Here's how Canadians can get a bigger tax refund for 2023

Do you want to save more on your taxes or get a larger tax refund?

Tax returns are due on the final day of April 2024. While the deadline is still six months out, I always advise taxpayers to start preparing early so they don’t have to rush things.

Preparing and filing your taxes before the deadline will take a lot of stress off of your shoulders, can help you get your refund quicker, and will give you more time to figure out the credits and deductions you’re eligible for.

Below, I’ll share some of the best refundable tax credits you can apply for to help you get a larger refund.

Refundable vs non-refundable tax credits

Before jumping into the list, I’d like to quickly distinguish between non-refundable and refundable tax credits:

• Non-refundable tax credits: These tax credits and deductions may be used to reduce your tax liability to zero. However, if you’ve already done so through other credits and deductions, they may not be used to contribute to your tax refund.
• Refundable tax credits: Unlike non-refundable credits, these credits and deductions may be used to increase your refund, helping you maximize the cheque you receive back from the CRA.

Non-refundable tax credits are generally available to a wider range of taxpayers and apply to common situations or expenses.

Refundable tax credits are often designed to support specific groups of taxpayers, such as those with disabilities, who care for children, or lower-income earners. These groups may rely more on tax refunds due to their unique situations.

Best refundable tax credits for the 2024 tax season

Last tax season, the CRA processed over 31 million tax returns and issued over $37 billion worth of refunds to taxpayers who either overpaid or were eligible for refundable tax credits.

The Canada Revenue Agency and the federal government provide a number of tax credits and deductions that taxpayers can take advantage of to legally pay less on their taxes or are paid monthly/quarterly.

1. First-time home buyer’s tax credit

• CRA reference: HBTC tax credit

Buying your first house can come with a lot of unexpected expenses. Aside from the down payment, mortgage, and monthly mortgage and homeowners’ insurance payments, first-time homeowners often have to furnish their home, complete repairs to make it livable, and make considerable changes to their monthly budgets.

The HBTC tax credit is designed to alleviate some of these expenses by offering a $1,500 refundable tax credit to eligible taxpayers who have never owned a house in or outside of the country.

2. Canada child benefit

• CRA reference: CCB program

Caring for children can be costly, especially with rising grocery costs and high costs of living. Unlike some tax credits that are paid annually on your CRA tax refund, the Canada Child Benefit is a monthly payment made to eligible families based on the applicants’ income marked on their previous tax returns.

Most of the time, the CCB will automatically be applied to your CRA account. However, sometimes the system has glitches. If you believe you’re eligible for the CCB and haven’t received it, you can apply for the benefit here.

3. Canada workers’ benefit

• CRA reference: CWB tax credit

The CWB offers financial relief to lower-income workers and their families. You can claim the benefit when filing your annual tax returns. Single taxpayers may receive a maximum amount of $1,428, and families may receive a maximum payment of $2,461. The amount may be reduced depending on your income threshold.

4. GST/HST tax credit

• CRA reference: GST/HST credit

Consumers are required to pay Goods and Service Tax (GST) on almost all purchases they make. The federal government charges a base tax amount, while many provinces add their own separate provincial sales tax on top of this. To simplify things, many provinces have opted to combine the two into a single Harmonized Sales Tax (HST).

To aid lower-income families, the CRA works with provincial governments to offer eligible applicants a monthly GST/HST tax credit.

5. Medical expenses

• CRA reference: Disability/medical tax credits

You may have heard of the non-refundable disability tax credit (DTC) available to those with severely limiting disabilities. However, the CRA also provides a number of refundable medical tax credits for medical expenses that weren’t covered by insurance and required you to pay out of pocket. These tax credits often include out-of-country medical expenses as well!

6. Canada training credit

• CRA reference: Canada training credit

If you’re currently enrolled in an eligible career training program, trade school, or other vocational program, you may be eligible to receive the refundable Canada training credit. This credit is designed to help students and workers offset tuition expenses, making education and career expansion more accessible.

7. Canada dental benefit

• CRA reference: Family dental benefit

The Canada dental benefit is a refundable tax credit offered to families with at least one child under age 12 who earn less than $90,000 per year and pay for their child’s dental expenses out of pocket.

Popular provincial and territorial benefits

In addition to these popular federal benefits, each province and territory has its own set of provincial tax credits, which can further reduce your tax burden or contribute to a larger tax refund. You can read more about these on the CRA’s website.

Written for Daily Hive by Christopher Liew, a CFA Charterholder, former financial advisor, and the creator of Wealth Awesome.