5 big changes you need to know about at tax time this year, according to an expert

Canadian workers benefit

Initially, the Canada workers benefit (CWB) is a benefit for low-income workers in Canada that gives them a little extra money. This year it was “improved by increasing the ‘removal’ thresholds,” Vittoratos said.

“The credit is set up to shrink as you earn income and eventually fades away,” the tax expert continued.

“That means more workers will be eligible for credit, and workers who are already eligible will likely get a higher amount of credit.”

With this new phase-out plan, the government also has an “exemption for secondary income”.

This “allows the spouse or common-law partner with lower working income to exclude up to $14,000 of their working income in calculating the credit,” Vittoratos explained. “It will also result in more couples being eligible for ACT or getting a higher amount if they are already eligible.”

Eligible educator credit

This is a more specific benefit for educators that is under review this year.

The School Supplies Tax Credit for Eligible Educators allows elementary and secondary teachers and other eligible educators to claim up to $1,000 of what they spend on school supplies out of their own pocket.

What’s new? Well, according to our tax wizard, the tax credit has been increased from 15% to 25%, with that same total claim cap of $1,000.

“Therefore, the maximum amount you can claim ranges from $150 to $250,” Vittoratos said.

Along with this, the removal of the requirement that supplies must be used in a school or daycare setting means that items such as external hard drives, webcams, headphones, speakers and more can now be claimed.

Climate Action Incentive

The Climate Action Incentive Payment is also getting a major update. It will no longer be issued to you as a credit on your tax return.

“Starting July 2022,” Vittoratos explained, “this refundable credit will instead be issued as a quarterly benefit. Which means you will no longer get this credit on your tax return, but rather be deposited in quarterly installments on your Bank account.”

However, to benefit from it, you must still file your tax return.

Home office credit

There are two ways to claim the home office expense credit if you work from home more than 50% of the time, says Vittoratos.

One is the simplified method, where you simply claim $2 a day for each day you worked from home, and the other is the detailed method, which requires additional forms and receipts to claim the exact amount you have spent on your home office.

The simplified version of home office credit has been updated to take you from a maximum of $400 to $500.

COVID-19 Benefits

Finally, if in 2021 you repaid any amount of COVID-19 benefits you received in 2020, you can also claim it on your tax return.

With this, you have the option of claiming this amount in either the year you received the benefit or the year you repaid the amount owed.

“Normally, you can only deduct repayment of these amounts in the year they were repaid,” Vittoratos said.