Federal personal tax credits
Federal personal allowances in Canada take the form of tax credits. The following credits apply for 2021.
|Federal personal tax credits (1, 2)||CAD|
|Basic personal (3)||1,863 to 2,071|
|Married (3, 4)||1,863 to 2,071|
|Infirm dependants age 18 and over (4)||1,102|
|Age - Persons age 65 and over (4, 5)||1,157|
|Other key credits (2)|
|Pension income||15% of eligible pension income (maximum credit is CAD 300). (5)|
|Tuition fees||15% of eligible fees (minimum CAD 100 per institution). Unused credits can be carried forward indefinitely. (5)|
|Interest on student loans||15% of the interest paid on loans under the Canada Student Loans Act and provincial student loan programs. Unused credits can be carried forward five years.|
|Medical expenses||15% of amount by which eligible expenses exceed lesser of CAD 2,421 (1) and 3% of net income (generally, expenses for any 12-month period ending in the year can be claimed). (6)|
|Adoption||15% of eligible adoption expenses (maximum credit is CAD 2,509). Must be claimed in the year the adoption period ends. (6)|
|Charitable donations (7)||15% of the first CAD 200 and the excess is at either 29% or 33% (7). Eligible donations are generally limited to 75% of net income. Unused donations can be carried forward five years. (6)|
|Government pension plan (8) and employment insurance plan contributions||15% of the lesser of the base (non-enhanced) amount payable and the required base premiums for the year (maximum credit is CAD 565; in Quebec, CAD 476 (9)).|
|Employment||15% of employment income (maximum credit is CAD 189).|
- Personal credits are indexed for inflation.
- Any unused portion of the tax credits is not refundable.
- Recently enacted legislation increases the basic/spouse/equivalent to spouse amounts from CAD 1,863 to CAD 2,071 for taxpayers with taxable income below the second top tax bracket (i.e. CAD 151,978 in 2021), with the benefit of the increased personal amounts eliminated when taxable income reaches the top tax bracket (i.e. CAD 216,511 in 2021).
- The credit is reduced if the income of the individual or dependant exceeds a threshold.
- In some circumstances, the unused portion of the credit can be transferred to a spouse, parent, grandparent, child, grandchild, sibling, aunt, uncle, niece, or nephew.
- One spouse can claim the other's medical expenses, charitable donations, and adoption expenses.
- For total charitable donations in a year exceeding CAD 200, the tax credit rate is:
- 33%, to the extent the individual has income that is subject to the federal 33% income tax rate, and
- 29% for other donations.
- Starting 2019, Canadian government pension plan contributions were increased by an enhancement that will be phased-in over seven years. The enhanced portion is deductible, while the non-enhanced base portion remains eligible for a tax credit.
- In Quebec, federal values are reduced by 16.5%. The amount shown reflects this reduction.
Provincial and territorial personal tax credits
The provinces and territories have many personal tax credits that are similar to the federal personal tax credits. However, the provinces and territories set the amounts of their personal tax credits.