5 Types of Canadian Tax Credits You Probably Haven't Heard of Before

Think you know all the tax breaks? We bet one of these will surprise you.

1. The Digital News Subscription Tax Credit

The Digital News Subscription Tax Credit (DNSTC) is a non-refundable tax credit initiative developed by the Canadian government to support and preserve Canadian journalism.

To qualify for this tax credit, you must have purchased a qualifying digital news subscription from a qualified Canadian Journalism Organisation (QCJO) during the tax year. Eligible individuals can claim up to $500 in digital news costs per year at a maximum rate of 15%, which translates to $75 in tax credit. 

Note that this tax credit is non-refundable and can only reduce what you owe. It is also only available for subscription expenses after 2019 and before 2025.

2. Cultural and Ecological Gifts Tax Credit

Under this program, the Canadian government offers tax incentives to individuals or organizations that contribute outstanding cultural gifts or ecologically sensitive land(s) that help preserve Canada’s heritage and environment. 

Cultural gifts must be of outstanding significance or national importance to qualify. These include outstanding artwork or historically significant documents and must be donated to certified Canadian cultural institutions. 

For land gifts to qualify, the Minister of the Environment must certify them as ecologically sensitive. The recipient—private or government entities—must also be an eligible organization that can properly care for such lands. 

3. Volunteer Firefighter’s or Volunteer Search and Rescue Worker’s Tax Credit

These are non-refundable tax credits that the Canadian government uses to reward the efforts of volunteers in their community. To qualify for this tax credit, you must complete at least 200 hours of eligible rescue volunteer firefighting or search and rescue services in the year. This includes responding to and being on call for firefighting, search and rescue, and related emergency calls as a volunteer. 

Eligible participants can claim $3,000 on their income tax return, which is calculated as a 15% tax credit and can result in up to $450 in tax savings.

It should be noted that you can only claim either the volunteer firefighter or search and rescue credit, but not both. 

4. Work-From-Home Tax Deduction

Remote workers in Canada can get a tax deduction for home office expenses. A tax deduction is any expense that reduces your taxable income. This differs from a tax credit that reduces your income tax payable. 

To claim home-expenses deduction, an employee must:

• Spend greater than 50% of their time working from home

• Be required by their employer to work from home

• Fill out a complete declaration of conditions form

Employees can claim a tax deduction on heat, water, home internet access fees, maintenance, minor costs, etc. 

5. The Adoption Expense Tax Credit

The Adoption Expense Tax Credit is one of many ways the Canadian government supports family expansion.

This non-refundable credit system allows adoptive parents to claim up to $16,729 (adjusted yearly for inflation) in eligible adoption expenses. These expenses include adoption agency fees, legal and admin fees, travel fees, etc. You qualify for the Adoption Expense Tax Credit if you have incurred adoption expenses in the tax year for adopting a child — recognized by a provincial or territorial government in Canada — under 18. Thanks to this system, new parents can focus more on the joy of starting a new family without worrying about the financial pressure. 

PS: This credit is non-refundable and can only be used to reduce income tax payable. 

Source: Dexteritas