GST/HST Credit

Could you use a little extra money to help cover the taxes on the products and services you buy?

That's what the Goods & Services Tax Credit/ Harmonized Sales-Tax (GST/HST Credit) is for!

The GSTC is designed especially for individuals and families with lower or modest income. It is based on family net income for the taxation year. It is normally paid in four equal instalments over the year; in July, October, January and April (normally due on the 5th of the respective month) However, if the amount is less than $50 per quarter, the CRA will make a one-time payment in July. The CRA will also pay GSTC amounts owed from the previous 3 years, provided the taxpayer files an income tax return and is eligible for this credit.

In the case of married or common-law couples, only one spouse can receive this credit. The credit goes to the spouse whose return is assessed first. Regardless of who receives it, the credit will be the same as it is based on net family income. Any changes in marital status must be reported to the CRA immediately as this will affect past and future credit amounts.( RC65)

Each quarterly payment is based on the taxpayer's current family situation; marital status, number of eligible children, and residency status. If the family situation changes at any time during the year, the taxpayer must inform the CRA as soon as possible so that past/future payments can be adjusted based on the new family size, marital status, and income.

Who can apply?

Taxpayers who are residents of Canada can apply each year through the filing of income tax returns. At the beginning of each quarter, when the CRA makes payments,the taxpayer:

Is 19 years of age or older

If under 19 years of age, he/she is eligible only if:

The taxpayer is (or previously was) a parent

The taxpayer has (or previously had) a spouse

Note: To receive this credit, an individual who is turning 19 on or before April 1, 2022 should file a 2020 tax return, even if his/her income is nil.

An individual does not qualify for this credit if, at the beginning of the month in which the payment is issued:

The individual is confined to a prison (or a similar institution) and has been there for 90 days or more

The individual is not required to pay tax in Canada because they are an officer or a servant of another country, such as a diplomat or they are a family member or an employee of diplomats

Can I claim this credit for my child?

GSTC can be claimed for each dependent child:

Under the age of 19

Who has never had a spouse or a common-law partner

Who has never been a parent

Who either lived with or was claimed as a dependent by a taxpayer or a taxpayer’s spouse at the beginning of the month in which the CRA makes payments

The child must also be a Canadian resident

Do you work from home during COVID-19?

Many Canadians found themselves working from home in 2020 and, for some, going forward indefinitely. When preparing your tax return for the upcoming year, it is essential to consider tax implications of working from home.

You have the option to use a flat rate method [i.e., $2 per day towards home office expenses (maximum deduction- $400) Form T777S]. This claim does not require form T2200 nor supportings required to be kept. Here, the condition is that the employee works 50% of time at home for a period of at least 4 consecutive weeks (part time or full time).

New residents

Through filing form RC151, new residents can apply for this credit, even if no tax return is filed. It is advisable to file this form at the earliest, as the CRA does not pay retroactively.

Direct Deposit

It is suggested to set up a direct deposit with the CRA in order to receive this credit on the due date and to avoid the possibility of cheque(s) getting lost, or not received, due to change of residence.

The Ontario Government provides tax relief for low income taxpayers with their own provincial tax credits called the Ontario Trillium Benefit (OTB).

Keep a little more in your pocket with the GST/HST credit!

For additional information on GST/HST credits, please visit : Learn More