The GST/HST Credit helps low to moderate-income households in Canada by providing tax-free quarterly payments. These payments are designed to offset the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) paid on various goods and services. Thanks to the GST/HST credit, eligible taxpayers can get a portion of the taxes they’ve paid back, offering financial relief. Read on to learn more about the GST Tax Credit in Canada and when the next payment is due.
What is the GST Tax Credit in Canada?
The GST Tax Credit is a tax-free quarterly payment administered by the Canada Revenue Agency (CRA). The credit is primarily aimed at helping low to moderate-income households cope with the taxes they pay on goods and services. The standard GST rate is 5%, but certain products may have higher taxes depending on the province, with HST (Harmonized Sales Tax) added in some regions.
The credit is calculated based on the size of the family, net income, and marital status. For eligible individuals, this is a way to ease the financial burden caused by the federal and provincial sales taxes that apply to most purchases in Canada.
How Does the GST Tax Credit Work?
The GST tax applies to a wide range of goods and services, with certain exemptions for basic necessities such as groceries, medical prescriptions, and certain agricultural goods. Some provinces also charge HST, which is a harmonized tax combining the federal GST and the provincial sales tax (PST). HST is typically applied at rates of 13% or higher in some regions.
The CRA distributes the GST/HST Credit as quarterly deposits in January, April, July, and October. The amount each household receives is based on several factors, including family size, income, and marital status.
When is the Next GST Payment?
GST payments are issued quarterly, with fixed payment dates set by the CRA. The next GST payment is scheduled for October, and future payments will occur every three months. Eligible individuals will receive payments on the 15th of the month during the specified quarters.
The amount individuals or families receive depends on their net income, family size, and marital status. For example:
- Single individuals: $519
- Married couples/common-law partners: $680
- Children under 19: $179 (per child)
The GST/HST Credit is recalculated annually based on income changes, so recipients must file their income tax returns to qualify.
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More About the GST Tax Credit
To be eligible for the GST Tax Credit, individuals must meet certain income thresholds. For single individuals, the income threshold is $54,704, while for couples, the threshold is $72,244. In addition, applicants must be Canadian residents and file income tax returns for the previous year.
Newcomers to Canada should also apply by filling out the appropriate forms to ensure they receive the GST credit. If there are children in the household, the applicant must complete the Canada Child Benefit application (Form RC66) to apply for the GST credit and other child benefits.
The GST/HST Credit provides much-needed financial relief for low to moderate-income Canadians by reducing the impact of sales taxes on essential goods and services. Payments are made quarterly, based on income and family size, to help eligible recipients manage higher living costs. Be sure to file your taxes on time and keep your family information updated to ensure that you receive the credit you qualify for.
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