Refundable vs. Non-Refundable Tax Credits
Canadian tax credits fall into two categories. Understanding the difference is key to knowing how much tax you can save.
Non-refundable credits reduce the taxes you owe — but only to zero. If the credit is larger than your tax bill, the excess is not refunded to you. The basic personal amount and medical expense credits are examples.
Refundable credits can reduce your tax owing below zero, resulting in a payment from the government to you — even if you paid no tax. The GST/HST credit and Canada Workers Benefit are examples.
Key Federal Tax Credits for 2025
Basic Personal Amount
Every Canadian resident can claim the basic personal amount — reducing the first $16,129 of income from federal tax.
Spousal / Common-Law Partner Amount
If your spouse or partner had little or no income, you can claim their unused basic personal amount on your return.
RRSP Deduction
Contributions to your RRSP are fully deductible from income — one of the most powerful tax reduction tools available to Canadians.
Medical Expense Tax Credit
Eligible medical expenses — dental, vision, prescriptions, therapy — that exceed 3% of your net income can be claimed.
Disability Tax Credit (DTC)
For Canadians with severe and prolonged impairments. Must be certified by a medical practitioner. Worth up to $1,481 in federal tax savings.
Childcare Expense Deduction
Daycare, nursery school, after-school programs, and summer camps qualify. Generally claimed by the lower-income spouse.
Tuition Tax Credit
Post-secondary tuition paid to a Canadian institution qualifies. Unused credits can be carried forward or transferred to a spouse or parent.
First Home Buyers' Amount
Claimed in the year you purchase your first qualifying home. A $10,000 credit at 15% yields $1,500 in federal tax relief.
GST/HST Credit
Quarterly payments to offset GST/HST paid by low-to-moderate income Canadians. Automatically applied when you file your return.
Canada Workers Benefit (CWB)
A refundable credit for low-income workers. Advance payments available throughout the year. Income thresholds apply.
Canada Child Benefit (CCB)
Monthly tax-free payments for families with children. Based on family net income. Must file taxes every year to receive CCB.
Charitable Donation Tax Credit
Donations to registered Canadian charities receive a 15% credit on the first $200, and 29% on the amount above $200.
Employment-Related Credits
| Credit | Maximum Claim | Notes |
|---|---|---|
| Canada Employment Amount | $1,433 | Automatically available to all employment income earners |
| Work-From-Home Expenses | Actual expenses | Detailed method requires T2200 from employer |
| Union & Professional Dues | Actual amounts | Reported on T4 box 44; fully deductible |
| Moving Expenses | Actual expenses | Must move 40+ km closer to a new job or school |
| Tradesperson's Tools Deduction | Up to $1,000 | Eligible employed tradesperson buying certified tools |
Provincial Tax Credits
Every province and territory also provides its own set of tax credits, in addition to federal credits. These vary significantly by province. Common provincial credits include:
- Ontario: Ontario Trillium Benefit (OTB), Ontario Senior Homeowners' Property Tax Grant, Ontario Sales Tax Credit
- BC: BC Climate Action Tax Credit, BC Sales Tax Credit, BC Training and Education Savings Grant
- Alberta: Alberta Child and Family Benefit (ACFB), Alberta Seniors Benefit
- Quebec: Solidarity Tax Credit, Work Premium, Child Assistance payments (claimed via RL-1)
- All Provinces: Age amount (65+), pension income amount, caregiver credits, adoption expense credits
💡 Don't Leave Money Behind
A 2024 study found that over 1 in 4 Canadians miss at least one eligible tax credit each year. The most commonly missed credits are the medical expense credit, childcare deduction, and provincial benefits like the Ontario Trillium Benefit. Our tax Advisors check every applicable credit for your situation.
Credits for Seniors (65+)
Age Amount
Available to Canadians aged 65+ with net income below approximately $102,925. Reduces with income above $42,335.
Pension Income Amount
Available to those receiving eligible pension income (RPP, RRIF, annuity). Can also be split with a spouse.
Home Accessibility Tax Credit
For eligible renovations that improve accessibility or reduce the risk of injury for seniors or those with disabilities.