Economical SR&ED Tax Credit Claims for Canadian Businesses

Online banking is the simplest route: add the CRA as a payee, select the account and tax year precisely, and pay from your chequing account. CRA My Payment takes debit card payments, and pre-authorised debit can be scheduled in My Account or My Business Account for a single amount or a run of instalments. Corporations and GST/HST registrants use the same channels under their business number. Keep the confirmation number and allow several days for the payment to post.

As the rules stand for the 2025 tax year filed in 2026, the late-filing penalty is 5% of the balance owing plus 1% of that balance for each full month the return is late, to a maximum of 12 months, so 17% at worst. It rises to 10% plus 2% per month for up to 20 months, a 50% maximum, but only where the CRA formally demanded the return and had already charged a late-filing penalty for any of the three preceding tax years. Interest compounds daily.

The basic personal amount is a non-refundable credit that shelters a base level of income from federal tax, so income below it carries no federal tax. The amount is indexed every year, and the enhanced portion is phased out across the second-highest federal bracket, so taxpayers in the top bracket receive only the base amount. Each province and territory sets its own version. On Form TD1 you claim it so your employer withholds less; claim it with one employer only, or too little tax is withheld.

Medical costs give a non-refundable credit rather than a deduction. Eligible items include prescription drugs, dental work, eyeglasses and contact lenses, fees paid to medical practitioners authorised to practise, private health plan premiums, attendant care and travel for treatment unavailable locally. Over-the-counter products and most cosmetic procedures do not qualify. Only the portion above an income-based threshold counts, the claim period may end at any point in the tax year rather than following the calendar year, and pooling the family claim on one spouse usually helps.

Yes, when the unit is rented out. Strata or condo fees for a rental property are a current expense against the rental income, along with mortgage interest, property tax, insurance and repairs. If you rent the unit for only part of the year, or rent one unit and live in another, prorate the fees. A special assessment for a capital improvement is not a current expense; it is added to the building's cost.

The spouse or common-law partner amount is a non-refundable credit you claim when you support a spouse whose own net income is low. The claim starts at a set base amount and is reduced dollar for dollar by your spouse net income, so it disappears once their income passes that level. Its cash value is the claim multiplied by the lowest tax rate, federally and again provincially. Take the current base amount from the federal schedule for the year you are filing.

Yes. EI benefits stack on top of any other income for the year, so they can shrink a refund or create a balance owing, because the tax Service Canada withholds is usually less than the rate that applies once the benefits sit above your employment income. Benefits also count in the net income that income-tested credits and benefits are based on. Where the T4E shows a benefit repayment rate, part of the regular benefits must be paid back.

No GST/HST applies. Menstrual products, including pads, tampons, cups and liners, are zero-rated, so neither the federal GST of 5% for 2025 and 2026 nor the provincial part of the HST is charged on them. The provincial sales tax provinces generally exempt them as well, though each keeps its own exemption list. If a receipt shows tax on these items, ask the retailer to correct it and check the CRA's zero-rated guidance.

Yes, in part. The rate applied to the lowest federal bracket was cut part-way through 2025, so the 2025 return uses a blended rate for that bracket and the full reduction applies from 2026 onward. Bracket thresholds and most credit amounts were also indexed. Separately, the proposed increase to the capital gains inclusion rate was never enacted, so one-half remains the inclusion rate for the 2025 and 2026 tax years. CRA's federal tax rates page gives the exact percentages per year.

No credit exists simply for marrying. What changes is that you file as a couple. You may claim the spouse or common-law partner amount if your spouse has little income, transfer certain unused credits such as age, disability, and tuition amounts, pool medical expenses and donations on one return, and split eligible pension income. Marriage or common-law status also combines your incomes for income-tested payments, which can reduce the GST/HST credit and the child benefit.

Adoption costs are not a deduction, but they support a non-refundable federal credit and several provinces offer a parallel one. Eligible amounts include fees paid to an adoption agency recognised by the province, court and legal costs, mandatory immigration expenses for the child, and reasonable travel and living costs for the child and the adoptive parents. The claim is made for the tax year the adoption period ends, is limited to a maximum per child, and can be split between two parents.

Employment income is taxed at source, so the levers are deductions and credits rather than avoidance. RRSP contributions reduce taxable income, and Form T1213 asks the CRA to lower the tax withheld from your pay for deductions you know you will claim. The CRA publishes no processing standard for it, so allow several weeks and send the request in the autumn before the year it applies to; a letter of authority covers one tax year only. Union dues, professional fees, child care and employer-approved employment expenses also help.