A tax credit reduces the amount tax you pay, and, depending on the credit, can help you get money back in the form of a refund or tax benefit. Your eligibility for certain tax credits depends on a number of factors, such as your income, employment, marital status and if you have any dependents. As Canadians pay both federal tax and provincial/territorial tax, there are tax credits for both types.
There are also two different kinds of tax credits: refundable and non-refundable, and it’s important to understand the differences between the two.
Refundable Vs. Non-Refundable Tax Credits
A refundable tax credit can help you get a tax refund. If the total amount of your eligible tax credits is greater than the amount of tax you owe, you will get a refund for the difference. Even if you don’t owe any income tax, you can still claim an eligible refundable tax credit as there are a…
