Personal Tax Credit: Understanding the 2023 Updates

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Dec 22, 2023
2 min
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Whether you're a newcomer to the world of tax returns or a seasoned taxpayer looking to refresh your knowledge, this article is for you!

What is the personal tax credit?

The personal tax credit is a beneficial tax measure designed to reduce the amount of tax you owe the government. These credits represent deductions that you can apply to your gross tax to reduce it. 

The more credits you have, the less tax you'll have to pay, and sometimes these savings can be substantial.

How does the personal tax credit work?

The mechanism is straightforward: each credit has a value which, when multiplied by the lowest tax rate (federal or provincial), determines the amount you can subtract from your tax payable.

Here are a few examples of personal tax credits:

  • Basic Personal Amount:
    An amount available to all taxpayers, thus reducing the basic tax. 
  • Amount for Dependents:
    If you financially support a family member, this can reduce your tax. 
  • Disability Amount:
    Intended to assist those living with a disability in covering their additional expenses.

Changes between 2022 and 2023

Every year, the amounts of credits and the tax rates can be adjusted to account for inflation and policy decisions. For Quebec and Canada, changes can translate into an increase in the basic amounts of credits or a modification of income thresholds for different tax brackets.

For the 2023 tax year, we see increases in the federal basic personal amounts and, in some cases, provincial-level changes that could affect the final sum you save.

It's important to note that tax credits evolve and we encourage taxpayers to follow these changes to maximize their tax benefits.

To fully benefit from these tax credits, it is crucial to:

  1. Be aware of the tax credits available for your situation.
  2. Accurately complete your tax return to claim these credits.
  3. Plan for the next fiscal year.

With this article, we hope you've gained a clearer understanding of the personal tax credit and how it functions.

Keep an eye on annual changes to stay up-to-date with the best practices for managing your tax situation.

For more personalized advice, don't hesitate to consult a tax specialist. And remember, savvy tax management translates to more dollars in your pocket!


How can I determine if I am eligible for the disability amount?

To be eligible for the disability amount according to the 2023 tax credit changes, you must have a long-term disability recognized by a medical certificate, which prevents you from performing one of the essential daily activities or requires a significantly longer duration than normal to complete them. This disability must significantly affect your ability to work.

What documents are needed to claim personal tax credits?

To claim personal tax credits, you will need documents such as your completed tax return, receipts or certificates proving your eligibility for certain deductions or specific credits (for example, for charitable donations or medical expenses), and the T2201 form for the disability tax credit if applicable. Make sure to include any relevant supporting documents to back up your claim.

Can several personal tax credits be combined in the same year?

Yes, it is possible to combine several personal tax credits in the same year. Taxpayers have the option to claim various tax credits that apply to their situation, such as credits for childcare expenses, medical expenses, charitable donations, and the disability tax credit, to name just a few. 

Each credit has its eligibility criteria, and if you meet these criteria for multiple credits, you can indeed combine them to reduce your tax payable.

How do personal tax credits influence the tax refund?

Personal tax credits directly reduce the amount of tax you owe on your income. They are calculated by multiplying the value of the credit by the lowest tax rate. 

If the total amount of tax credits exceeds the amount of tax you owe, this difference can increase the amount of your tax refund. Thus, the more legitimate tax credits you claim, the more you have the opportunity to reduce your tax payable or increase your tax refund.

Are there any temporary or special tax credits due to the COVID-19 situation for the tax year 2023?

For the tax year 2023, it's important to check directly with the Canada Revenue Agency (CRA) or Revenu Québec for specific updates regarding temporary or special tax credits related to the COVID-19 situation. 

Typically, these tax authorities announce support measures or tax credits adapted to the circumstances, such as those introduced during the initial phases of the pandemic. 

These measures may include credits for teleworking, support for small businesses, or assistance for self-employed individuals, but they are subject to changes based on the evolving economic and health situation.

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