New Brunswick offers several refundable tax credits designed to provide financial relief to various groups, including low-income individuals, seniors, and small businesses. These credits help ease the burden of costs such as sales taxes, home energy expenses, and property taxes, and also provide support for investments in local businesses. Whether you are a working individual, a senior, or a small business investor, these credits can offer much-needed financial assistance. This guide provides a breakdown of each credit, covering eligibility criteria, how to apply, payment details, and real-life examples to help you understand how they work.
| Tax Credit | Eligibility | How to Apply | Payment | Example |
| New Brunswick Harmonized Sales Tax (HST) Credit | Low- and modest-income individuals and families residing in New Brunswick | No separate application; the credit is automatically calculated when you file your federal tax return. | Paid quarterly along with the federal GST credit. | A family earning $30,000 annually may receive a quarterly payment based on HST paid. |
| Low-income Seniors’ Benefit | Seniors aged 65 or older with low income residing in New Brunswick | Eligible seniors apply through Service New Brunswick or receive automatic payments if they meet the income criteria. | Paid annually, typically $400–$500. | A senior earning less than $19,000 annually may receive a $400 benefit. |
| New Brunswick Working Income Supplement | Low-income working individuals and families | Applied through the federal tax return process; no separate provincial application required. | Paid annually as part of federal Working Income Tax Benefit. | A single worker earning $18,000 annually receives additional income through the supplement. |
| New Brunswick Small Business Investor Tax Credit (SBITC) | Small businesses investing in eligible shares of New Brunswick-based companies | Investors apply for the credit when filing their tax return after making eligible investments. | Refundable tax credit depending on investments made. | An investor claims a portion of their investment back as a refundable credit. |
| New Brunswick Home Energy Assistance Program | Low-income households with home energy expenses | Application required annually through Service New Brunswick. | Paid annually, typically $100. | A household earning less than $25,000 applies and receives $100 towards energy expenses. |
| New Brunswick Property Tax Relief Program | Homeowners (primarily seniors) with low or modest incomes and property tax responsibilities | Application required through the provincial government; eligibility is verified based on income. | Provides a reduction or rebate on property tax payments. | A senior homeowner earning $20,000 applies and gets a reduction on their property tax. |
How Refundable Tax Credits Are Calculated
Refundable tax credits are calculated based on factors like income, household size, and specific eligibility criteria set for each credit. In most cases, the lower your income, the higher the amount you can receive from these credits. Some credits, such as the New Brunswick HST Credit, are calculated as a percentage of the federal GST/HST paid on goods and services, while others, like the Low-income Seniors’ Benefit, have a fixed annual amount provided to eligible seniors.
For example, let’s look at how the New Brunswick HST Credit might be calculated:
- Eligibility: A family with an annual income of $30,000
- Credit: Based on income and family size, they may receive a quarterly payment along with their federal GST credit.
- Payment: Quarterly payments ranging from $100 to $500 depending on their income bracket.
For the Low-income Seniors’ Benefit, the process is even simpler, with eligible seniors receiving a flat annual payment, typically between $400 and $500.
The exact amounts may vary from year to year as governments adjust the income thresholds and credit amounts to account for inflation and other factors.
Common Mistakes When Filing for Refundable Tax Credits
When claiming refundable tax credits, taxpayers can make mistakes that may result in missing out on these benefits or facing delays. Here are some of the common errors:
- Not Filing Taxes: Many refundable credits are automatically calculated when you file your tax return. Failing to file, even if your income is low, means you could miss out on important credits like the HST Credit or the Home Energy Assistance Program.
- Incorrect Income Information: Ensure that your reported income is accurate and matches your official records, such as T4s or T5s. Mistakes in reporting income could either reduce your credit amount or disqualify you entirely.
- Missing Deadlines: Some refundable credits, like the Low-income Seniors’ Benefit, have application deadlines. Missing these deadlines means you could lose out on the benefit for that year.
- Not Updating Personal Information: If you move, change your marital status, or experience any other major life changes, you need to update the CRA and provincial authorities. Failing to do so may result in payments being sent to the wrong address or delays in processing your credits.
- Claiming Non-Eligible Dependents: Some credits, like the Working Income Supplement, may consider the number of dependents in your household. Be sure to claim only eligible dependents (children under 18, etc.) to avoid overclaiming and potential penalties.
Frequently Asked Questions (FAQ)
Q1: What happens if I miss the deadline for applying for a refundable tax credit?
- A: In most cases, if you miss the application deadline for a refundable tax credit, you won’t receive the benefit for that year. However, you may still be able to claim the credit retroactively in certain circumstances by contacting Service New Brunswick or the Canada Revenue Agency (CRA).
Q2: How do I know if I am eligible for these tax credits?
- A: Eligibility depends on factors like your income, age, and family situation. For example, the HST Credit is available to low- and modest-income families, while the Low-income Seniors’ Benefit is only for seniors aged 65 or older.
Q3: Can I receive more than one refundable tax credit?
- A: Yes, you can qualify for multiple refundable tax credits. For example, a low-income senior may receive both the HST Credit and the Low-income Seniors’ Benefit.
Q4: Do I need to apply for refundable tax credits every year?
- A: Some credits, like the HST Credit, are automatically calculated when you file your tax return, so there’s no need to apply separately. Others, like the Home Energy Assistance Program, may require a new application each year.
Q5: How long does it take to receive payment after applying for a refundable tax credit?
- A: Once your tax return or application is processed, it can take several weeks to receive payment, depending on the credit. For example, HST Credit payments are made quarterly, while the Low-income Seniors’ Benefit is paid annually.
Q6: Can I still claim refundable tax credits if I don’t owe any taxes?
- A: Yes, refundable tax credits are paid out even if you owe no taxes. If your calculated credit exceeds your tax liability, you’ll receive the balance as a payment or refund.
