Tax time has come once again, and with another year of the COVID-19 pandemic in the books, tax filers should be aware of the changes to benefits, deductions and certain taxable income.
For the scoop on when to file and how to maximize your return and minimize what you owe, check out Global News’ 2022 tax guide below.
When is the 2022 tax deadline?
The deadline to file your taxes to the Canada Revenue Agency is April 30 — sort of.
Because the deadline actually lands on a Saturday this year, returns will be accepted until May 2. Returns need to be received or postmarked no later than that date.
For individuals or families where one of the filers is self-employed, the deadline is stretched to June 15. Be warned, however, that anyone owing on their taxes this year must send the payment by May 2, whether they’re self-employed or not.
Are COVID-19 benefits taxable?
Not all Canadians who received COVID-19 relief such as the Canada Recovery Benefit (CRB) or Canada Emergency Response Benefit (CERB) might know that these payments are considered taxable income.
Robin Taub, a chartered professional accountant (CPA), author and spokesperson with TurboTax, tells Global News that CRB recipients had income tax withheld at the source, a departure from how previous programs like CERB were introduced.
“Some people got a surprise when it came time to filing (and they found out) that they owed. So it seems like they learned from that,” she says.
Some people may owe additional taxes on the CRB, despite the 10 per cent withheld at source.
COVID benefit payments should be noted on a T4A slip issued by the CRA, either by mail or online via MyAccount.
Taub notes that the CRB also has a clawback in place, and that anyone who received the benefit but ended up making more than $38,000 in net income will have to pay back 50 cents per dollar over the amount they made last year.
Some recipients are also required to repay COVID-related benefits. While filling out your taxes you can choose to claim a deduction on that amount in the year you repaid the benefit or the year you received it, or split it between the two.
The CRA has more clarity and a full list of frequently asked questions on how COVID-19 benefits are treated at tax time on its website.
How much can I claim for working from home?
There are multiple ways to claim a tax deduction for working from home, depending on your circumstances.
The flat-rate income tax deduction for those working from home because of the pandemic has increased this year to a $500 maximum, up from $400 the year before.
Bruce Ball, vice-president of taxation at CPA Canada, told Global News in an email that there are many benefits to the flat-rate method: it has the simplest calculation method ($2 per day working from home up to a maximum of 250 days) and does not require your employer to sign any tax forms.
A more detailed method exists for employees who might be entitled to more compensation as a result of working from home. This would see actual household expenses claimed and prorated over the time spent working from home, and requires a signed T2200 form from your employer.
Should you go with the simpler $500 method, or take the time to do the more detailed claim? There are a few factors that might affect this, but Ball says renting versus owning your home can be a major factor.
“Under the detailed method, renters generally have higher eligible expenses than homeowners and it usually produces a higher deduction relative to the flat-rate method.”
Changes to the carbon tax rebate distribution
At the end of the tax-filing process, some filers might notice a deflated return compared to previous years because of changes to the Climate Action Incentive (CAI), the government’s rebate tied to the federal carbon tax affecting Alberta, Saskatchewan, Manitoba and Ontario residents.
In previous years, filers eligible for the benefit would claim it directly on their taxes and receive the rebate as part of their total return.
The CAI is switching this year to a quarterly distribution, however, and it won’t show up as a lump sum on residents’ tax returns. The CRA will automatically determine eligibility once a return is filed.
Eligible recipients will get their first payment on July 15. That first installment will be a double payment, as well, since the date for the first April 15 payment will have passed before the tax deadline.
A few other things to note
There are a couple of other changes and evergreen tips to keep in mind before filing your taxes this year.
For teachers paying out of pocket for classroom supplies, the Educator School Supply Tax Credit is expanding to cover 25 per cent of eligible costs, up from 15 per cent, to a maximum of $1,000.
Rates and income thresholds have changed for the Canada Workers Benefit, based on your province or territory. A “secondary earner exemption” has also been introduced this year.
Some residents living in northern parts of the country are also eligible for new deductions of up to $11 per day based on travel and living expenses this year.
Finally, Taub urges tax filers to cut themselves a break and do their taxes online. Those with a CRA MyAccount can make use of the “autofill” function to automatically populate tax information on file.
“It will just suck that information in,” she says. “All you have to do is review it and make sure that it’s complete. But it does take some of the work out of the process.”