Advertisement
Non-refundable tax credits are amounts you can claim on your tax return to reduce your tax bill—but nothing more.
Non-refundable tax credits are tax benefits that reduce the amount of tax an individual owes. Unlike refundable tax credits that may result in a tax refund, non-refundable tax credits can only reduce your tax liability to zero. In other words, they can’t generate a refund if they exceed your taxes payable. If your total tax liability for the year is $1,000, and you have $1,200 in non-refundable tax credits, your tax owed would be reduced to $0, but you wouldn’t receive the extra $200 as a refund.
These credits cover various categories such as personal exemptions, home-related credits like the Home Buyers’ Amount (which increased from $5,000 to $10,000 in 2022), work-related expenses through the Canada employment amount, education costs via the tuition tax credit, and even contributions such as the Volunteer Firefighters’ Amount for eligible volunteers. Understanding which tax credits apply to your situation and eligibility criteria is important, as they vary by province and territory in Canada. The Basic Personal Amount, set at $15,000 for federal taxes in 2023, is a key non-refundable tax credit representing the income threshold below which you don’t pay income tax.
Example: “By claiming the Basic Personal Amount and other non-refundable tax credits, your daughter in university shouldn’t have to pay any tax on her earnings from her summer job.”
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
Here’s how to get your free ticket to attend two MoneyShow virtual expos.
Should you be paid as a power of attorney? Learn about the compensation rules in Ontario and how to...
The oilsands giant will return all excess cash to shareholders after hitting debt target early.
You started investing in your 20s, and you feel pretty good about doing it. But now what? Consider impact...
Shopify reports third-quarter net income of USD$828 million, and its executives aren’t concerned about how Trump’s election win will...
Here are the best accounts to hold your savings and investments.
Want an idea of how much tax you paid—or will be paying—for 2024? Here are the federal and provincial...
