15 Lesser-Known Canadian Tax Deductions and Credits That Can Save You Money

In Canada, most taxpayers are familiar with common tax deductions like RRSP contributions, medical expenses, and charitable donations. However, there are numerous lesser-known tax deductions and credits that, if you qualify, could help reduce your overall tax liability. These often overlooked opportunities could significantly lower the amount of taxes you owe or increase your refund. Below is a comprehensive list of some lesser-known tax deductions and credits that could help you save money:

1. Moving Expenses

What it is: If you moved for employment or to start a business, certain moving expenses may be deductible.
Who qualifies: Your new home must be at least 40 kilometers closer to your new job or business location.
What you can deduct: Eligible expenses include moving truck rentals, transportation, meals during the move, and temporary living costs.
Note: Moving expenses can only be deducted against employment or business income, not rental or investment income.

2. Child Care Expenses for Special Needs Children

What it is: Parents of children with physical or mental impairments can claim child care expenses to support their work, studies, or business activities.
Who qualifies: This applies to children under 16, or under 18 if they have special needs.
What you can deduct: Costs for daycare services, babysitters, or even specialized care facilities, with specific limits based on the child’s age and care requirements.

3. Union and Professional Dues

What it is: Dues paid to unions or professional associations may be deductible.
Who qualifies: This deduction applies to professionals in various sectors such as healthcare, education, law, and skilled trades.
What you can deduct: Membership fees and other necessary professional dues paid to maintain certification or professional standing.

4. Employee Home Office Expenses

What it is: If you worked from home during the year, you might be eligible to claim home office expenses, even if you are not self-employed.
Who qualifies: You must have worked from home for more than 50% of the time for at least four consecutive weeks due to COVID-19 or other reasons.
What you can deduct: You can claim a portion of your home expenses like rent, utilities, property taxes, and insurance based on the size of your home office. Some employers may also offer a flat-rate deduction (e.g., $2 per day worked from home, up to a maximum of $500).

5. Medical Expenses for Family Members

What it is: In addition to your own medical expenses, you can claim expenses for your spouse, common-law partner, and dependents. You can also claim medical costs for other family members under certain conditions.
Who qualifies: You may claim expenses for parents or grandparents who live with you and rely on you financially.
What you can deduct: Medical treatments, prescriptions, dental costs, vision care, and certain travel expenses related to medical treatments.

6. Canada Employment Credit (CEC)

What it is: A non-refundable tax credit that provides tax relief for people employed in Canada.
Who qualifies: The credit is available to most individuals earning employment income, especially those in the low- to middle-income brackets.
What you can claim: A fixed amount that helps reduce the tax burden for moderate-income earners.

7. Interest on Student Loans

What it is: You can deduct the interest paid on student loans from recognized Canadian financial institutions.
Who qualifies: This applies to students with federal or provincial loans, provided they paid interest during the tax year.
What you can deduct: The interest portion of your student loan payments is deductible, and unused portions can be carried forward to future years.

8. Tax Deductions for Disability-Related Work Expenses

What it is: If you have a disability, you may be eligible to deduct work-related expenses that help you remain employed.
Who qualifies: Individuals with physical or mental disabilities that require specialized equipment or workplace modifications.
What you can deduct: Expenses for equipment, support workers, and other necessary accommodations that help you perform your job.

9. Home Accessibility Expenses for Seniors

What it is: Seniors and individuals with disabilities can claim a tax credit for making their home more accessible.
Who qualifies: People aged 65 or older, or those who qualify for the Disability Tax Credit (DTC).
What you can claim: Renovations such as wheelchair ramps, stair lifts, and other modifications that improve home accessibility, up to a maximum of $10,000.

10. Self-Employment Expenses

What it is: If you’re self-employed or run a business, a wide range of expenses related to earning income are deductible.
Who qualifies: Anyone who operates a business or is self-employed.
What you can deduct: Costs such as office supplies, travel, phone bills, marketing expenses, and a portion of your rent if you work from home. Specialized tools, professional memberships, and educational courses related to your business are also deductible.

11. Volunteer Firefighter and Search and Rescue Volunteers Credit

What it is: Volunteers who work as firefighters or in search-and-rescue operations may qualify for a tax credit.
Who qualifies: Individuals who volunteer at least 200 hours annually in these roles.
What you can claim: A fixed, non-refundable tax credit based on the number of volunteer hours worked.

12. GST/HST Rebate for Low-Income Individuals

What it is: Low-income individuals and families may qualify for the GST/HST credit, a cash rebate designed to offset the sales tax paid on goods and services.
Who qualifies: Individuals or families with lower incomes who meet the eligibility criteria.
What you can claim: A quarterly rebate based on family income and size, providing financial relief.

13. Disability Tax Credit (DTC) and Registered Disability Savings Plan (RDSP) Contributions

What it is: The DTC reduces the tax burden for individuals with disabilities, while contributions to an RDSP can also offer tax benefits.
Who qualifies: Individuals with severe and prolonged physical or mental impairments, or those who care for someone with such impairments. The RDSP is available to those eligible for the DTC.
What you can claim: The DTC reduces your taxable income, and RDSP contributions are eligible for government matching grants and bonds, providing additional tax relief.

14. Support for Low-Income Seniors and Disabled Individuals

What it is: Seniors and disabled individuals may qualify for various credits and deductions, including the Age Credit, Pension Income Splitting, and Guaranteed Income Supplement (GIS).
Who qualifies: Individuals aged 65 or older.
What you can claim: These credits and benefits can help reduce the tax burden for seniors and disabled individuals, supplementing other tax relief options.

15. Public Transit Passes (in some provinces)

What it is: While public transit pass deductions have been removed at the federal level, some provinces still offer credits for the cost of transit passes.
Who qualifies: Residents of provinces that offer this credit.
What you can claim: Deductions for monthly or annual transit passes purchased during the year.

Important Considerations:

Tax Credits vs. Deductions: Keep in mind that tax deductions reduce your taxable income, while tax credits directly reduce the amount of tax you owe.
Keep Documentation: It’s essential to retain receipts and supporting documents for any deductions or credits you claim, as the Canada Revenue Agency (CRA) may request verification.
Consult a Tax Professional: Tax laws can be complex, so it’s wise to seek the help of a professional accountant or tax advisor to ensure you’re making the most of all available deductions and credits.

By exploring and utilizing these lesser-known tax deductions and credits, you can significantly reduce your taxable income and potentially increase your refund, making tax season a little less stressful.