December 26, 2022

What is GST/HST Credit?

The GST/HST credit is a tax-free payment for people living in Ontario, Canada, with low or modest incomes. This credit aims to help people with low or modest incomes by neutralising the amount of GST or HST that they bear throughout the year. The GST/HST credit is administered quarterly by the Canada Revenue Agency (CRA). When anyone living in Ontario files their taxes, they get automatically considered for the GST/HST credit.

This credit works as a periodic payment that offset the GST/HST paid by families with low incomes. In addition to it, you can also be eligible to pay an absolute amount of territorial and provincial credits.

Let's know more about this credit policy!

What is GST/HST Credit

While we know about GST, let's get a glimpse into the concept of HST. Many Canadian provinces mix provincial sales tax and GST to form a harmonised sales tax. These tax rates vary by province but increase the cost of products and services by a significant amount. That is why the government offers the GST/HST credit to the resident individuals.

GST/HST Credit

The Amount of GST/HST Credit

The amount of the GST/HST credit receivable by an eligible individual or family depends on various factors. It includes factors like net family income, marital status, number of children, etc.

The maximum amounts for the tax year 2020 were as given below:

1. $456 for a single individual.

2. $598 if the individual is married or has a common-law partner.

3. $157 for every child under the age of 19

Generally, the amount of this credit is transferred on the 5th day of July, October, January, and April by the Canadian Revenue Agency.

Who is Eligible for GST/HST Credit?

There is a specific eligibility criterion set by the government to determine people who can claim GST/HST credit. Let's have a look at this:

1. A family that has an adjusted net income below a set limit (it ranged from $48,012 to $63,412 for the tax year 2020) is qualified for this credit. The specific threshold limit is based on factors like marital status, number of children, etc.

2. The individual should also be a Canadian resident for income tax purposes a month before and at the beginning of the month in which the Canadian Revenue Agency makes the payment for this credit.

3. Additionally, the person must fulfill at least one of the below-given conditions:

a. The person's age is at least 19 years old.

b. He/she has/had a spouse/common-law partner.

c. The person is/was a parent and lives/lived with their child.

Procedure for Claiming GST/HST Credit

As earlier said, a Canadian resident who files an annual tax return is automatically considered for the GST/HST credit. If you are a new resident in Canada, you need to fill out a form and submit the same to a local tax centre.

The requirement of the specific form depends on the factor of the number of children the registered taxpayer has.

It can be as:

1. In case you have children, you need to have the Canada Child Benefits Application or form RC66. The RC66 form is for all child and family benefits, including this credit.

2. If you don't have children, you need to submit either the GST/HST credit application aimed at individuals who become residents of Canada or form RC151.

3. You can also claim this credit for your child by receiving the Canada Child Benefit (CCB). If your application for CCB is approved, then you can claim this credit on the part of your children.

Altogether, GST/HST credit is another important concept that you must know, especially if you are planning to move to Canada or already residing there.
Watch this space for more such articles!


Read more: GST Late fee, GST Registration, GST Process & Refunds.

Related Blog Post