2022 Tax Guide
The pandemic and forced shutdowns of the economy have created incredible financial pressures for Canadians. Half a trillion dollars in federal government deficits have ballooned inflation to an 18-year high. Housing and gas prices are up by a third, and families will pay an additional $1000 this year to feed themselves. Prices of everyday essentials for families in Battle River--Crowfoot have skyrocketed.
Now more than ever, it’s critical that Canadians receive the benefits they are entitled to. As you prepare to file your 2021 taxes, please take some time to review this Tax Guide which outlines programs that may offer some relief to you and your family.
Questions about your taxes?
Contact the Canada Revenue Agency at 1.800.267.6999 or
online at canada.ca/en/revenue-agency
The due date for filing an income tax and benefit return and paying any related tax balance due is April 30th, 2022.
If you are self-employed, you have until June 15th to file a return. However, to avoid late penalties, the CRA encourages you to file by April 30th.
Support for Individuals Impacted by COVID-19
Employment Insurance (EI) program
As of January 1, 2022, the maximum yearly insurable earnings amount is $60,300. This means that you can receive a maximum amount of $638 per week.
Canada Worker Lockdown Benefit (CWLB)
The Canada Worker Lockdown Benefit provides $300 a week to eligible workers who are unable to work due to a temporary local lockdown anytime between October 24, 2021 and May 7, 2022.
The benefit is only available when a COVID-19 lockdown order is designated for your region.
Canada Recovery Sickness Benefit (CRSB)
The Canada Recovery Sickness Benefit provides $500 ($450 after taxes withheld) per week for up to a maximum of six weeks, for workers who:
‒ are unable to work for at least 50% of the week because they contracted COVID-19;
‒ are in self-isolation for reasons related to COVID-19;
‒ have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19.
Canada Recovery Caregiving Benefit (CRCB)
The CRCB provides $500 per week for up to 26 weeks per household for workers:
‒ unable to work for at least 50% of the week because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19; or
‒ because a child or family member is sick and/or required to quarantine or is at high risk of serious health implications because of COVID-19.
WARNING AT TAX TIME: If you received the Canada Recovery Benefit (CRB) or other benefits in 2021, they are considered taxable income by CRA. Since there were no source deductions, be prepared for a hefty tax bill of up to 15-20% of benefits received, depending on your overall income level.
Savings for All Canadians
Goods and Services Tax (GST) Credit
Four times a year, this tax-free payment helps individuals and families with modest incomes offset all or part of the GST they pay.
If you have a spouse or common-law partner, just one of you can receive this credit. When you file your 2021 tax return, CRA will determine your eligibility and will advise those who are eligible to receive the credit.
Medical Expense Deductions
This credit applies to a number of eligible expenses including home care services, laser eye surgery and orthopedics. The previous Conservative government expanded the amount of the deduction itself, as well as the list of expenses, to include costs associated with certain types of service animals (e.g. diabetes alert dogs). The amount you can claim is the total of your expenses, minus approximately $2,421 or 3% of the claimant’s income (whichever is less). There is no limit on the amount of eligible expenses a taxpayer can claim for himself or herself, a spouse or common-law partner, or a child under 18.
Climate Action Incentive
Canadians who live in a province where the Liberal Carbon Tax applies – Alberta, Saskatchewan, Manitoba and Ontario – can claim the climate action incentive with their income tax return. The amount you receive depends on your province of residence and your personal living situation. It probably won't cover all the costs of the carbon tax. You may also qualify for a 10% supplement if you are a resident of a small or rural community. Beginning in July 2022, amounts will be paid on a quarterly basis.
Simplified Home Office Tax Credit for 2021
The federal government will extend the simplified flat-rate option to allow Canadians to deduct home office expenses for the 2021 and 2022 tax years. In addition, the maximum amount that employees can deduct under the simplified method has been raised to $500 from $400. If you worked more than 50% of the time from home for a period of at least four consecutive weeks in the year due to the COVID-19 pandemic, you can claim $2 for each day you worked from home during that period. You can then also claim any additional days you worked at home in the year due to the COVID-19 pandemic. The maximum amount that can be claimed is $500 per individual in 2021 and in 2022.
Canada Training Credit
Starting in 2020, the Canada Training Credit (CTC) is available for eligible tuition and other fees paid for certain courses taken in 2020 and subsequent tax years. Beginning with the 2019 tax year, an eligible individual can accumulate $250 in each year toward their CTC limit, up to a maximum of $5,000 in a lifetime. This credit can be accessed the following year to help cover up to half of eligible tuition and fees associated with training. Note that it is only available for individuals between the ages of 26 and 65 who reside in Canada, with income between $10,000 and the top of the third tax bracket ($151,978). Contact CRA to check eligibility.
