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Claiming The British Columbia Sales Tax Credit

The BC Sales Tax Credit program is designed to offset the cost of sales tax for low-income taxpayers and their families residing in British Columbia as of Dec. 31.

Are you eligible for the BC Sales Tax Credit?

Residents of British Columbia may be eligible for the refundable sales tax credit if they are 19 years old or over, have a spouse or common-law partner, or are a parent. Additionally, applicants must not have been in prison or a similar institution for more than six months of the tax year, including Dec. 31. As well, deceased taxpayers are excluded.

What is the credit amount?

The maximum credit is $75 for the taxpayer and $75 for his or her spouse or common-law partner. The maximum income threshold for receiving any portion of the credit is $18,750 for individuals, and $25,500 for spouses combined. The income amount used by the form is not just the net income amount from line 236 of the return. Instead, that amount is reduced by any benefits repayable on the Canada Child Benefit and/or Registered Disability Savings Plan, and then increased by any income received from either one or both of those programs.

The B.C. sales tax credit is refundable, so even if you do not have taxable income to report, you can get cash back from the government by filling out the appropriate paperwork and submitting it along with your return.

How to Claim the BC Sales Tax Credit?

Use form BC479, the British Columbia Credits form. Lines 1 to 8 use income amounts from the T1 General for yourself and for your spouse. Add Canada Child Benefit and Registered Disability Savings Plan repayments to your net income on line 213 and line 232 respectively.

Then, Canada child benefit and registered disability savings plan income are deducted. There are separate columns in place for you and your spouse, which are to be first filled out and then combined together. The resulting sum is called your Adjusted Net Family Income.

To calculate your claim amount, you must first subtract the following amount from your income: $15,000 for an individual, or $18,000 for a couple. Next, multiply your remaining income amount by 2 percent. Finally, subtract that amount from the maximum claim amount of $75 for individuals or $150 for couples to yield your claim amount. The credit received will calculate to $75 or less for individuals, and to $150 or less for families.

For example, John and Sharon make a combined income of $27,000. The form requires them to deduct $18,000 as a couple, leaving $9,000. Their total claim is 2 x $75 = $150 and is reduced by 2 percent of the amount that their combined income exceeds $18,000 ($9,000 x 2 percent = $180). Note that a negative amount results in a claim of zero.

Thankfully, some tax preparation software, such as TurboTax, completes the B.C sales tax calculation based on income entries. If you are entitled to the credit, the amount will automatically generate for you on your return.

References & Resources