Tax Deductions and Credits Every Canadian Should Know (2024)

RRSP Contributions

The most impactful deduction for most Canadians. RRSP contributions directly reduce your taxable income, and the tax savings depends on your marginal rate.

• 2024 limit: $31,560 or 18% of previous year's earned income
• Deadline: March 3, 2025 (for 2024 tax year)
• Tax savings: At a 40% marginal rate, a $10,000 contribution saves $4,000

Read our complete RRSP guide →

Home Office Expenses

If you work from home, you can claim a portion of your home expenses. There are two methods:

Temporary Flat Rate Method

• Claim $2 per day worked from home (up to $500/year)
• No receipts or T2200 required
• Simple but may not maximize your deduction

Detailed Method

Requires T2200 from employer. You can claim a portion of:

• Rent (if renting) or utilities
• Internet
• Home insurance
• Maintenance and minor repairs

The portion is based on the size of your workspace relative to your home, multiplied by the percentage of time used for work.

Moving Expenses

If you moved at least 40 km closer to a new job, school, or business, you can deduct moving expenses:

• Transportation and storage costs
• Travel expenses (including meals and lodging)
• Temporary living expenses (up to 15 days)
• Cost of selling your old home (real estate commissions, legal fees)
• Cost of buying your new home (legal fees, transfer taxes)

Moving expenses can only be deducted against income from the new location.

Childcare Expenses

Costs for childcare that allowed you or your spouse to work, run a business, or attend school can be deducted.

Eligible expenses include:

• Daycare centers and nursery schools
• Caregivers (babysitters, nannies)
• Day camps and day sports schools
• Boarding schools, overnight camps (limited amounts)

Annual limits per child:

• Under 7: $8,000
• Ages 7-16: $5,000
• Disabled child (with DTC): $11,000

The lower-income spouse must generally claim childcare expenses.

Employment Expenses

If your employer requires you to pay for certain work expenses and provides a signed T2200, you may be able to deduct:

• Vehicle expenses (if required to travel for work)
• Supplies consumed in your work
• Professional dues and union fees
• Tools (for tradespersons and apprentice mechanics)

Basic Personal Amount (BPA)

Everyone gets this credit—it's the amount of income you can earn tax-free at the federal level.

Provincial BPAs vary. The credit is calculated at 15% federally, giving everyone approximately $2,355 in federal tax savings.

Medical Expense Tax Credit

You can claim medical expenses for yourself, your spouse, and dependent children that exceed the lesser of:

• 3% of your net income, or
• $2,759 (2024 threshold)

Eligible expenses include:

• Prescription medications
• Dental work not covered by insurance
• Eyeglasses and contact lenses
• Laser eye surgery
• Medical devices (hearing aids, wheelchairs)
• Private health insurance premiums
• Therapy (physio, chiro, massage if prescribed)
• Travel expenses for medical treatment (if not available locally)

Pro tip: You can choose any 12-month period ending in the tax year. This flexibility helps you group expenses to exceed the threshold.

Charitable Donations Tax Credit

Donations to registered Canadian charities qualify for a generous two-tier credit:

• First $200: 15% federal credit
• Over $200: 29% federal credit (33% if income exceeds $246,752)

Provincial credits are added on top. In total, high-income donors can receive credits worth nearly 50% of donations over $200.

You can carry forward unused donations for up to 5 years.

Climate Action Incentive (CAI)

Residents of Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, PEI, and Newfoundland receive quarterly payments to offset carbon pricing costs.

2024 base amounts (single adult):

• Alberta: $450/year
• Saskatchewan: $376/year
• Manitoba: $300/year
• Ontario: $280/year

Amounts are higher for families. Rural residents get a 20% bonus. You must file a tax return to receive payments.

Disability Tax Credit (DTC)

A significant credit for individuals with a severe and prolonged impairment in physical or mental functions.

• 2024 base credit: Approximately $9,000 in tax savings
• Supplement: Additional amount for those under 18

Requires Form T2201 certified by a medical practitioner. The credit can be transferred to a supporting family member. Also opens eligibility for the RDSP.

Key Takeaways

• Deductions reduce taxable income; credits directly reduce tax owed
• RRSP contributions are the biggest deduction for most people
• Keep receipts for medical expenses, donations, and childcare
• Many credits are "use it or lose it"—file your return even if you owe nothing
• Some credits (donations, tuition) can be carried forward