Savings for Families
Child Care Expense Deductions
You can claim payments you have made to someone who has looked after your child while you either earned an income from employment, operated a business alone or as an active partner, attended school or conducted research.
The previous Conservative government increased the dollar limits that parents can claim up to $8,000 per child who is under the age of seven, $5,000 for each child aged 7 to 16 (and for infirm children over the age of 16), and $11,000 for any children who are eligible for the Disability Tax Credit.
Canada Caregiver Credit
You can claim $2,295 under the Canada Caregiver Credit if you support a spouse, a common-law partner or a dependent with a physical or mental impairment. If you are eligible for the Canada Caregiver Credit and the person you are supporting has a net income of between $7,368 and $24,604, you may be able to claim an additional amount up to a maximum of $7,348.
Child Disability Benefit
To recognize the additional costs that can add up when caring for a child with a severe disability, families can continue to claim the Child Disability Benefit. It is an amount of up to $2,915 per eligible child.
Registered Disability Savings Plan
The previous Conservative government introduced the Registered Disability Savings Plan (RDSP) to ensure long-term financial security for Canadians and families who are dealing with a severe disability. Over the years, we have also made a number of enhancements. In particular, the Plan now ensures that long-term financial security is provided to children whose parents are no longer able to provide support.
Adoption Expense Tax Credit
This credit is a 15% non-refundable tax credit that allows adoptive parents to claim eligible adoption expenses relating to the completed adoption of a child under the age of 18. The previous Conservative government created this initiative and increased the maximum amount of eligible expenses up to $15,000 per child, indexed to inflation. Currently, the maximum is $16,729.
Savings for Home Buyers
Home Buyers’ Amount
The credit allows first-time home buyers to claim an amount of $5,000 on qualifying home purchases. It’s also available to those who are not first-time home buyers but who are eligible for the Disability Tax Credit (DTC) when they purchase a more accessible or functional home.
Home Buyers’ Plan
Under the Home Buyers’ Plan, the previous Conservative government raised the amount Canadians can withdraw from their Registered Retirement Savings Plans (RRSP) for a down payment on their first home. The amount has increased again to $35,000.
Savings for Working Canadians
Eligible Educator School Supply Tax Credit
Eligible educators can claim a 15% refundable tax credit on up to $1,000 of supply purchases per year. Some examples include flashcards, arts supplies, writing materials, books for the classroom and more.
Volunteer Firefighters’ Tax Credit
This is a 15% non-refundable tax credit based on an amount of $3,000 for volunteer firefighters who perform at least 200 hours of service per year. Delivered by the previous Conservative government, the option to claim the exempt amount of up to $1,000 for honoraria will remain in lieu of the credit, if desired.
Search and Rescue Volunteer Tax Credit
This is a 15% non-refundable tax credit based on an amount of $3,000 to acknowledge the valuable contributions of ground, air and marine search and rescue volunteers, who perform at least 200 hours of service per year. Delivered by the previous Conservative government, the option to claim the exempt amount of up to $1,000 for honoraria will remain in lieu of the credit, if desired.
Tradespersons’ Tools Deduction
This tax deduction, delivered by the previous Conservative government, helps tradespeople who are often required to pay for their tools and equipment up front out of their own pockets.
Meal Expenses of Long-Haul Truck Drivers
The Canadian tax system generally limits business-related meal, entertainment, and other expenses to be deductible only up to 50%. The previous Conservative government raised the deductible portion of meal expenses for long-haul truck drivers to 80%.
Lowering of the Small Business Tax Rate
In 2015, the previous Conservative government introduced a tax measure to lower the small business tax rate from 10.5% to 9% by 2019. A reduced small business tax rate of 9% is now in effect.
Canada Workers Benefit
This benefit, introduced by the previous Conservative government in 2007, is a refundable tax credit that supplements the earnings of low-income workers to ensure they aren’t penalized for getting a job. The Liberal government has since renamed and expanded the benefit.
For those low-income working Canadians with a disability who face even larger barriers to workforce participation, this benefit provides an additional supplement.
Canada Employment Amount
The Canada Employment Amount provides most employees of the public and private sector (excluding the self-employed) with help to offset the cost of work-related expenses such as home computers, uniforms and supplies. If you qualify for this amount, you can claim up to $1,257 on your 2021 tax return.
