How to apply for GST/ HST credit in 2023?

Chapter 1: 10 tax benefits that low-income Canadians should be aware of

Chapter 2: Applying for Canada Workers Benefit

Chapter 4: All you need to know about Canada Child Benefit

Chapter 5: 8 ways in which Canada’s New Affordability Plan helps make life cheaper for you

Chapter 6: All that you need to know about Canada Dental Benefit

Chapter 7: Ontario – Income Tax Brackets, Rates, & Provincial Tax Credits

Chapter 8: Quebec – income tax brackets, rates, and provincial tax credits

Chapter 9: Understanding the Tuition Tax Credit in Canada: All You Need to Know

Chapter 10: Understanding Canada Training Credit

Chapter 11: Maximizing Your Tax Return: Uncovering the Benefits of Seniors' Tax Credits in Canada

Chapter 12: Canada Taxes 2022: Federal Tax Brackets, Rates and Credits

What is GST/ HST credit?

The GST/HST credit, also known as the Goods and Services Tax/Harmonized Sales Tax credit, is a tax-free payment provided by the Canadian government to help low and modest-income individuals and families offset some of the sales taxes they pay. This credit is designed to provide financial assistance to those who may be financially disadvantaged due to the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST), which are federal and provincial sales taxes in Canada. The GST is a federal levy on goods and services, whereas the HST is a consolidated sales tax implemented in select Canadian provinces, amalgamating the federal GST with a provincial sales tax into one unified tax system. The amount of the GST/HST credit you receive is based on your family income, including the income of your spouse or common-law partner. The government calculates your credit based on your previous year's income tax return.

The GST/HST credit is tailored to offer additional support to individuals and families with modest incomes. As your earnings rise, the credit amount progressively diminishes until you no longer meet the eligibility criteria.

GST/ HST credit eligibility

In order to qualify for the GST/HST credit, specific requirements must be fulfilled. These conditions encompass being considered a Canadian resident for income tax purposes in the month before and at the commencement of the month in which the Canada Revenue Agency (CRA) issues the payment. Additionally, one of the following criteria should apply to you –

• You are at least 19 years of age
• You have a spouse or common-law partner
• You are a parent and either presently reside with your child or have done so in the past

The GST/HST credit is specifically designed to provide financial support to individuals and families with moderate to low incomes. If you are a single individual earning $52,255 or more before taxes, you are not eligible for this credit. Similarly, if you are a married couple with four children, your combined annual net income should not exceed $69,015 to qualify for the credit.

How much is GST/ HST credit?

The GST/HST credit you are entitled to hinges on several variables, taking into account your family's net income, marital status, and the number of dependent children in your household. For the 2021 tax year, spanning from July 2022 to June 2023, the maximum credit amounts are as follows -

• $467 for individuals who are single
• $612 for those who are married or in a common-law partnership
• An additional $161 for each child under the age of 19 living in the same household.

Your GST/HST credit is calculated based on these criteria, with varying amounts allocated depending on your specific circumstances, ultimately providing essential financial assistance to individuals and families with different income and family structures.

Apply for GST/ HST by simply filing your return

In most cases, to receive the GST/HST credit on an annual basis, it is generally adequate to ensure that you file your taxes promptly, even if you have no income to report. However, newcomers to Canada are required to go through a specific application process. If you are a recent resident of Canada, follow these steps to apply for the GST/HST credit.

1. Complete one of the following forms –

• If you have children: Fill out and sig Form RC66, the Canada Child Benefits application, which covers all child and family benefits, including the GST/HST credit.
• If you do not have children: Fill out and sign Form RC151, the GST/HST Credit Application designed for individuals who have recently become residents of Canada.

2. Send the completed form to your designated tax center.

How to claim GST/ HST credit for your child?

If you have previously applied for and received the Canada Child Benefit (CCB), it's possible that you've already been benefiting from the child-related component of the GST/HST credit. Nevertheless, if you did not apply for the CCB, have recently welcomed a new child into your family, or if a child has started residing with you, it is imperative that you take the necessary steps to manually register the child in order to start receiving the GST/HST credit related to them. This ensures that you receive the appropriate financial assistance associated with your child's eligibility.

Here are the steps for manual registration –

• Log in to your CRA My Account
• Navigate to the "Apply for child benefits" section
• Verify and update your contact information, marital status, and citizenship details
• Provide your child's name, gender, date of birth, and place of birth
• After completing the application, you can track its status within your CRA My Account

Alternatively, there are other methods to register a child for the GST/HST Credit –

• Complete and sign Form RC66, the Canada Child Benefits Application
• Mail the filled-out form to your local tax center.

The process can be as simple as checking a box on your annual tax return. If you meet the eligibility criteria for the credit, the CRA will notify you accordingly.

How is GST/ HST credit calculated?

Here's a general overview of how the GST/HST credit is calculated –

• Family Net Income: The primary factor in the calculation is your family net income, which includes the combined income of you and your spouse or common-law partner, if applicable. This income is reported on your annual income tax return.
• Marital Status: Your marital status, whether you are single, married, or in a common-law partnership, is considered in the calculation. Different thresholds and credit amounts apply to each marital status category.
• Number of Children: The presence of children in your household is a significant factor. You receive an additional credit amount for each child under the age of 19 living with you.
• Phase-out Threshold: The GST/HST credit is designed to provide more assistance to individuals and families with lower incomes. As your family net income increases, the credit amount gradually decreases until you are no longer eligible. This is known as the "phase-out threshold."
• Annual Review: The CRA conducts an annual review to determine your eligibility and calculate the credit amount. This review is based on your income reported in your income tax return for the previous tax year.
• Payment Frequency: The GST/HST credit is typically paid out quarterly, with payments made in January, April, July, and October of each year.

It's important to note that the specific income thresholds, credit amounts, and phase-out rates may change from year to year. The CRA provides updated information on their website and in tax guides to help individuals understand their eligibility and the amounts they can expect to receive.

When will I get my GST/ HST credit?

The GST/HST credit is paid four times per year by cheque or direct deposit. Payments are sent on the following dates this year –

• January 5, 2023
• April 5, 2023
• July 5, 2023
• October 5, 2023

How to apply for GST/ HST credit?

There is no need for a formal application process to access the GST/HST credit. All that's required is to file your annual taxes, even if you have no income to declare. The Canada Revenue Agency (CRA) will assess your eligibility automatically. If you are a new resident, you can apply for the credit by completing Form RC66 for households with children or Form RC151 if you are an individual without dependents.