Credits, benefits, services, and other information available to you this filing season from Canada Revenue Agency.
Home Renovation Tax Credit
a non-refundable tax credit of up to $1,350
First-Time Home Buyers' Tax Credit
a non-refundable tax credit of up to $750
Children's Fitness Tax Credit
a non-refundable tax credit of up to $75/child
Public Transit Tax Credit
a non-refundable tax credit of 15%
Tradesperson's Tools Expenses
deduct up to $500 from your net income
Pension Income Splitting
split up to 50% of your eligible pension income with your spouse or common-law partner
Tax-Free Savings Account
tax-free investment income on savings up to $5,000
Tax credits and benefits for individuals
Only available for the 2009 tax year.
The Home Renovation Tax Credit is a non-refundable tax credit based on eligible expenses for improvements to your house, condo or cottage. It can be claimed on your 2009 income tax return. It applies to work performed or goods acquired after January 27, 2009, and before February 1, 2010 under an agreement entered into after January 27, 2009.
Eligible expenses for goods acquired during this period, even if they are installed after January 2010, will still qualify. If an eligible expense involves work performed by a contractor or a third party, and the work is not completed by the end of the eligible period, only the portion that is completed before February 1, 2010 will qualify even if a payment has been made.
The HRTC applies to eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350 [($10,000 - $1,000) × 15%].
Eligible and ineligible expenses
The expenses are eligible when they are incurred in relation to a renovation or alteration to an eligible dwelling (including the land that forms part of the eligible dwelling) and are of an enduring nature and integral to the dwelling. As a general rule, if the item you purchase will not become a permanent part of your eligible dwelling, it is not eligible. There are items, however, that have been explicitly excluded (see below).
Due to the large number of expenses that can qualify, it is not possible to provide a complete list.
Some businesses or individuals may assert that certain items qualify for the HRTC. It is important to remember that you are responsible for ensuring that all eligibility requirements are met when you claim this credit on your tax return.
Examples of eligible expenses
- Renovating a kitchen, bathroom, or basement
- Windows and doors
- New flooring - carpet, linoleum, hardwood, floating laminate, etc.
- New furnace, woodstove, boiler, fireplace, water softener, water heater, or oil tank
- Permanent home ventilation systems
- Central air conditioner
- Permanent reverse osmosis systems
- Septic systems
- Electrical wiring in the home (e.g., changing from 100 amp to 200 amp service)
- Home security system (monthly fees do not qualify)
- Solar panels and solar panel trackers
- Painting the interior or exterior of a house
- Building an addition, garage, deck, garden/storage shed, or fence
- Re-shingling a roof
- A new driveway or resurfacing a driveway
- Exterior shutters and awnings
- Permanent swimming pools (in ground and above ground)
- Permanent hot tub and installation costs
- Pool liners
- Solar heaters and heat pumps for pools (does not include solar blankets)
- Landscaping: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountain, permanent ponds, large permanent garden ornaments
- Retaining wall
- Associated costs such as installation, building plans, permits, professional services, equipment rentals, and incidental expenses
- Fixtures - blinds, shades, shutters, lights, ceiling fans, etc.
Window coverings, such as blinds, shutters and shades, that are directly attached to the window frame and whose removal would alter the nature of the dwelling are generally considered to be fixtures (i.e. have become part of the home) and therefore would qualify for the HRTC. In some circumstances, draperies and curtains may qualify for the HRTC, if they would not keep their value or usefulness if installed in another dwelling. If these qualifying criteria are not met, it is likely that draperies and curtains would not qualify for the HRTC.
Examples of ineligible expenses
- Furniture, household appliances, and electronic home-entertainment devices
- Purchasing of tools
- Carpet cleaning
- House cleaning
- Maintenance contracts (e.g., furnace cleaning, snow removal, lawn care, and pool cleaning)
- Financing costs
- Amount paid as part of the purchase of your new house, including “upgrades”
- Expenses to acquire goods that have been previously used or leased by you or an eligible family member (e.g., hot water tank)
- Expenses incurred to the rental and/or business part of an eligible dwelling
Do it yourself
If you do the work yourself, the eligible expenses include expenses for building materials, fixtures, equipment rentals, building plans and permits. However, eligible expenses would not include the value of your labour or tools.
Work performed by electricians, plumbers, carpenters, architects
Generally, work performed by electricians, plumbers, carpenters, architects, etc. in respect of an eligible expense qualifies for the HRTC. If you're planning on hiring a contractor to do construction, renovation, or repair work on your home, the Get it in Writing!
