Non-Refundable Tax Credits

A non-refundable tax credit reduces the amount of tax you pay on your taxable income. You will not get money back from a non-refundable tax credit, but you can use it to offset how much you will pay.

For example; If you determine that you owe $1,000 in personal taxes, but you’re also eligible for $500 in non-refundable credits, you’ll only pay $500. However, if you don’t owe any taxes and you are eligible for $500 in non-refundable tax credits, you will not get a $500 refund.

Examples of Canadian Non-Refundable Tax Credits

• Basic Personal Amount – You can claim a federal and provincial basic personal amount. This amount offsets the payable taxes for low-income taxpayers. the amount is indexed which means it increases every year. if you lived outside of Canada throughout the year, you will claim a prorated amount based on the number of days you resided in the country for the taxation year. you can claim this amount on line 30000 of your Income Tax and Benefit Return.
• Amount for an Eligible Dependent – if during the tax year, you supported an eligible dependant, you can claim an eligible dependant amount that is equal to the basic amount reduced by the dependant’s income. If the dependant had a physical or mental impairment, you can claim an extra supplement called the Canada Caregiver Amount. You will need to fill out Schedule 5 if you are paper filing your return, but this schedule will automatically be filed when you Netfile your tax return (file electronically).
• Tuition, Education, and Textbook Amount – unlike its name, federally, the only tax credit available is for tuition, but some provinces/territories may have education or textbook credits still available:
  • Ontario and Saskatchewan have eliminated the Tuition and Education amount incurred after September 2017. However, you still can carry forward previous amounts.
  • Alberta Tuition and Education amount will be eliminated after 2020.
  • Manitoba Tuition and Education amount will be retained.
  • Newfoundland and Labrador Tuition and Education amount will be retained.
  • Nova Scotia Tuition and Education amount will be retained.
  • British Columbia Tuition and Education amount will be eliminated after 2019.
  • New Brunswick Tuition and Education amount reinstated the tuition amount that was eliminated in 2017. You can claim 2017 and 2018 in your 2019 income tax return.
  • Prince Edward Island Tuition and Education amount will be retained.
  • Yukon Tuition and Education amount eliminated the education tax credit in 2017 and later years.
  • Northwest Territories Tuition and Education amount will be retained.
  • Nunavut Tuition and Education and Textbook amount will be retained.
  • Quebec tax credit for Tuition or Examination fees are still in effect.

Those are some of the most common non-refundable tax credits, but there are many more you may be eligible for at the federal, provincial, and territorial levels, such as:

• Caregiver amount
• Disability amounts (or transfers)
• Medical Expenses
• Donation and gifts
• Volunteer firefighters’ amount
• Search and rescue volunteers’ amount
• Home accessibility expenses
• Home Buyer’s amount

What About My Allowable Amount of Non-Refundable Tax Credits?

For full-year Canadian residence, you can claim the full amount of your non—refundable credits. At the federal level, the government places a maximum on how many non-refundable tax credits that a non-resident of Canada can claim (assuming they are electing until Section 217). If you are a resident or citizen, this restriction does not apply to you and you can claim all of your non-refundable tax credits.

What is a Refundable Tax Credit?

Refundable tax credits are credits that the government will pay you if you are eligible for them. Unlike the non-refundable credits, refundable credits can result in a negative amount which means CRA will give you this amount as a refund.

Examples of refundable tax credits

You can claim these credits on your Income Tax and Benefit Return, which include the following:

• CPP overpayment, and EI overpayment
• Climate Action Incentive
• Refundable Medical Expenses
• Canada Workers Benefit
• GST/HST rebate
• Eligible educator school supply credit

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