Apprenticeship Job Creation Tax Credit
Employers who employ an eligible apprentice in a skilled trade in the first two years of an apprenticeship contract (registered with the federal, provincial, or territorial government) can be eligible to receive a non-refundable tax credit equivalent to 10% of the salaries and wages paid to the apprentice. Introduced by the previous Conservative government, this can translate into tax savings for an employer of up to $2,000 per eligible apprentice.
Lower Taxes for Local Business Owners, Farmers and Fishermen
When ownership of a family farm, local business, or fishing enterprise passes from one generation to the next, the properties – or shares – are subject to a Capital Gains Tax. Previously, the first $500,000 of the value was tax-free. The previous Conservative government increased this exemption to $800,000. (As it is indexed for inflation, the lifetime capital gains exemption is $892,218 for the 2021 tax year.) Additionally, Conservatives also increased the limit specifically for farm and fishing businesses to $1 million.
Last year Conservative Bill C-208 was passed in Parliament which will make it easier for families to transfer their business or farm to their children without paying unfair tax penalties.
Savings for Seniors
Home Accessibility Tax Credit
Seniors and persons with disabilities who are eligible for the Disability Tax Credit can qualify for tax relief of 15% on up to $10,000 in eligible expenses. This tax credit was delivered by the previous Conservative government. To be eligible, expenses must be incurred in relation to a renovation allowing for better mobility and functionality or reducing the risk of harm.
Doubling the Pension Income Amount
Years ago, a non-refundable pension income credit was introduced to apply to the first $1,000 of eligible pension income. A lot has changed since then, which is why the previous Conservative government increased the maximum amount of eligible pension income that can be claimed to $2,000. This results in even more savings that will make a real difference for pensioners.
Increasing the Age Amount
While in government, Conservatives increased the Age Amount by $2,000 to help low and middle-income seniors keep more of their hard-earned money to meet their needs. Based on these increases and adjustments for inflation, the Age Amount allows seniors to claim up to $7,637 on their 2021 tax return, depending on the individual’s net income.
The previous Conservative government introduced pension income-splitting to help ease the tax burden and deliver fairness for Canadian pensioners.
Generally, each individual Canadian pays taxes on their full income earned. Pension income-splitting allows any Canadian resident who receives qualifying pension income to allocate to their spouse (or common-law partner), with whom they reside, up to one-half of that income. By doing so, a pensioner and their family can dramatically reduce their tax load.
Increasing the Age Limit for Converting RRSPs to RRIFs
Registered Retirement Savings Plans (RRSPs) provide one of the best opportunities for Canadians to save for the future. Since RRSP contributions are not taxable below your RRSP deduction limit, they are an ideal way to plan for retirement. However, some Canadians have been restricted by the way RRSPs are structured. Even though they chose to work past 69 years of age, it was a requirement to convert their RRSP into a Registered Retirement Income Fund (RRIF) and begin making withdrawals.
The previous Conservative government increased the age limit for converting RRSPs to RRIFs from 69 to 71. Now, more Canadians have the freedom to choose when they convert their RRSPs.
How to File Your Taxes
Many reading this will file taxes with an accountant or tax professional. This is a great way to ensure your taxes are done right.
In addition to hiring a tax professional, the CRA provides four additional methods to file your taxes (including low cost or free services).
You will find a list of certified desktop, online, and mobile software products at Canada.ca/netfile-software. Some of these software products are free.
Filing By Paper
Please note: Due to COVID-19, paper filing may delay your assessment.
If you filed your taxes on paper last year, the CRA will automatically mail you the 2021 income tax package.
You can view, download and order forms and publications at Canada.ca/taxes-general-package. You can also call the CRA at 1.855.330.3305 to order forms and publications.
The CRA offers an automated phone service called File my Return. This free service lets you complete and file your return by phone. The service is available to eligible Canadians who have low or fixed incomes and whose tax situation doesn’t change from year to year. If you are eligible for File my Return, the CRA will mail an invitation letter to you by mid-February.
Using the Community Volunteer Income Tax Program
Through the CRA’s Community Volunteer Income Tax Program, community organizations host free tax clinics for Canadians with a modest income and simple tax situation. Volunteers may be able to complete and file returns for free, by videoconference, by phone, or through a document drop-off arrangement. To find a tax clinic near you, go to Canada.ca/taxes-help.
Tax Clinics in Battle River--Crowfoot
ASA Tax Clinic *By Appointment Only
Stettler Volunteer Centre
Tofield/Beaver County West FCSS
SOS Program Year Round Tax Filing
Drop In Tax Services
Kneehill County - FCSS
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You can also file a report at www.antifraudcentre-centreantifraude.ca.