income).

REFUNDABLE TAX CREDITS

Refundable tax credits are paid regardless of whether income tax is payable.

Which tax credits are refundable:

Educator school supplies.

Refundable portion of medical expenses (where expenses are high and income low, a refundable credit may apply).

Canada Workers Benefit – a refundable credit for low-income workers.

Canada Training Credit (CTC) – available if you pay tuition fees. Maximum credit available is shown on your prior year notice of assessment.

This is not an exhaustive list but does cover the credits most often available to our clients.

Ontario Tax Rates for 2023

• $0 to $49,231 of income (5.05%)
• More than $49,231 to $98,463 of income (9.15%)
• More than $98,463 to $150,000 of income (11.16%)
• More than $150,000 to $220,000 of income (12.16%)
• More than $220,000 of income (12.16%)
• The top rate an individual in Ontario can expect to pay, combining both federal and provincial taxes, is roughly 53.53 %.

Ontario also has a Health Tax Premium. In addition to income taxes, you pay the health premium if you are a resident of Ontario, and your employment or pension income is more than $20,000 a year. In most cases the premium is automatically deducted from your pay or pension. If you are self-employed, it will be calculated at the time of tax preparation. The health premium runs anywhere between $300 to a maximum of $900 and is based on taxable income.

Basic Personal Amount

This is the amount of income you may earn before income tax kicks in. In 2023 the basic personal amount increased to $15,000.