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What are non-refundable and refundable tax credits?

Before we get into the list of credits, let’s understand what non-refundable and refundable tax credits are.

Non-refundable tax credits are credits that are not reimbursed when the total credits you claim are higher than the tax payable. For example, if your total non-refundable tax credits are $3,000, and your tax payable is $2,000, the net result of your tax return will be zero tax. The excess $1,000 of credits you have will not be reimbursed.

Refundable tax credits in turn are reimbursed when the total credits you claim are higher than the tax payable. Going back to the example above, if your total refundable tax credits are $3,000, and your tax payable is $2,000, the net result of your tax return will be a refund of $1,000. In this case, the government reimburses the difference.

Eligible dependant amount

The eligible dependant amount is a non-refundable tax credit given to a single parent supporting their child.

You may be able to claim this amount for one dependant if, at any time in the year, you met all the following conditions:

• You did not have a spouse or common-law partner or, if you did, you were not living with them, not supporting them nor being supported by them
• You supported the dependant in 2024
• You lived with the dependant (in most cases in Canada) in a home you maintained.

In addition, the dependant must also be one of the following persons by blood, marriage, common-law partnership or adoption:

• your parent or grandparent
• your child, grandchild, brother, or sister under 18 years of age
• your child, grandchild, brother, or sister 18 years of age or older with an impairment in physical or mental functions

The credit amount you can claim is 15% of $15,705 less the net income of the dependant (2024).

Home buyer’s amount

The Home buyer’s amount is a non-refundable tax credit for the purchase of your first home. To be considered you’re a purchase of your first home, you did not live in another home inside or outside Canada that you (or your spouse or common-law partner) owned in the year of acquisition or in any of the four preceding years (first-time home buyer).

The credit amount you can claim is 15% of $10,000 (2024).

Tuition tax credit

The tuition tax credit is a non-refundable tax credit for eligible tuition fees paid to a post-secondary educational institution.

Post-secondary educational institutions include colleges, universities, and other educational institutions such as a professional organization that provides educational courses at a post-secondary school level to members, as long as one minimum qualification for membership is secondary-school graduation.

Tuition credit that you don’t need to reduce your taxes to zero can be transferred to your parents/grandparents or carried forward to be used in a future year.

Canada Worker’s Benefit (CWB)

The Canada Worker’s Benefit (CWB) is a refundable credit aimed at lower-income workers. The credit is refundable, meaning that if the credit is above your net federal tax payable (federal tax less your non-refundable tax credits), you can pocket the difference as a refund.

You are eligible for the credit if, at the end of the tax year, you:

• Are at least 19 years old
• Are a resident of Canada throughout the year
• Gained working income (employment or self-employment)
• Were NOT a full-time student for more than 13 weeks in the year unless you had an eligible dependant (child less than 19 years old not eligible for the CWB)

You can get up to $1,590 if you’re single and $2,739 for a family (2024). 

If you were eligible for the credit in the prior year, the federal government will pay you half of your upcoming CWB in three instalments in July, October, and January.

Canada Training Credit (CTC)

The Canada Training Credit is a refundable credit based on your eligible tuition fees. The amount you can claim is the lesser of:

• half of the eligible tuition and fees paid in respect of the year, and
• the individual’s Canada training credit limit for the taxation year.

Starting in 2019, you can accumulate a $250 per year limit towards the Canada Training Credit (CTC).

In order to accumulate the limit, you must meet all of the following conditions:

• file a tax return for the year;
• be at least 25 years old and below 65;
• be resident in Canada throughout the year;
• have a total of $10,000 or more of income from:
  • maternity and parental benefits, and
  • working income (income from an office or employment, business income, the taxable part of scholarship income and research grants, the tax-exempt part of earnings of status Indians and emergency service volunteers, and income under the Wage Earner Protection Program Act).
• have individual net income for the year that does not exceed the top of the third tax bracket in that year ($150,473 in 2020).

The lifetime limit you can accumulate is $5,000.