WATCH ABOVE: Heather Loney has the details on what you need to know about your 2014 tax return.
UPDATE: Canadians will have five extra days to file their 2014 tax returns following an error at the Canada Revenue Agency (CRA).
In an email to Global News from a spokesperson for Kerry-Lynne Findlay, the Minister of National Revenue, it was confirmed that an “incorrect notification was sent to tax preparers” on April 24, which said the CRA filing deadline is May 5, five days past the actual tax deadline of April 30.
As such, Canadians who file their taxes before May 5 will not face any penalties.
*Editor’s note: This story was originally published on March 19, 2015 and updated on April 28 with news that the CRA will not penalize tax filers if they file before May 5, 2015. The original story follows below.
Depending on your income and circumstances, recent changes to Canada’s tax system could provide you a bit of a break at tax time.
“Always do your research, there are always changes,” said Caroline Battista, senior tax analyst at H&R Block Canada. “Some years the changes are bigger than others, but there’s always changes. Make sure you’re getting back as much as you can.”
Here’s what’s new for the 2014 tax year:
A new Family Tax Cut (FTC) was introduced in October 2014. It’s a non-refundable tax credit for eligible couples with children under 18.
Based on the concept of income-splitting, the FTC allows a spouse or common-law partner to receive a credit (up to $2,000) based on the tax they would have saved if income had travelled from the higher income earner to the lower (up to $50,000 of taxable income).
“The income doesn’t actually travel to the other’s tax return,” said Battista. “It doesn’t affect the other person’s taxable income.”
Despite much trumpeting from the federal government, the FTC remains a source of confusion for many Canadians, according to a recent survey. Battista said many Canadians assume they won’t find any savings through the FTC.
“The Family Tax Cut will provide the most benefit to families where one spouse earns all the income but that is not the only situation that results in tax savings,” said Battista.
WATCH: Your guide to the Family Tax Cut
In a recent Leger survey for H&R Block Canada, respondents were presented with different tax scenarios. In a scenario where one spouse made $50,000 a year and the other earned $40,000, the FTC savings would be $277 – only 10 per cent of respondents knew this scenario would qualify under the new rules.
If one spouse earned $100,000 and the other made $75,000, their savings would be $484, but only 13 per cent of respondents thought this scenario would qualify.
Whether you would benefit from the FTC depends on your tax brackets, said Battista. For instance, a couple earning $80,000 and $50,000, respectively, would not benefit from the FTC because they are in the same tax bracket.
While you might not save the maximum amount, you could save $100 or so — “that’s not something I’d step over on the sidewalk,” Battista said.
Beyond being eligible only to families with young children living at home, the FTC has come under fire recently as being a tax measure for the rich.
In a recent report, Canada’s Parliamentary Budget Officer said the vast majority of Canadians won’t benefit from this tax change.
“The FTC benefits about 2 million households, or 15 per cent of the Canadian total,” read the PBO report, mostly middle and middle-high income earners.
WATCH: Ins and outs of tax credit claims
Last October, the federal government announced it was doubling the claim amount permitted for the Children’s Fitness Tax Credit – up to $1,000 from $500 per child. This change is in place for 2014 tax returns. The credit will be made refundable for the 2015 and subsequent tax years.
Your child must be under the age of 16 at the beginning of the year in order to qualify. Children with disabilities must be under the age of 18.
You can claim fees for various physical activity programs. Keep in mind that you claim the credit in the year that you paid the fees, regardless of when the program took place.
Not all programs are eligible. Eligible programs generally must be supervised, ongoing and require significant physical activity. Things like registration fees for soccer or hockey where the child plays weekly for eight or more consecutive weeks are eligible. Something like a gym membership wouldn’t be eligible because going to the gym is not an organized activity.
If you’re not sure if your child’s program is eligible, ask the organization running the program.
WATCH: Tax cuts for families
If you are a search and rescue volunteer, you may qualify for a non-refundable tax credit of $3,000 for 2014 and subsequent tax years, which translates into $450 off your taxes.
To qualify you must have volunteered at least 200 hours of service, either for an eligible search and rescue organization or through a fire department.
If you are both a volunteer firefighter and a search and rescue volunteer, you can combine the number of hours volunteered, however you can only claim it under either the Search and Rescue Volunteer Tax Credit or the Volunteer Firefighter Tax credit.
Although this one isn’t brand new (it was introduced in 2013) many Canadians aren’t aware of this credit.
The first-time donor’s super credit is an additional 25 per cent non-refundable tax credit that is applied when you claim a charitable donation tax credit.
If you or your spouse haven’t claimed the charitable donation tax credit since 2007 you may be eligible as a first-time donor. Donations must be made to qualified charities (you can check the CRA’s official list here). The tax credit applies to donations made after March 20, 2013 up to an amount of $1,000. The credit applies to only one taxation year from 2013 to 2017.
Although this benefit doesn’t appear on your tax return, starting in 2015, eligible families will receive an increased benefit to help cover the cost of child care. The amount families with children under 6 will receive under the UCCB will increase to $160 per month, up from $100. The enhanced UCCB also means that parents with children 6 through 17 years old will receive $60 per month.
Changes to the UCCB will took effect in January. Everyone eligible for the UCCB will receive a lump sum in July, with monthly payments following that.
Keep in mind that the UCCB is a taxable benefit, meaning you will have to pay taxes on the amount received in the following year.
To receive the UCCB, you must fill out an RC66 application.
Did you get married last year? Buy a house? Have a kid? Chances are your tax circumstances have also changed.
“The main thing when you’re doing your taxes is especially in a year where there’s been any change…is to make sure that you know all the parameters around those situations and be able to know the deductions, the credits that might go with them,” said Battista.Follow @heatherloney
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