Even though an individual may not have to file a tax return, he or she may want to. By filing a tax return, the individual could qualify for a tax refund or credit. For more information, see Benefits of filing a tax return.
Anyone who pays more tax during the year than they owe could qualify for a tax refund. The tax refund cheque is sent out with a Notice of Assessment
or deposited into their bank account if they asked for direct deposit.
Whether an individual gets a refund or not, he or she may qualify for a tax credit or benefit.
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The day after they were speaking with Anya, Paul and Omar decided to get together after school to play some video games. They took the bus to Omar's house, and, on the way, began to discuss taxes again.
"So, when we were talking with Anya, you said that you might get money back if you filed a tax return. How does that work?" asked Omar.
"I'm not totally sure," said Paul, "but I think that if I pay too much tax I get a refund."
"I know some people get money for other reasons. My mom gets something called the Canada Child Tax Benefit  every month to help pay for me and my sister," said Paul.
"Also, you know Anik who went off to college?" asked Paul. "Well, I saw her a while ago and she told me that she gets a couple of tax credits for GST and college costs."
"I never even knew this stuff existed," said Omar. "How do you think it all works?" |
One such credit is the goods and services tax/harmonized sales tax (GST/HST) credit. It is intended to help offset the impact of GST/HST for Canadians with low and modest income. Generally, anyone over 19 years of age may be eligible for the GST/HST credit by completing the GST/HST credit application section when filing a tax return. Depending on how much income an individual had during the year, he or she could receive the GST/HST credit (which is paid four times a year).
If you will turn 19 before April 1, 2008, you can apply for this credit on your return for 2006. That way, you can receive it starting with the first payment after the month of your 19th birthday.
You may also be eligible to receive the GST/HST credit if you are under 19 years of age and you have (or had) a spouse or common-law partner or you are (or were) a parent and live (or lived) with your child.
Many individuals are also eligible for a provincial or territorial tax credit. The type of credit varies depending on the province or territory where the individual lives. As with the GST/HST credit, individuals can apply for a provincial or territorial tax credit when they file their tax return.
Another important benefit of filing a return is the Canada Child Tax Benefit (CCTB) and related provincial or territorial programs, which pay amounts to eligible individuals to help with the cost of raising children under the age of 18.
The CCTB is paid monthly, and is based on the number of children and the family net income . A family that has a lower family net income will receive a larger CCTB payment than a family that has a higher family net income. Even if you have no income to report, you or your spouse or common-law partner (if you have one) has to file a tax return each year for the CCTB benefit to be calculated and paid. To apply for the CCTB, you must complete Form RC66, Canada Child Tax Benefit Application.
The CCTB is adjusted yearly to adapt to changes in the cost of living.
The UCCB is designed to help Canadian families, as they try to balance work and family life, by supporting their child care choices through direct financial support. The UCCB is for children under the age of 6 years and is paid in instalments of $100 per month per child.
Enrolment for the UCCB is processed through the Canada Child Tax Benefit application.
