What is the GST / HST Credit?
When purchasing goods and services in Canada, you are often charged with an additional amount on top of the cost of the item or service. This additional charge is the GST / HST, a federal sales tax. The standard amount for GST is 5%, while some provinces combine this with provincial tax in a Harmonized Sales Tax (HST). In Ontario, HST is 13%.
The GST / HST tax credit is a tax-free quarterly payment by the CRA (Canada Revenue Agency) that helps individuals and families with low or modest income offset all or some of the GST / HST they pay throughout the year in Canada.
Abbreviated from the goods and services tax / harmonized sales tax credit, the GST / HST credit is paid quarterly to qualifying families and individuals. It may also include payments from other provincial and territorial programs.
This tax credit can be significant for low income families and individuals. It’s imperative to ensure you meet all the GST / HST eligibility requirements and know important dates and deadlines so you do not miss out on this important tax credit.
What is the GST / HST Credit Eligibility?
Who gets the GST / HST credit in Canada? You are eligible for this credit if you are a resident of Canada for income tax purposes in the month before and at the beginning of the month in which the CRA makes payment, and one of the following also applies:
- You are at least 19 years old
- You have (or had) a spouse or common-law partner
- You are (or were) a parent and live (or lived) with your child
When you file your taxes, you are automatically considered for the GST / HST tax credit. Once an individual turns 18, they should file income taxes even if they have no income to report. This way, they are immediately eligible for the GST / HST credit amount in the first pay period after they turn 19.
Beginning in 2014, the CRA automatically determines if an individual is eligible to receive the GST / HST credit. If an individual fits the GST / HST credit eligibility, they will receive a notice of determination. In the case of eligible couples (spouses or common-law), the notice of determination and credit will be paid to the spouse whose tax return is assessed first.
A notice will not be sent to ineligible individuals automatically, but these individuals can obtain one upon request so that they may object to their ineligibility if necessary.How to Get the GST / HST Credit in Canada
When you file your income taxes and meet the above qualified criteria, you are automatically considered for the GST / HST credit. You will receive the notice of determination and payments via direct deposit or by mailed cheque quarterly.
If you are a newcomer to Canada or an international student, you may also be eligible to get the GST / HST credit. To apply, follow these steps:
- Apply for a Social Insurance Number (SIN)
- If you do not have children under the age of 19, fill out application form RC151, GST / HST Credit Application for Individuals Who Become Residents of Canada
- If you do have children, fill out RC66, Canada Child Benefits Application
- Mail the completed form to your tax centre
As a newcomer to Canada, you have up to three years to ask for a retroactive payment. You may file your application starting for the year that you became a resident of Canada.
You may also claim the GST / HST credit for a child living with you who is under 19 years of age. All of the following must apply at the beginning of the month in which the CRA makes payment. The child:
- Is your child, or is dependent on your or your spouse for support
- Is under 19 years of age
- Has never had a spouse or common-law partner
- Has never been a parent to a child they live with
- Lives with you
Each eligible parent in a shared custody situation may get half of the GST / HST credit for that child.
A child is automatically registered for the GST / HST credit if a parent or guardian gave consent on their provincial or territorial birth registration form, or when a parent or guardian applies for the Canada child benefit.
If you become primarily responsible for the care of a child or give birth to a child, you can register them for the GST / HST tax credit directly by applying for the Canada child benefit or mailing RC66, Canada Child Benefits Application, to your tax centre.
A change in an individual’s situation may case the CRA to recalculate the GST / HST credit, such as divorce, marriage, death, and childbirth.
Determining your GST / HST credit eligibility and how to get the GST / HST credit in your unique situation can be complex. If you are a newcomer to Canada, became primarily responsible for the care of a child, or have experienced a change in situation, a tax accountant can help you navigate the complicated GST / HST credit forms and requirements.
GST / HST Credit Calculator
The GST / HST credit amount an individual is eligible for depends on a number of factors, including their marital status and the number of children they have. An individual receives an amount based on their annual income and number of children in their care, while a family receives an amount based on their combined family net income and number of children in their care. There are GST / HST credit income limits imposed by the CRA depending on an individual’s unique situation.
The Canada Revenue Agency provides a GST / HST credit calculator to help you determine your GST / HST credit amount for a given year.
Access the GST / HST credit calculator here. Consult with a tax accountant for more detailed information for your situation.
What are Important GST / HST Credit Dates?
The GST / HST credit is paid quarterly by the CRA in July, October, January, and April for the previous tax year. For example, someone who filed income tax for 2019 will receive their first GST / HST credit amount in July 2020 and their last in April 2021 for the 2019 tax year.
If your GST / HST credit calculated in July is less than $50 per quarter, the CRA will pay for the total payment period in July in one lump sum.
Our tax accountants at Accountor CPA expertly navigate the criteria and regulations surrounding the GST / HST tax credit. Get the credits you and your family deserve. Contact Accountor CPA for a free consultation and learn how we can simplify your taxes and optimize your tax return.