The Tax Blog for Smart Canadians

Collect your refund by claiming eligible credits

If you worked during the year and earned a low income you should be able to recoup most if not all of your payroll tax as a refund on your tax return, especially if you made less than the basic personal amount ($16,129 for the federal tax return in 2025).

On top of this, you will likely be eligible for certain refundable credits such as the Canada Worker’s Benefit (CWB) and Refundable Medical Expense Supplement which are based on your income level (targeted to lower-income taxpayers) and your working income. These credits are added to your payroll tax above as a refund.

Eligibility for future credits and deductions

Certain credits and deductions can be “banked” when not needed and used in future years. This is the tax concept we call carry forwards.  Examples are:

• RRSP deduction
• Capital and non-capital (business) losses (deduction)
• Tuition credit
• Loan interest on student loans (credits)
• Donations (credits)

For the majority of these credits/deductions, the amounts that you can bank and carry forward must be declared on the tax return first, even if you don’t need them in the current year. Once declared, the CRA will record them in your file to be used in a future year.

Application for benefits

For many benefits paid out by the federal government, such as GST credit, Guaranteed Income Supplement (GIS), Canada Child Benefit (CCB), and for some provincial equivalents, a tax return is required to be filed in order to apply. These amounts are tax-free benefits that are based on your yearly income.

The advantages are clear to file a tax return regardless of your tax situation. It’s also never been easier to file your tax return, especially if you have low income. You can use UFileFREE to file your tax return for free if you meet certain criteria such as total income of less than $20,000, you are a full time student, you have a very simple tax return, or you’re a first time filer. 

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