Claiming Refundable Tax Credits

No income? File a tax return anyway. You’ll need to do that to receive income supplements from the government, often paid monthly or quarterly, including federal tax credits like the Canada Child Tax Benefit, GST/HST credit or the Universal Child Care Benefit.

Approximately 35% of all returns filed in Canada are not taxable. Millions of others have net income levels low enough to qualify for full or partial refundable tax credits, so be sure to file even if you have no income.

Eligibility for Refundable Tax Credits

Refundable tax credits can be received from the federal government, and in some cases, provincial governments. The following people may not claim refundable credits:

• Those confined to a prison at the end of the year and so confined for six months or more.
• Those who died during the year.
• Diplomats who are not taxable in Canada.

Teenagers Should File for GST/HST Credits. Typical first-time credit filers are 18-year-olds who file for the federal GST/HST Credit, which they will receive the quarter after they turn 19, and at-home single mothers who file for the CCTB and the GSTC.

Filing a Return is Easy. If a GST/HST Credit filer has no income at all to report, filing a return is as simple as counting to five:

1. Enter the taxpayer identification information.
2. Answer the citizenship and Elections Canada questions and address the foreign property lines.
3. Check yes under the GST/HST Credit application in the last box on Page 1 (your software may do this automatically for you).
4. Your software will enter zeros on the key income lines: 150, 236, 260.
5. Your software will determine the amount of credit available to the taxpayer. This will show up on the tax summary as well.

Excerpted from Jacks on Tax. © Knowledge Bureau, Inc. All rights reserved.