Guide to Common Tax Deductions and Credits for Canadians

Enjoying a hot chocolate and ice skating are classic winter activities for Canadians. These activities also signal that tax season is approaching. Getting a head start on preparing your taxes ensures that you can maximize claiming tax deductions and credits, enjoy a smoother tax filing experience, and reduce last-minute stress.

Begin by saving the date in your calendar. For the 2025 tax year, the deadline to submit your personal tax return to the Canada Revenue Agency (CRA) are April 30, 2026. If you’re self-employed, you have until June 15, 2026 to file your tax return.

This guide will show how you can prepare for the tax season to help maximize your tax refund or reduce the amount you owe. To give you a head start, we’ve compiled the top 10 tax deductions and the 10 most popular tax credits that caregivers, business owners, students, and homeowners may claim. We’ll explain what they are, who’s eligible, and the amount you could expect to receive in 2026.

How to prepare for tax season

Giving yourself ample time to organize your taxes will help avoid errors and ensure a seamless experience. You can file your taxes yourself or have a tax expert assist you, especially if your situation is more complex.

Start early

As the saying goes, “the early bird gets the worm.” Getting a head start on your taxes allows you to organize your financial records and find any missing information that you may need. Some people prefer a physical folder with printed documents, while others opt for a digital record. The earlier you file your tax return, the sooner you should receive a tax refund – if you’re expecting one. Plus, it reduces the stress that often comes with last-minute filing.

Gather necessary documents

Before you fill out your tax return, you’ll need to collect the supporting documents. These probably include income statements and registered contribution slips. As an example, you may have a T4 slip for employee earnings and a T5 slip for investment income from a Tax-Free Savings Account (TFSA).

You may also have business receipts, medical expenses, childcare costs, or donation receipts that you’d like to deduct from your income. Although you don’t necessarily need to submit every receipt along with your tax return, you’ll want to keep them on file in case the CRA asks to view them. Best practices: CRA recommends keeping supporting records and documents for a period of six years.

Understand tax deadlines

Knowing when to file your taxes can help you plan and complete your tasks on time. Here are the key filing deadlines for the 2025 tax year:

• Personal tax return: April 30, 2026.

• Business tax return: June 15, 2026.

• Paying your taxes: April 30, 2026.

Being mindful of these key dates can help ensure you don’t miss the deadlines and avoid paying interest and penalties for filing late.

Top 10 tax deductions for Canadians in 2025

A tax deduction helps reduce your taxable income, which in turn, can lower the amount of tax you owe, depending on your tax bracket. Generally, these deductions relate to childcare costs, employment expenses, or registered investment contributions.

The following are 10 of the most common tax deductions you may be eligible for when filing your 2025 tax return.  

1. Childcare expenses

Parents and caregivers may claim childcare expenses when they pay someone to care for their child so they can work, attend school, or conduct research for a grant. In Canada, eligible childcare expenses include daycare, nursery schools, babysitters, nannies, day camps, and boarding schools. If you live with your partner or spouse, usually the person with the lower income makes the child care claim on their tax return.

2. Registered Retirement Savings Plan (RRSP) deduction

If you’ve earned income in 2025, you may allocate a portion of your money to your Registered Retirement Savings Plan (RRSP). You can contribute up to 18 per cent of your income, with a cap of $32,490 for 2025. One benefit of contributing to your RRSP is that it lowers your taxable income.

Remember, the last day to make a contribution towards your RRSP for the 2025 tax year is March 2, 2026 – so there may still be time to reduce your taxable income.

One way to help reach your retirement goals and reduce taxes is through, a Guaranteed Investment Funds (GIF). These segregated funds that can be held within an RRSP, alongside traditional funds, and are designed to preserve your wealth by offering a maturity guarantee and a death benefit.

3. First Home Savings Account (FHSA)

Countless Canadians aspire to have the keys to their dream home someday. To help make this a reality, the federal government designed the First Home Savings Account (FHSA), so potential homeowners can save towards their future home.

To qualify, you need be a first-time homebuyer and can contribute up to $8,000 per year, with a lifetime contribution limit of $40,000. The bonus? These contributions are deductible from your income tax.

4. Medical expenses

Taking care of your health is a top priority for many Canadians. Whether it’s a visit to the dentist, prescription medication, or therapy, these expenses may be claimed on the tax return. You can claim these medical expenses for yourself, your spouse or common-law partner, children under 18, and dependents.

