2022 Income Tax: New tax credits for Canadians

When are 2022 taxes due?

First, the important tax dates to mark in your calendar. The deadline for individuals to file their tax returns is usually on April 30 every year. However, since that date falls on a Sunday in 2023, the deadline is May 1, 2023.

If you or your spouse or common-law partner are self-employed, your submission deadline is June 15, 2023, but if you owe any tax, you have to pay it by May 1, 2023.

Most sole proprietors or partnerships also have a May 1, 2023 deadline for their returns, unless their fiscal year doesn’t follow the traditional calendar year. Then their deadline is six months after the end of their fiscal year.

If you’re wondering if and why you should file your taxes every year, we asked Certified Financial Planner Liz Schieck, from the New School of Finance, about that. Apart from it being the law and to avoid paying late penalties, she says you can benefit from some good stuff when you file.

“Your income tax filing is what will determine your eligibility for various tax credits like the Canada Child Benefit payments, or the GST/HST credit or Trillium benefit, and also newer tax credits like the Climate Action Incentive payment,” she says. “Also, typically you need to show your Notice of Assessment to become eligible for things like daycare subsidies, or to qualify for a mortgage if you’re trying to buy a house.”

Now, let’s look at the new tax credits.

What is the Canada workers benefit?

The Canada workers benefit (CWB) is a refundable tax credit that helps low-income working families and individuals. There are two parts to the credit:

1. The basic amount
2.  A disability supplement (if you qualify)

What qualifies as “low income” depends on where you are in Canada and your net income for 2022. The Canada Revenue Agency (CRA) outlines several charts to determine that, but here are the net income amount qualifications, excluding Quebec, Nunavut and Alberta:

If your net income is equal to or more than the amounts listed above, the basic amount won’t be paid.

The maximum amount someone can expect to receive is $1,395 for single individuals and $2,403 for families. These amounts are adjusted if your net income has changed.

Individuals whose adjusted net income is more than $22,944 will have the basic amount reduced. The same will happen for families with an adjusted net income higher than $26,177.

What is the disability supplement?

In Canada, you’re eligible for the disability supplement if you qualify for the disability tax credit and have an approved T2201 Disability Tax Credit Certificate that’s on file with the CRA.

The maximum amount someone can get is $720 for single individuals and for families. As with the CWB basic amount, this can be reduced based on the adjusted net income.

Who gets the climate action incentive payment?

If you live in Ontario, Alberta, Saskatchewan and Manitoba, you may have received a random payment back in July and in October 2022. That’s the climate action incentive payment (CAIP). It’s a quarterly payment with a final payment coming in January 2023.

You get the CAIP when you file your taxes. The CRA decides if you’re eligible and will send you the payments.

Speaking of eligibility, there’s no income requirement. You just have to be a resident of Alberta, Ontario, Manitoba and Saskatchewan, on the first day of the payment month and the last day of the previous month. You also have to be:

• 19 years of age or older
• You have (or previously had) a spouse or common-law partner
• You are (or previously were) a parent and live (or previously lived) with your child

Here’s how much you could get from the CAIP, according to the CRA, as an individual, and as someone with a spouse or partner and/or with children under the age of 19, based on your province.

In Ontario, here is what the annual payments for CAIP looks like:

• $373 for an individual
• $186 for a spouse or common-law partner
• $93 per child under 19
• $186 for the first child in a single-parent family

And this is for Manitoba:

• $416 for an individual
• $208 for a spouse or common-law partner
• $104 per child under 19
• $208 for the first child in a single-parent family

Saskatchewan:

• $550 for an individual
• $275 for a spouse or common-law partner
• $138 per child under 19
• $275 for the first child in a single-parent family

And for Alberta:

• $539 for an individual
• $270 for a spouse or common-law partner
• $135 per child under 19
• $270 for the first child in a single-parent family

Can you still claim home office expenses?

If you’ve read our previous tax articles, you know that if you’re not self-employed but worked from home, you can claim home office expenses. (Self-employed people, keep claiming your home office expenses as usual.)

Let’s look at the changes to home office expenses for the 2022 tax year. The temporary flat rate still applies if you worked more than 50% of the time from your 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 worked from home, plus any additional days worked. The maximum is up to $500 (250 working days) per individual in 2022. No paperwork or forms are required.

If you want to do the detailed method and claim the actual amounts, you need the supporting documentation plus a completed and signed T2200S or T2200 form from your employer.

For home expenses for work, here’s what you can claim (and what you can’t)

Let’s start with the good news.

You can claim the following:

• Electricity/hydro
• Heat
• Water
• The utilities portion (electricity, heat, and water) of your condominium fees
• home internet access fees
• Maintenance and minor repair costs
• A portion of rent paid for a house or apartment where you live

If you make commission as part of your salary, you can also claim:

• Home insurance
• Property taxes
• Equipment—such as cell phone, computer, laptop, tablet and/or fax machine—related to your commission income

However, you cannot claim things like:

• Mortgage interest
• Principal mortgage payments
• Home internet connection fees
• Furniture or wall decorations
• Capital expenses like replacing windows, flooring, furnace, etc.

