It’s true. Not only that, but the Canada Revenue Agency (CRA) allows corrections and omissions for a 10-year period … so if you missed out on the deductions or tax credits available to Ontario teachers this year’s return, you can simply add them to next year’s.
Here is your eligible educator tax credit checklist for Ontario teachers.
As of the 2021 tax-filing year, eligible teachers and early childhood educators can now claim 25% of up to $1,000 in eligible school supply expenses, up to a maximum tax credit of $250 a year (previously the refundable tax credit was 15%). The list of eligible supplies has also been expanded to include electronic devices such as graphing calculators, digital timers, and tools for remote learning.
While you cannot claim this credit for tax years prior to 2016, you can bank it for subsequent years.
In order to be eligible for this credit you must:
For your supplies to be eligible for this credit, they must be:
Examples of eligible supplies include:
Tip: if you plan on claiming this credit, the CRA might ask you to provide certification that validates your eligible supply expenses. So, it’s a good idea to request certification before completing/submitting your return.
You’ve paid your dues—now ‘get paid’ for paying them. Membership dues for unions can be deducted on income tax returns. This deduction is officially known by the CRA as ‘Annual Union, Professional, or Like Dues’.
Are you an education member doing double duty at more than one school? If you have to travel to 2 different schools as part of your contract, you may be eligible to deduct travel costs.
If you have an official tutoring business on the side operating out of your home (‘official’ as in your tutoring services are registered as any other home business would be), you can claim part of expenses such as rent, electricity, heating, and maintenance. You cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.
Tip: if your home tutoring space is 15% of the total square footage of your home, you can deduct 15% of your home tutoring expenses from your taxable income. This deduction is officially known by the CRA as ‘Work-Space-In-The-Home Expenses’.
The monthly premiums deducted from your salary (or that you pay in retirement) for health and dental plans count as medical expenses and can be claimed under the Medical Expense Tax Credit if these expenses exceeded either $2,479, or 3% of your net income or that of your spouse’s (whichever is lowest). The tax credit is 15% of the amount remaining. As of 2019, one can claim service animals as a medical expense. If you’re a retired educator, you may benefit from this tax credit the most since your pension income is lower than what you were making while working.
New for the 2022 (and subsequent) tax-filing years – the First Time Homebuyer’s Tax Credit (HBTC) has changed. The Budget proposes to increase the amount used to calculate the HBTC to $10,000, which would provide a tax credit of up to $1,500 to eligible home buyers.
If you’re operating a business out of your home, you can now claim more Capital Cost Allowance on items like office equipment, furniture and computers. Any of these items purchased between November 21, 2018 and 2024 will be eligible for 150% of the normal CCA rate in the year of purchase.
For an up-to-date list of all qualifying tax credits, be sure to visit the CRA’s website
If you’re still unsure whether you qualify for certain credits, be sure to talk with your accountant or refer to the CRA’s website. For those of you expecting a refund, don’t put it to waste. Educators Financial Group can help you make that extra money work extra hard for you.
Sources:
https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-4-businesses/series-4-businesses-folio-2-deducting-business-expenses/income-tax-folio-s4-f2-c2-business-use-home-expenses.html
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/accelerated-investment-incentive.html