5 Big Changes You Need To Know About At Tax Time This Year, According To An Expert
There are new ways to save money this year. 💰
The Canada Revenue Agency (CRA) has made a few changes to some key tax benefits and credits this year that could help you save more money at tax time.
To help parse out these new situations that could affect your upcoming tax return, Narcity spoke with tax expert Gerry Vittoratos from UFile.
He broke down what exactly is going on with these changes and how they could impact Canadians. Here's everything you need to know:
Canada workers benefit
Starting off, the Canada workers benefit (CWB) is a benefit for low-income workers in Canada to help give them a bit of extra cash. This year it's "been enhanced by increasing the 'phase-out' thresholds," said Vittoratos.
"The credit is setup to get reduced progressively the more income you make, and eventually gets wiped out," continued the tax specialist.
"What this means is more workers will be eligible for the credit, and workers already eligible will likely get a higher amount of the credit."
With this new phase-out plan, the government also has a "secondary earner exemption."
"Which allows the spouse or common-law partner with lower working income to exclude up to $14,000 of their working income in the calculation of the credit," explained Vittoratos. "This will also result in more couples being eligible for the CWB or get a higher amount if they’re already eligible."
Eligible educator credit
Along with this benefit for Canadian workers is a more specific benefit for educators that is seeing some revision this year.
The eligible educator school supply tax credit allows elementary and secondary school teachers, and other eligible educators, to claim back up to $1000 of what they spent on school supplies out of their own pocket.
What's new? Well, according to our tax wizard, the tax credit has increased from 15% to 20%, with that same total claim cap of $1000.
"Therefore, the maximum amount you can claim goes from $150 to $250," said Vittoratos.
Along with that, the removal of the requirement that the supplies must be used in a school or a childcare facility means that things like calculators, external hard drives, webcams, headphones, speakers and a whole lot more are now eligible to be claimed.
Climate action incentive
The climate action incentive is also getting a major revamp. It will no longer be delivered to you as a credit on your tax return.
"Starting July 2022," explained Vittoratos, "this refundable credit will be delivered instead as a quarterly benefit. Which means you will no longer get this credit on your tax return, but instead deposited in quarterly installments in your bank account."
However, to get the benefit you still have to file your tax return.
Home office credit
Along with that, the home office credit has been updated to boost you up from a $400 credit to a $500 credit.
To qualify, there are two ways to claim this credit if you worked from home more than 50% of the time, Vittoratos explains.
One is the simplified way, where you simply claim $2 a day for each day you worked from home, or the detailed way, which requires additional forms and receipts to claim the exact amount you spent on work from home.
COVID-19 benefits
And, finally, if you repaid any amount of COVID-19 benefits you received this year, you are able to claim that on your tax return as well.
With that, you have the option to claim that amount on either the year you received the benefit, or the year you repaid the amount owed.
"Normally, you can only deduct the repayment of these amounts the year they were repaid," said the tax expert.
Not eligible for any of these? Well, there are a whole bunch of other ways to save some extra money this tax season. Depending on whether you're a student, a new homeowner or more, there are CRA tax benefits, claims, and programs that can help you out.
