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Get More 💰 With the Climate Action Incentive

Great news for residents of Manitoba, New Brunswick, Ontario, and Saskatchewan: you almost certainly qualify for the climate action incentive, a new refundable credit. This means a bigger tax refund, woo-hoo!

The amount you’ll get depends on your province of residence and the size of your family. For instance, a single person in New Brunswick will get $128 while someone in Saskatchewan with a spouse and three kids will get $685.

What’s the catch? Starting in April 2019, residents of these provinces will be charged a new federal carbon tax. This means that things like gas for your car and your heating bill will become more expensive. The climate action incentive is intended to compensate you for these increased expenses, however the federal government estimates that 8 out of 10 families will actually be better off.

Claiming this credit is as easy as answering “Yes” with SimpleTax.

Still have questions? Here’s a help post with all the deets.

Tax season's back, alright

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Find your T4s (yeah-ah)
Everybody, find your slips tonight
Tax season's back, alright

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Oh my gosh, we're back again
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Gonna bring the updates, show you how
To file your tax return, you wanna start right now?

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Is there a checklist? (yeah-ah)
How 'bout for Québec residents? (yeah-ah)
Is SimpleTax updated? (yeah-ah)
We've got everything you need, you better get those tax slips now!

(sung to the tune of the preeminent hit, Backstreet's Back)

Ahem, now that that's out of my system… another tax season is here. Mark your calendars: the CRA and Revenu Québec will start accepting returns February 18th (one week earlier than last year).

In the meantime, if you want to start preparing your return, SimpleTax 2018 is here. We've updated our Canadian tax return checklist (including a version specifically for Québec residents) to help you out.

If you haven't already, we recommend signing up for CRA My Account now so you can benefit from Auto-fill when it opens on February 18th.

This year, there are a handful of tax changes that might impact how you file your return. Here's a list of the major changes.1

Federal

  • The federal public transit amount has been eliminated.
  • The employee home relocation loans deduction has been eliminated.
  • The first time donor's super credit has been eliminated.
  • The "tax on split income" (TOSI) rules now apply to certain adults who earn income from related businesses. Learn more.

Alberta

  • Political contributions to the Senatorial Selection Campaign have been eliminated.

British Columbia

  • The children's fitness, children's fitness equipment, and children's arts amounts have been eliminated.
  • The education coaching amount has been eliminated.
  • The "BC caregiver amount" has replaced both the amount for infirm dependant age 18 or older and the caregiver amount. You can no longer claim non-infirm senior parents as dependants.

Manitoba

  • The Climate Action Incentive is a new, refundable credit for residents of certain provinces (including Manitoba). Most people can claim this credit.
  • The Manitoba tuition fee rebate and the advanced tuition rebate have been fully eliminated. You can no longer claim these credits or any related unused amounts.
  • The Manitoba odour-control and nutrient management credits have been eliminated, but you can still claim any unused amounts.

New Brunswick

  • The Climate Action Incentive is a new, refundable credit for residents of certain provinces (including New Brunswick). Most people can claim this credit.

Newfoundland

  • No provincial changes.1

Northwest Territories

  • No territorial changes.1

Nova Scotia

  • There's a new income-tested supplement to the basic personal amount, the age amount, the spouse or common-law partner amount, and the amount for an eligible dependant. You can see the calculation on the provincial worksheet in SimpleTax.

Nunavut

  • No territorial changes.1

Ontario

  • The Climate Action Incentive is a new, refundable credit for residents of certain provinces (including Ontario). Most people can claim this credit.
  • Ontario tuition and education amounts (and transfers) have been eliminated. However, you can still claim any unused provincial amounts from prior years.

Prince Edward Island

  • No provincial changes.1

Québec

  • There is a new first time home buyers' tax credit.
  • There is a new senior assistance tax credit.
  • The caregiver credit has been expanded to include dependants you support financially, even if they don't live with you.
  • The dividend tax credit rate changed part way through the year. Your slips will indicate whether your dividends were received before, or after, March 27.

Saskatchewan

  • The Climate Action Incentive is a new, refundable credit for residents of certain provinces (including Saskatchewan). Most people can claim this credit.
  • Saskatchewan tuition and education amounts (and transfers) have been eliminated. However, you can still claim any unused provincial amounts from prior years.

Yukon

  • The Yukon public transit amount has been eliminated.

1 This list only includes credits and deductions that have been introduced or eliminated; it doesn't include any changes to tax rates or tax brackets.

P.S.

Now throw your hands up in the air
Wave 'em around like you just don't care
If you want to party let me hear you yell
Because SimpleTax is back again
Yeah-y-yeah-y-yeah

Are you missing out on free money for your kids?

If you have kids, Registered Education Savings Plans (RESPs) and the alphabet soup of related programs—CESG, A-CESG, CLB, BCTESG, QESI—can seem overwhelming and out of reach. Especially if you don’t have any money to contribute anyway.

But, you might be missing out! You may qualify for free money simply by opening an RESP for your kids.

Free money

If your family income is less than $45,916, you can get up to $2,000 per child.1 The federal government will deposit $500 the year you apply for this grant (the Canada Learning Bond) and $100 each subsequent year. They’ll even throw in an extra $25 the first year to help offset costs. The younger your child is when you apply for this grant, the more they will benefit.

If you live in BC (regardless of your income), you can get $1,200 per child.2 You must apply for this grant (the BC Training and Education Savings Grant) when they are between six and nine but special extensions apply to kids born before 2010. For those born in 2007 and 2008, the application deadline is August 15th, 2018.

To receive this money you just need to open an RESP, designate your child as a beneficiary, and apply for the relevant grant. You don’t need to make any contributions to the RESP and receiving these grants will not impact your entitlement to other benefits.

Top-ups

If you have even a small amount of money to save, you qualify for a 20% to 40% top-up.3 In other words, if you invest $100, the government will deposit an additional $20 to $40 in your account. You qualify for the 20% top-up (the Canada Education Savings Grant) regardless of your family income. You qualify for the 30% or 40% top-up (the Additional Canada Education Savings Grant) based on your family income.

If you live in Québec, you qualify for another, very similar, provincial top-up program called the Québec education savings initiative.4

What’s the catch?

Nothing, really. But here are some things to keep in mind:

  • You need to open your RESP at an institution that supports all the relevant grants. Outside of Québec, we highly recommend Wealthsimple—it’s free, online, has no account minimums, and applying for the grants is as easy as checking a box when you sign up.5
  • The primary caregiver (the person who receives the Canada Child Benefit) must apply for the grants.
  • The primary caregiver (and their partner, if applicable) must file a tax return every year so the CRA can calculate your net family income.
  • Most institutions can set you up with simple investments so you don’t need to know anything about investing.
  • It’s not just limited to university, your child can also use their RESP for college and most vocational training programs. The plan can stay open for 36 years, so they have lots of time to take advantage of the money.
  • If your child ultimately doesn’t use it you can: transfer it to a sibling, transfer it to your RRSP on a tax-free basis, or withdraw it yourself and pay tax on any growth (any unused grants will revert to the government).

That’s it! Now go open that RESP!

This post contains an affiliate link to Wealthsimple, though we’re just recommending them because we love them.

1Canada Learning Bond

2BC Training and Education Savings Grant

3Child Education Savings Grant and the Additional Child Education Savings Grant

4Québec education savings incentive

5At the time of writing, Wealthsimple does not yet support the Québec education savings incentive.