You can only claim the amount that you paid out of pocket and haven’t been reimbursed through group benefits. The amount you can claim is based on 3 per cent of your net income.

Typically, if you have a spouse or common-law partner, it may be ideal for the person who has the lower income to claim the medical expenses. Be sure to keep your receipts and supporting documents to claim accurate medical expenses.

5. Small business expenses

Running your own business typically requires various upfront and ongoing costs to make a profit. Entrepreneurs and small business owners may be eligible to deduct their work-related expenses.

The most common types of business expenses to claim include rent, utilities, marketing and advertising costs, meals and entertainment, office supplies, banking fees, mobile phone plan, internet, fuel and vehicle expenses, travel, employee wages and salaries. The best practice is to keep your business receipts organized so that you can make accurate claims.

Read more: Life insurance for small business owners

6. Employment expenses

If you’re an employee who was required to pay for  expenses  in order to do your job, you may be able to claim them on your taxes. It’s important to note that Canadians can only claim out-of-pocket expenses that your employer didn’t reimburse you for. Typical employee expenses include motor vehicle expenses, advertising fees, paying for parking, hotels, or food and entertainment expenses while travelling for work, or home internet fees if you work from home.

Be sure to ask your employer to complete the Form T2200, Declaration of Conditions of Employment. You’ll also need to fill out the Form T777, Statement of Employment Expenses.

7. Carrying charges and interest expenses

Investors who pay interest to borrow money to earn investment income, such as dividends, can deduct interest expense on their tax return. Alternatively, if you pay fees to have your unregistered investments managed or to receive investment advice, you could claim these carrying charges.

Another situation where you can claim an expense is when you paid an accountant to help file your tax return for income from a property or business. However, you cannot claim brokerage fees or commissions to trade securities.

8. Moving expenses

If you’ve relocated for work purposes as an employee, self-employed individual or for full-time studies at a post-secondary institution within Canada, you may be eligible to claim your moving expenses. Your new home must be at least 40 kilometres closer to your new work location or school.

Related costs that you may claim include transportation, storage, temporary lodging, lease cancellation fees, buying and selling your home, or maintaining your home while vacant (up to $5,000). Be sure to fill out the Form T1-M, Moving Expenses Deduction, to claim these amounts.

9. Union or professional dues

If you pay annual dues for a trade union or professional association membership, you may claim these expenses on your tax return in Canada. Annual membership dues must be related to regular operating costs. You can retrieve the amount from your T4 slip or your receipts. Also, if you paid GST/HST on your dues, you may be eligible for a rebate.

10. Student loan interest

After you graduate, it’s not uncommon to still be paying off student loans with once you begin working. The interest that you pay on your student loans can be used as a tax deduction. Although the federal government permanently eliminated student loan interest as of April 1, 2023, each province has its own rules regarding student loan interest.

You can claim interest paid in 2025 and any of the preceding five years if you haven’t claimed them already on your tax return. Claiming this tax deduction can help alleviate the financial burden of paying down your student debt.

Top 10 tax credits for Canadians in 2025

One way to optimize your taxes is by utilizing the tax credits available to you. There are two types of tax credits: refundable and non-refundable. Refundable tax credits help to reduce your tax bill and give you a refund (if the CRA owes you money). However, non-refundable tax credits reduce the amount of income tax you pay, but don’t result in any refunds to you.

Here are the standard tax credits that you should know about and may be eligible for when filing your 2025 taxes.

1. Canada Child Benefit (CCB)

Families raising children under 18 may qualify to receive the Canada Child Benefit (CCB), which is a tax-free monthly payment. The amount you receive is contingent on your household income, marital status, and the number of children you’re caring for.

For instance, a family with a household income below $37,487 could be eligible to receive a CCB benefit up to $666.41 per month for a child under the age of 6 or $562.33 per month for a child between the ages of 6 and 17. Benefit payments are calculated in July from the previous tax year. Therefore, payments from July 2026 to June 2027 will be based on the 2025 tax year.

2. Canada Caregiver Credit (CCC)

Taking care of a spouse, common-law partner, or a dependent who has a physical or mental impairment may qualify you to claim the Canada Caregiver Credit (CCC). The non-refundable tax credit is designed to support caregivers who need to provide basic necessities for their dependents. On your tax return, you can claim the following amounts:

• Your spouse or common-law partner: $2,616.

