Recent changes from the federal government could help many Canadians pay less tax or get a better refund from Ottawa. But the stress of gathering all your receipts and documents and filling out forms might mean missing some chances to get a better refund. This is especially true if you’re filing at the last minute before the April 30 deadline. Here’s what tax experts who spoke with CBC News say you should keep in mind as you fill out your return.
Why everyone’s taxed a little less this year
Starting with the 2025 tax year the federal government has reduced the lowest marginal personal tax rate from 15 per cent to 14.5 per cent for the first $57375 of taxable income. A 0.5 per cent reduction may not sound like much but it’s not pocket change either — especially for low and middle-income earners. It’s roughly a $300 tax savings said Sébastien Desmarais who is vice-president & tax & estate planner and business succession adviser at TD Wealth in Ottawa. If you’re filing your taxes with a partner he said it will work out to about $600 combined. And the savings can be even greater if you’re in a province that has also reduced its lowest marginal tax rate said Sharon Numerow who owns & operates Calgary’s Choice Tax Services. In Alberta for example the lowest tax rate fell from 10 to eight per cent she said resulting in a 2.5 per cent reduction overall. But Numerow said the break on your tax bill doesn’t come without a cost. Some of the credits people claim are now also worth less she said even though the change still works out to most people’s advantage.
Give and you shall receive — tax credits
Canadians are generous by nature and donate to good causes Desmarais said but many of them don’t always remember to include all of their charitable tax receipts in their return. That is money that you can access just by reducing your taxes he said. If you do miss out on reductions by not including all of your donation receipts he said you can carry them over to a future year within five years or file a request to amend your tax return in order to get a potential refund.
There is another measure that Desmarais said is intended for people who give back to their communities: the personal support workers tax credit. It was introduced in the last federal budget to recognize the vital role support workers play in their communities providing personal care and companionship for seniors and persons with disabilities or those needing convalescent care. The measure allows PSWs to claim five per cent of their eligible earnings for a refundable credit of up to $1,100. But it’s not available for people working in British Columbia or Newfoundland & Labrador or the Northwest Territories as those jurisdictions have agreements with Ottawa to raise PSW wages. Desmarais said it would be unfortunate for people caring for others to miss out on such a benefit because they hadn’t been informed.
Think of the children
There are a lot of overlooked reductions when it comes to claiming expenses related to child care Numerow said. Most people don’t realize that it’s not just daycare or preschool or things like that she said. Parents can also claim the costs of noon supervision if you’re required to pay for that as well as other school-related charges — and even summer camps.
Another thing people may not know Desmarais said is that if a child in your household is attending a post-secondary institution their tuition tax credit can be transferred. If the student doesn’t have much annual income it might be beneficial to transfer that credit to a parent or guardian he explained.He said he wants to give it to the parents.
WATCH | Filing your taxes for the very first time? Here’s what you need to know: A beginner’s guide to filing your first taxes March 3 | Duration 1:59 With tax season underway the CBC’s Tristan Mottershead dives into tips and tricks for first-time filing.
Just do it
The Canada Revenue Agency urges people to file by the April 30 deadline even if you cannot pay what you owe at that time. Failing to do so could get you a five percent penalty of your balance owing as well as one percent of that balance for each full month you are late up to 12 months. It is even higher if you have repeatedly filed late.
At the same time Numerow said people should resist the urge not to file on time if you are expecting a refund. Taxpayers complain of long waits for the CRA to fix its errors and deliver refunds She said you may miss out on credits you are eligible for that could put more money in your pocket. Plus she said the government does not give you any interest on what it owes you and you would be better off investing the money you get back. She asked why you would want the government sitting with your money.
Already thinking about next year?
Even though this year’s deadline is still coming up there are a couple of things to look forward to for the year ahead. The federal government will lower the marginal tax rate by a further 0.5 percent down to 14 percent for up to the first $58,523 of your 2026 earnings. This works out to about $420 in tax savings per person or $840 per couple.
How to beat the singles tax and prioritize yourself as a solo earner
Canada’s lowest earners will also benefit from automatic tax filing. Many low-income Canadians notably those on government assistance seldom file their taxes because they do not expect to owe the federal government anything. Desmarais said automatic filing is a way to ensure that thousands of people receive the credits they are eligible for such as the GST/HST credit and Canada Child Benefit and Canada Disability Benefit. They may not receive these benefits if they do not file a return.
