General information only — not financial advice for your situation.
This is a learning tool. Always check CRA My Account records and talk to a qualified professional for your own numbers.
Plain English
An amount that directly reduces the tax you owe, dollar for dollar. Unlike a deduction, it doesn't matter what bracket you're in — a $500 credit saves everyone $500.
Technical definition
A tax credit reduces the final tax liability directly, as opposed to a deduction which reduces taxable income. Credits may be non-refundable (reduce tax to zero but no further) or refundable (paid out even if tax owed is zero). Most federal non-refundable credits are calculated at the lowest personal tax rate of 15%.
Examples
- • The basic personal amount credit of $16,452 at the 15% federal rate reduces your federal tax by $2,468.
- • A $1,000 non-refundable credit reduces your $3,000 tax bill to $2,000. If your bill were only $800, it drops to $0 — the extra $200 is lost.
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About this site
Every number on this site is sourced from CRA publications, the Income Tax Act, or provincial fiscal releases. We show the math, cite the sources, and never tell you what to do with your money.