10 things to know before you file your tax return this year

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Tax season is in full swing. Electronic filing started on Feb. 21 and the Canada Revenue Agency to date has already received a little more than 2.4 million returns, 95 per cent of them filed electronically. Just over two-thirds of tax filers have claimed a refund on their 2021 returns, with the average refund coming in at $2,145.

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Here are 10 things to keep in mind as you work your way through this tax season.

The deadline

The normal tax-filing deadline for most individuals is usually April 30, but you have until May 2 this year to file because April 30 falls on a Saturday. If you or your spouse or common-law partner had self-employment income in 2021, you have until June 15 to file your return(s). In either case, if you have a balance owing, it must be received or processed at a Canadian financial institution on or before May 2, 2022 to be considered paid on time.

COVID-19 benefits

If you received COVID-19 benefits, such as the Canada Recovery Benefit, administered by the CRA in 2021, you should have received a T4A tax slip from the government in February. (Quebec residents would also have received an RL-1.)

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It’s important to keep in mind that some tax was withheld at source when the COVID-19 benefits were paid, but you may end up owing additional tax on top of that. The CRA has acknowledged this could present significant financial hardship for some taxpayers. Affected individuals may wish to take advantage of the CRA’s expanded payment arrangements, which will give you more time and flexibility to pay the tax owing, based on your financial situation.

One-time payment for seniors

Seniors who were eligible for the Old Age Security pension in June 2021 and were born on or before June 30, 1947, (meaning they will turn 75 by July 1, 2022) received a one-time $500 payment in August 2021. All eligible seniors, regardless of income level, got the $500 payment, which was meant to “support older seniors’ higher expenses,” and was estimated to apply to 3.3 million people.

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Most eligible seniors will have by now received a T4A slip from Service Canada for this amount, but some slips may have been delayed and will go out during the week of March 14, 2022. A small number received an incorrect slip, with duplicate amounts in boxes 018 and 205. Amended slips were issued to these individuals, so make sure you use the correct slip when completing your return.

Climate action incentive payment

If you’re a resident of Alberta, Saskatchewan, Manitoba or Ontario, you no longer claim your climate-action incentive (CAI) on your tax return. Instead, you will automatically receive your CAI payments four times a year, starting in July 2022, provided you file a 2021 return and qualify for payments. The July payment will include a retroactive amount for April 2022, and future payments will be made on the 15th of April, July, October and January.

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Home-office expenses

If you worked from home in 2021 due to COVID-19, you may be eligible to claim a deduction of up to $500 annually for home-office expenses in 2021 using the temporary flat rate method. Or, you may be able to claim your actual expenses under the detailed method.

Eligible Educator School Supply Tax Credit

This tax credit was expanded and enriched for 2021 to allow teachers to claim a 25-per-cent refundable tax credit for purchases up to $1,000 on eligible teaching supplies bought in 2021. The government also expanded the list of eligible teaching supplies to include electronic devices, such as calculators, digital timers and tools for remote learning.

Add your email address for My Account

As a fraud prevention initiative, it’s mandatory as of Feb. 7, 2022, to provide the CRA with an email address to access the online My Account portal. This allows the CRA to inform taxpayers, in real time, of any changes made to their account to help ensure such changes are authorized. The CRA has also added multi-factor authentication for all users and you’re now required to enter a one-time passcode each time you sign into the CRA’s digital services.

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Taxpayers have the option to receive either paper mail or email notifications when CRA correspondence is available for viewing electronically in My Account. But be forewarned: if you select the electronic notification option and miss an important CRA e-mail, you could ultimately be on the hook for interest and penalties, as a 2021 case has shown.

Auto-fill my return

This CRA service has been expanded for 2022, and can now provide downloaded tax slip information, including registered retirement savings plan (RRSP) contribution receipts, for 2021 and the previous five tax years (instead of four), which could help when filing older returns.

Automated callback service

If you get frustrated waiting on hold to speak to a CRA agent, a new service (“when available”) may allow you to request a callback. The service may be available to callers on the individual tax, benefits and business enquiry lines, but only at certain times of the day and only when wait times reach a certain (unspecified) length.

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Digital news subscription tax credit

Finally, if you’re reading this article online and you’ve paid for the digital newspaper app or website, you may be able to claim the digital news subscription tax credit, worth 15 per cent on qualifying expenses up to $500 for amounts you paid in 2021. You must have paid the amounts to a qualified Canadian journalism organization for a digital news subscription with content that is primarily written news. A list of qualifying digital news subscriptions can be found online.

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If your subscription includes both print copies of the paper as well as online digital access, only the cost of a standalone digital subscription (or a comparable one) is an eligible expense. If there’s no standalone or comparable subscription, you can only claim 50 per cent of the cost as an eligible expense.

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com 

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