How to apply for GST/ HST credit in Canada?

To read more chapters, click below:

Chapter 1: Tax breaks for newcomers in Canada

Chapter 2: Are you required to file an income tax return?

Chapter 3: Taxes for new Canadians: Step-by-step guide for filing your taxes

Chapter 4: 20 popular Canadian tax deductions and credits in 2023

Chapter 6: All you should know about Canada Child Benefit (CCB)

The Goods and Services Tax (GST) Credit, referred to as the Harmonized Sales Tax (HST) Credit in certain provinces, is a tax-free payment issued by the Canadian government every quarter. Its purpose is to aid individuals and families with modest and limited incomes in mitigating the effects of the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) incurred on qualified goods and services. The design of the GST/HST Credit is aimed at providing economic assistance to those facing the greatest financial hardships. Its goal is to support individuals and families with lower earnings in better managing the financial burdens associated with consumption taxes. The amount of the credit is determined based on various factors, including the individual or family's net income, marital status, and number of children.

How does GST/ HST credit work?

Families with limited or moderate incomes receive tax-free quarterly payments from the Canada Revenue Agency (CRA) through the GST/HST credit. These payments serve to counterbalance the GST or HST they incur over the year.

If you meet the requirements, these same families might get extra money from their province or territory in addition to their GST/HST payments. Let's talk about the details of the GST/HST credit. The amount of money you get from the GST/HST credit depends on things like how much money your family makes, whether you're married, and if you have kids. In the tax year 2021 (encompassing distributions from July 2022 to June 2023), the highest credit values are as follows –

• $467 for single individuals
• $612 for those who are married or in a common-law partnership
• $161 for each child under 19 years of age

The Canada Revenue Agency (CRA) follows a regular schedule for disbursing GST/HST tax credit payments, which occurs on the 5th day of July, October, January, and April. In specific cases, based on an individual's family circumstances as of October 2022, certain individuals might receive an extra one-time GST credit payment between November 4, 2022, and January 5, 2023. This additional payment is designed to provide temporary assistance to individuals who might be facing financial challenges during that period. The CRA considers various factors to determine eligibility for this supplementary payment, which could offer extra support to individuals and families when they need it the most.

GST/ HST credit eligibility requirements

To qualify for the GST/HST credit, your adjusted net family income must be below a certain limit. For the 2021 tax year, this limit varies from $49,166 to $64,946. The specific limit depends on factors like whether you're married and how many children you have in your household. Additionally, you need to be considered a Canadian resident for income tax purposes not only in the month before but also at the start of the month when the CRA distributes the GST/HST credit payment. Finally, you must meet at least one of the following conditions -

• Should be of the age of 19 years or above
• Have a spouse or common-law partner
• Qualify as a parent living with or having lived with your child.

In case you are a parent who has a joint custody of the child, then you’ll be eligible to receive half of the GST/HST credit specifically meant for that child. This rule also applies to applicable provincial credits. However, if a child welfare agency has legal, physical, or financial responsibility for the child, you are not entitled to receive the GST/HST credit intended for that child.

How to apply for GST/ HST credit?

In most situations, if you want to receive your GST/HST credit, all you need to do is submit your tax return. This applies even if you have no income to declare.

As a new resident of Canada, you need to fill a form for this purpose and follow some easy steps. You can get all the information related to being a new resident in Canada on the official CRA page.

You need to complete one of the following forms –

• If you have children: Complete and sign Form RC66, known as the Canada Child Benefits application, to request various child and family benefits, encompassing the GST/HST credit.
• If you don't have children: Complete and sign Form RC151, designed as the GST/HST Credit Application for individuals who are becoming residents of Canada.
• After completing the form, send it via mail to your designated tax center.

Claiming GST/ HST credit for your child

If you've already applied for the Canada Child Benefit (CCB), you're likely receiving the child-related portion of the GST/HST credit automatically. However, if you haven't applied for the CCB, if there's a new addition to your family, or if a child has recently started living with you, you'll need to go through a manual registration process to ensure you receive the GST/HST credit for that child. This involves providing the necessary information to the authorities to ensure you receive the financial support you're entitled to.

Steps for manual registration

Follow these simple steps –

1. Log into CRA My Account
2. Navigate to the section titled "Apply for child benefits”
3. Validate your contact details, marital status, and citizenship
4. Include your child's name, gender, date of birth, and place of birth

Once this is done, you can view your application status in the CRA My Accounts section.

Other ways to register for GST/ HST credit

• Complete and sign Form RC66, the application for Canada Child Benefits
• Send the duly filled form to your designated tax center

Alternatively, you can easily apply by selecting the relevant checkbox on your yearly tax return. If your eligibility aligns with the credit, the CRA will provide notification accordingly.