The tax credit for zero-emission vehicles

The CRA created two new capital cost allowances (CCA), which are used for depreciable assets, for zero-emission vehicles. Before we dig in to those, know that a CCA is a tax deduction which helps cover the cost of an asset’s depreciation over a period of time. This is why you can claim business equipment for a couple of years while it depreciates. There’s a whole list of CCA classes, including for roads, taxis, farming and buildings.

The two new CCAs apply to zero-emission vehicles bought after March 18, 2019, and are available for use before 2028.

The first CCA class is Class 54, which is for motor vehicles and passenger vehicles not including taxis or vehicles to be leased or rented out. It has a CCA rate of 30%.

The capital costs (those are fixed, one-time expenses such as the purchase of a vehicle) will be deductible up to a limit of $55,000, plus sales tax. This is for 2019. The amount will be reassessed every year.

Class 55 is for leased and rented vehicles or taxis. The CCA rate is 40% and it may apply for certain eligible vehicles acquired and available for use after March 18, 2019, and before Jan. 1, 2028.

What’s eligible?

• You got your zero-emission vehicle after March 18, 2019.
• You received no assistance under the federal purchase incentive.
• It is not being used for any reason other than why you bought it.
• It can be used on streets and highways.
• It’s a plug-in hybrid with a battery capacity of at least 7kWh or is fully electric or powered by hydrogen.

Return of fuel charge proceeds to farmers tax credit

This one is a mouthful. But what it is is the ability to make a claim so that a portion of the fuel charge proceeds from the federal carbon pollution pricing system directly to farming businesses in provinces that do not currently have a system that meets the federal requirements. Those are Alberta, Manitoba, Ontario and Saskatchewan.

For eligibility, farmers can be self-employed or part of a farming partnership. That partnership has to derive income from farming and the total farming expenses for all businesses related to farming must be $25,000 or more.

Attn teachers et al: Eligible educator school supply tax credit

If you qualify for the educator school supply tax credit, you can claim up to $1,000 of eligible supplies and expenses.

For the 2022 tax year, the tax credit rate is 25% with a maximum credit of $250. This year, remote learning tools, digital timers and graphing calculators were added. Here is the list:

• Books, games and puzzles
• Calculators
• Containers
• Computer equipment for outside of the classroom, such as laptops, desktops and tablets (not already made available by the school), as well as web cams, microphone and headphone
• Digital timers
• Educational support software
• Electronic educational toys
• External data storage devices
• Multimedia projectors
• Printers
• Speakers
• Video streaming devices
• Wireless pointer devices

What are the provincial tax credits?

Now those are the big federal ones, but as Schieck says, each province and territory has its own tax credits. Ontario, for example, has the Ontario staycation credit. That is where you can claim up to $1,000 for a stay in an Ontario cottage, campground or hotel and receive a 20% tax credit for that.

So, check your provincial or territorial website to see if there are any new credits or deductions available.

• Alberta
• British Columbia

• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Northwest Territories
• Nova Scotia
• Nunavut
• Ontario
• Prince Edward Island
• Quebec
• Saskatchewan
• Yukon

What else to know about credits and more for your 2022 taxes

That was a long list of credits, but what do you need to know to file your taxes? Definitely gather all your documentation before you start the filing process. This includes any contributions to registered accounts, investment, income and retirement statements, work-related expenses, union dues, childcare expenses and charitable donations, as well as entertainment expenses if you’re self-employed.

As for filing, most tax programs, such as those from Wealthsimple and Intuit are updated to reflect new changes to the tax code so all you have to do is input all your information. The program will calculate whether you owe money or will receive a refund. But generally speaking, most tax returns for Canadians are manageable. (Here is our explainer on doing your taxes yourself.)

“If you don’t feel confident preparing and filing your taxes yourself, consult a tax preparer or accountant,” says Schieck. “It will cost you some money, but paying someone to file your taxes for you is much better than the alternative of avoiding filing or filing incorrectly. Basically, my big advice is: Get your taxes filed on time, whether you do them yourself or outsource that labour. It’s better to know what balance or refund you’re working with than to live with that doubt.”

The CRA and tax programs also protect your information and the CRA has outlined its security protocols.

Finally, as we move into the tax season, be aware of the increase in scams and fraud. The CRA will never ask you to pay fees or taxes with gift cards or ask you for personal information via email. If you think you’ve been targeted, check this list of scams before doing anything.

Read more on personal income taxes:

• The 2022 tax brackets in Canada, based on annual income and broken down by province, too
• What’s my RRSP contribution limit for 2022?
• 2022 tax season primer: Our roundup of the best tax tips for Canadians
• How GIC returns are taxed in Canada