What is the difference between refundable tax credits and non-refundable tax credits?
Most tax credits are non-refundable. This means that once you’ve reduced the income tax that you owe to $0, any remaining credits can’t be used. Another way to think of it, is that you can never use a non-refundable tax credit to get a refund.
On the other hand, a refundable tax credit will pay out even if your taxable income is $0. A common example of this is the GST/HST credit. This credit is based on your family income, which means the combined total of both you & your spouse or common law partner’s net income. The GST/HST credit has to be applied for every year on your tax return form. If you missed filling it out, you can file a T1 Adjustment at any point during the year. So if you are over the age of 19, be sure to file a tax return to gain access to these credits.
If you want more information about the income levels for the GST/HST credit, click here.