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2013 Canadian Tax Credits

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# Monday, February 25, 2013
Monday, February 25, 2013 9:20:12 PM (GMT Standard Time, UTC+00:00) ( Finance | Taxes )
Once again tax season is upon Canadians, who have until April 30, 2013 to file their returns (self-employed individuals have until June 15 to file their personal returns).

One thing that changes from year to year is the tax credits that should be fully utilized to lower taxable income.

Please use this blog article to find out what credits are available this year.

Family Caregiver Tax Credit

The Family Caregiver Tax Credit is a new, non-refundable credit of 15% on $2,000 for people that are taking care of an infirm dependent. This dependent can be a spouse, common-law partner or a child under the age of 18 years old.

To qualify for this credit the infirm person must have a prolonged impairment and must also depend upon caregiver(s) for assistance with day-to-day activities. In addition you must also acquire a signed statement from a licensed doctor.

Medical Expense Tax Credit

This is a non-refundable tax credit for medical expenses incurred by the taxpayer, the taxpayer's spouse/common-law partner or a child less than 18 years of age who depends upon the taxpayer for support.

If medical expenses are being claimed for a deceased person then a credit can be claimed for any 24 month period, as long as this was not claimed during previous tax years.

Note that all medical expenses are eligible, even those that were incurred outside of Canada.

Children's Fitness Tax Credit

This non-refundable tax credit let’s parents claim up to $500 for expenses incurred when enrolling a dependent (less than 16 years old) into any program that involves physical activity (e.g. sports teams, gymnastics, etc.).

First-Time Home Buyers' Tax Credit

This "Canada Action Plan" incentive allows first time home buyers to get a $750 credit for things such as legal expenses and inspections.

You must apply for this credit within 1 year of purchase of your home, and it is not refundable.

Children's Arts Tax Credit

This is a 15% non-refundable tax credit of up to $500 per dependent. Eligible costs are the registration of a dependent into artistic, cultural, recreational or developmental programs (e.g. music lessons).

Dependents must be:
  • Less than 16 years old at the beginning of the year when the expenses were incurred, or:
  • Less than 18 years old at the beginning of the year when the expenses were incurred if the dependent is eligible for the disability tax credit.

Hiring Credit for Small Business

This tax credit of up to $1,000 is designed to help small businesses by reducing the amount of EI (employment insurance) premiums paid out by an employer.

Small businesses that paid more EI premiums in 2012 compared to 2011 and also paid $10,000 or less in premiums are eligible for the credit.

Note that this credit is applied and calculated automatically when a return is filed.

Textbook Tax Credit

This tax credit helps out students with the cost of textbooks. Students must claim the credit on their own returns, but can transfer any unused portion to a parent, grandparent, common-law partner or spouse.

A student can claim $65/month when in school full-time or $20/month when in school part-time.

Apprenticeship Job Creation Tax Credit

This is a non-refundable tax credit of 10% of salaries or wages that are paid out to eligible apprentices. An apprentice is eligible if it is someone who is working in a prescribed trade during the first 2 years of their apprenticeship.

A prescribed trade is any "Red Seal Trade". For more information see the Interprovincial Standards Red Seal Program.

Tradesperson's Tool Deduction Credit

This credit is applied to eligible tools by a tradesperson that are used to earn income. The maximum that can be claimed by a tradesperson is $500.

Eligible tools (including toolboxes): cannot have been used for any purpose prior to purchase; must be certified by the employer; and cannot be an electronic device unless that device is used to measure, locate or calculate something.

Tax-Free Savings Account (TFSA)

This is not a credit, rather is a flexible, registered savings mechanism that lets Canadians earn tax-free investment income. The maximum amount that can be invested is $5,500 annually (as of January 1, 2013).

Note that:
  • Withdrawals from a TFSA are tax free.
  • Unused, previous portions accumulate moving forward.
  • Contributions are NOT tax deductible.

Universal Child Care Benefit (UCCB)

This is a credit of $100/month for every child less than 6 years old, and helps to offset childcare costs.

Canada Employment Credit (CEC)

This is a credit used to help with employee work-related costs. All Canadian employees are eligible for this credit, which is 15% of $1,095 of income for the 2012 tax year.

Public Transit Tax Credit

This tax credit lets you claim 100% of the money you spent on public transit (e.g. passes).

Note that if you are reimbursed by your employer for your travel costs then the amount claimed must be decreased by the amount you were reimbursed (unless the amount of reimbursement is included as part of you income (e.g. a taxable benefit).

Volunteer Firefighters' Tax Credit

This is a 15% non-refundable tax credit on $3,000 for volunteer firefighters. In order to qualify the firefighter must have put in a minimum of 200 hours of service during the year.

Conclusion

We hope you found this blog article helpful. Make sure that you take advantage of all the credits you can get!