Family member hired for renovations
Expenses are not eligible if the goods or services are provided by a person related to you, unless that person is registered for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) under the Excise Tax Act. If your family member is registered for the GST/HST and if all other conditions are met, the expenses are eligible for the HRTC.
First-time home buyers' tax credit
What is the first-time home buyers' tax credit (HBTC)?
The HBTC is a non-refundable tax credit for certain homebuyers who acquire a qualifying home after January 27, 2009, that is - closing after this date.
How is the HBTC calculated?
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750. However, if the total of your non-refundable tax credits is more than your federal income tax, you will not receive a refund for the HBTC.
Who is eligible for the HBTC?
You will qualify for the HBTC if:
- you or your spouse or common-law partner acquire a qualifying home; and
- you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.
If you are a person with a disability or are buying a home for a related person with a disability, you do not have to be a first-time home buyer to get the HBTC. However, the home must be acquired to enable the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
For the purposes of the HBTC, a person with a disability is an individual who is eligible to claim the disability tax credit (DTC) or would be eligible to claim the DTC if costs for attendant care or care in a nursing home were not claimed for the medical expense tax credit.
What is a qualifying home?
A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, as well as apartments in duplexes, triplexes, fourplexes, and apartment buildings all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
As well, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after buying it.
Important things to remember
The home must be registered in your or your spouse's or common-law partner's name in accordance with the applicable land registration system.
You do not have to submit documents supporting your purchase transaction with your income tax and benefit return. However, you have to make sure that this information is available if the Canada Revenue Agency asks for it
Children's fitness amount
You may be able to claim up to $500 per child for the fees paid in 2009 that relate to the cost of registering your or your spouse's or common-law partner’s child in a prescribed program of physical activity.
The child must have been under 16 years of age or under 18 years of age if eligible for the disability amount, at the beginning of the year in which an eligible fitness expense was paid.
Children with disabilities - If the child qualifies for the disability amount and is under 18 years of age at the beginning of the year, an additional amount of $500 can be claimed provided that a minimum of $100 is paid on registration or membership fees for a prescribed program of physical activity.
You may have paid an amount that would qualify to be claimed as child care expenses and the children’s fitness amount. If this is the case, you must first claim this amount as child care expenses. Any unused part can be claimed for the children’s fitness amount as long as the requirements are met.
Mary registered her daughter Julie (9 years old) in a prescribed program of physical activity and paid fees of $750 on August 30, 2009. The program started on September 15, 2009, and ended on April 21, 2010.
Mary’s husband registered their son Eric (17 years old and eligible for the disability tax credit) in a prescribed program of physical activity and paid fees of $400 on December 20, 2009. The program started on January 6, 2010, and ended on April 28, 2010. He also registered their daughter Samantha (10 years old) in a prescribed program of physical activity and paid fees of $600 on January 2, 2010. The program started on January 6 and ended on April 28, 2010.
On her 2009 income tax return, Mary can claim a total amount of $1,400 (if her husband is not claiming any amount) based on the following formula:
· Julie $500 (maximum allowable expenses per child)
· Eric $400 (paid fees) plus $500 (since he is eligible for the disability tax credit and at least $100 was paid for eligible fitness expenses for him)
· She can not claim an amount for Samantha because the fees were paid in 2010.
Public transit amount
You can claim the full amount paid for a public transit passes, or for the cost of passes for multiple transit systems during the year. This includes the cost of monthly passes or of longer duration such as an annual pass for travel on public transit.
These passes must permit unlimited travel within Canada on:
- local buses;
- commuter trains or buses; or
- local ferries.
You can also claim the cost of:
- Shorter duration passes if:
- each pass entitles you to unlimited travel for an uninterrupted period of at least 5 days; and
- you purchase enough of these passes so that you are entitled to unlimited travel for at least 20 days in any 28-day period.
- Electronic payment cards if:
- the card is used to make at least 32 one-way trips during an uninterrupted period not exceeding 31 days; and
- the card is issued by a public transit authority that records and provides a receipt for the cost and usage of the card.
Only you or your spouse or common-law partner can claim the cost of transit passes (to the extent that these amounts have not already been claimed) for:
- your spouse or common-law partner; and
- your or your spouse's or common-law partner's children who are under 19 years of age on December 31, 2009.
For more information on how to reduce your fare for cleaner air visit TransitPasses.ca
What do you need to support your claim?
