Credits to remember and errors to avoid as tax filing season gets underway

Canada Revenue Agency (CRA) national headquarters is seen in Ottawa on Friday, June 28, 2024. THE CANADIAN PRESS/Sean Kilpatrick

It’s the time of the year again to gather your receipts and hope for a big refund. The official opening of tax-filing season gets underway with electronic filing service Netfile set to open on Monday.

When you start preparing your return, do the “messy part” first, according to Brian Quinlan, a partner and chartered professional accountant with Allay LLP.

That means gathering all the information that can’t be found on the Canada Revenue Agency website, including receipts for everything from medical expenses to donations and child-care expenses to union dues.

Other forms, such as a T4, a T4A for pension-related income, T5s for interest and investment income and T3s for trust-related information can generally be accessed through the CRA website under your MyAccount profile.

“Most of those come electronically now from your bank, they may come in the mail or your employer may send you a PDF of your T4 now. But the good thing is, even if you perhaps moved or didn’t get a slip, odds are pretty good it’s on CRA’s website,” Quinlan said in an interview.

The tax-filing deadline is April 30, while the deadline for self-employed individuals to file is June 16 since June 15 falls on a weekend this year. If you are self-employed and think you will owe taxes, it’s important to remember that interest on any money owed starts accruing at the end of April despite the filing deadline being in June.

For those who want to reduce their tax bill for the 2024 tax year, the RRSP contribution deadline is March 3.

One of the major changes for this filing season is the delay of the capital gains inclusion rate.

On Jan. 31, the federal government said it would defer until 2026 the implementation of a hike to the capital gains inclusion rate which would have made two-thirds of capital gains over $250,000 subject to tax. Instead, 50 per cent of all capital gains remain subject to tax, unchanged from the 2023 tax year.

The CRA has noted its systems will not be ready to accept tax returns from individuals that report capital gains or losses until late March because of the changes and will grant interest and penalties relief until June 2 to allow more time to file.

Another change this tax season is a two-month extension granted by Ottawa to get a charitable donation tax receipt, stemming from the Canada Post strike that halted mail delivery late last year.

Quinlan said a lot of charities didn’t get as much money as they usually do in December because of the mail strike, so the government made the change.

“So a donation made in the first two months of 2025 can be claimed either on your 2024 return or your 2025 return,” he said.

When mapping out which credits you’re eligible for, remember some can be grouped together or transferred between spouses, or transferred from kids to maximize a return.

This can include grouping charitable donations or medical expenses together to claim them on one return or transferring tuition credits from a low-income student to a higher-earning parent.

Don’t be a “selfish tax planner,” Quinlan said.

“I think you just can’t sit and do your return in a silo or in isolation. You have to look at the returns of all your family,” he said.

H&R Block tax specialist Yannick Lemay said there are more than 400 tax credits and deductions available to taxpayers, so it’s easy to “get lost” and miss some you might be eligible for.

Lemay said one of the biggest myths about tax season is that it doesn’t matter if you miss the filing deadline if you know you don’t owe taxes.

In fact, he said, not filing your taxes on time could have negative consequences.

Even if you had no income to report for 2024, you need to file an income tax return to receive certain benefits such as the Canada child benefit, GST/HST tax credit and the Canada Carbon Rebate.

“They could be missing out on some credits and benefits that are being paid by the federal or provincial governments, but also sometimes there could be penalties that apply to your tax return even if you don’t owe taxes to CRA,” he said.

This report by The Canadian Press was first published Feb. 23, 2025.

Michelle Zadikian and Ritika Dubey, The Canadian Press