Your transit pass needs to display all of the following information to support your claim:
- an indication that it is a monthly (or longer duration) pass;
- the date or period for which the pass is valid;
- the name of the transit authority or organization issuing the pass;
- the amount paid for the pass; and
- the identity of the rider, either by name or unique identifier.
If the pass does not have all of this information, you will also need to keep receipts, cancelled cheques or credit card statements, along with your pass(es), to support your claim.
We will accept receipts (letters) generated by employers or Employer Pass Program Coordinators for employer transit pass programs. The receipt should note the purpose, exact amount received, date of payment, and name of the payee.
Generally, we do not consider a bank statement a valid receipt. However, if the statement clearly indicates the purpose of the debit (for example, Employee FareCard), we will accept this as support for your claim.
Completing your tax return
On line 364 of Schedule 1, Federal Tax, enter your Public transit amount.
Amount shown on a T4 slip - Enter the amount from box 84 on line 364 of Schedule 1.
If your employer paid your public transit pass, it is a taxable benefit included in your employment income.
Reimbursement of an eligible expense - If your employer reimbursed your public transit pass, you can only claim the part of the amount for which you have not been or will not be reimbursed. However, you can claim all of the amount if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.
Receipts - Whether you are filing a paper return or filing electronically, keep all of your supporting documents (receipts and passes) in case we ask to see them.
Deduction for tools
If you were a tradesperson in 2009, use the following formula to calculate your maximum tradesperson's tools deduction for the cost of eligible tools you bought in 2009:
Maximum deduction for eligible tools is the lesser of:
a) $500; and
b) the amount, if any, determined by the formula
A - $1,044
A = the lesser of:
1. the total cost of eligible tools that you bought in 2009; and
2. your income from employment as a tradesperson for the year
plus the amount you received in 2009 under the Apprenticeship Incentive Grant program and, under proposed changes, the Apprenticeship Completion Grant;
minus the amount of any Apprenticeship Incentive Grant and, under proposed changes, the Apprenticeship Completion Grant overpayments that you had to repay in 2009.
In 2009, Karsten is employed as an electrician with ABC Company, and he needs to purchase additional tools for his job. He paid $2,500 for the tools he needed and he earned $45,000 in employment income in 2009 as an electrician.
He calculates his maximum deduction for eligible tools in 2009 as follows:
Maximum deduction for eligible tools is the lesser of:
a) $500; and
b) the amount, if any, determined by the formula
A - $1,044
A = the lesser of:
1. $2,500; and
Karsten's maximum deduction for 2009 is the lesser of $500 and $1,456 ($2,500 - $1,044). Karsten claims a deduction of $500 at line 229 of his 2009 return.
Pension income splitting
You (the Pensioner) may be able to jointly elect with your spouse or common-law partner (the Pension Transferee) to split your eligible pension income if you meet all of the requirements.
Do you qualify to split your pension income?
You (the Pensioner) and your spouse or common-law partner (the Pension Transferee) can elect to split your eligible pension income received in the year if you meet the following conditions:
· you are married or in a common-law partnership with each other in the year and are not, because of a breakdown in your marriage or common-law partnership, living separate and apart from each other at the end of the tax year and for a period of 90 days or more commencing in the year (see the note below); and
· you are both resident in Canada on December 31 of the year; or
o if deceased in the year, resident in Canada on the date of death; or
o if bankrupt in the year, resident in Canada on December 31 of the year in which the tax year (pre- or post-bankruptcy) ends.
· you received pension income in the year that qualifies for the pension income amount.
You and your spouse or common-law partner will still be eligible to split pension income if living apart at the end of the year for medical, educational, or business reasons (rather than a breakdown in the marriage or common-law partnership).
Eligible pension income can only be split between you (the Pensioner) and your spouse or common-law partner (the Pension Transferee).
You are not prevented from splitting your eligible pension income because of the age of your spouse or common-law partner.
Tax-Free Savings Account (TFSA) for Individuals
A Tax-Free Savings Account is a new way for residents of Canada to set money aside, tax-free, throughout their lifetimes.
Contributions to a TFSA and the interest on money borrowed to invest in a TFSA are not tax deductible. The income generated in the TFSA is tax-free when withdrawn.
Any individual (other than a trust) who is at least 18 years old, who is a resident of Canada and has a valid Social Insurance Number (SIN) can be a holder of a TFSA.
You cannot contribute to a TFSA until you turn 18. However, when you turn 18, you will be able to contribute up to $5,000 because this amount will not be prorated.
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