• A dependent 18 years or older: $2,616 and up to $8,375.

• A child under the age of 18: $2,616.

The CRA may request a signed statement from a medical practitioner explaining when the impairment began and how long it may last.

3. Canada Training Credit (CTC)

Canadian residents aged 26 to 65 who paid tuition and fees at an eligible educational institution may qualify to claim the Canada Training Credit (CTC). On your notice of assessment (NOA), you’ll find the Canada Training Credit Limit (CTCL), which is the amount you can claim on your tax return or up to 50 per cent of your tuition and fees, whichever is less.

If you owe less in taxes than the credit amount, you may receive a tax refund for the difference. Every year when you file your tax return, you may qualify for an increase of $250, with a lifetime maximum of $5,000.

4. Child Disability Benefit (CDB)

The Child Disability Benefit (CDB) helps families who take care of a child under 18 who has a physical or mental impairment. To receive the tax-free monthly payment, you must be eligible for the Canada Child Benefit (CCB), and your child must be eligible to receive the Disability Tax Credit (DTC).

The amount you can expect depends on the number of children who qualify and your household income. For payments from July 2025 to June 2026, the amount will be determined based on the 2024 tax return. You could receive up to $284.25 per month ($3,411 per year) for each child. Payments for the 2025 tax year will be adjusted accordingly for the period from July 2026 to June 2027.

5. Disability Tax Credit (DTC)

If you have a disability or you care for a family member who has a severe or prolonged impairment, then you may be eligible to receive the Disability Tax Credit (DTC). This non-refundable tax credit helps to reduce your income tax to alleviate the costs related to the impairment. To qualify, you’ll need a medical practitioner to help complete the form T2201, Disability Tax Credit Certificate, so that you can submit it to the CRA.

For the 2025 tax year, an individual 18 years or older may claim up to $10,138 on their tax return. Children ages 18 and under have an additional $5,914 in tax credits to claim, for a total of $16,052.

6. GST/HST tax credit

The Goods and Services Tax/Harmonized Sales Tax (GST/HST) tax credit helps modest-income individuals and families offset the cost of goods and services tax they pay. You’ll be considered for this tax credit when you file your annual tax return.

Payments are distributed quarterly. The January 2026 and April 2026 payments are based on the 2024 tax return, whereas the July 2026 and October 2026 payments are based on the 2025 tax return. For instance, for January 2026 and April 2026 payments, you could receive up to:

• $533 if you’re an individual.

• $698 if you’re married or in a common-law relationship.

• $184 per child who is under 19.

7. Tuition Tax Credit (TTC)

Investing in your education is an important step to pursue your career goals. Yet, tuition fees at post-secondary schools have been rising steadily in recent years. To provide financial relief, eligible students can apply for the Tuition Tax Credit (TTC). To qualify, individuals must be 16 years or older and have studied at a post-secondary educational institution to learn or improve their skills in an occupation.

Your educational institution will issue you a tax receipt that has the amount of tuition you paid. You can claim tuition fees if you paid $100 or more in 2025. Eligible expenses include admission fees, application fees, examination fees, and membership or seminar fees. However, if your employer reimbursed you or a job training program covered your fees, then you cannot claim the tuition amount on your tax return.

8. Rebate for first-time home buyers

Without a doubt, buying a home is one of the biggest financial purchases for Canadians. Fortunately, first-time home buyers may receive financial support through the First Time Home Buyers’ Tax Credit (HBTC) on your principal residence. This non-refundable tax credit is calculated by multiplying $10,000 by the lowest federal personal income tax rate (14.5% in 2025). That equates to $1,450 in tax relief for qualifying first-time home buyers.

Recently, the 2025 federal budget proposed a First-Time Home Buyers’ (FTHB) GST/HST rebate. This proposed legislation would grant first-time home buyers a rebate of up to $50,000 for a home worth $1 million, while homes priced between $1 million and $1.5 million receive a reduced rebate. If Bill C-4 gets the green light, first-time home buyers would be able to stack both rebates.

Once you become a homeowner, an important consideration is how you’ll protect your property and belongings. Having the proper home insurance coverage will help secure your investment and safeguard your most valuable assets.

9. Charitable donation tax credit

Canadians are known for their generosity by donating to charitable causes. When you donate money to a registered charity, you should receive a donation receipt. You can claim this amount on your tax return to receive a non-refundable tax credit. Here’s how much you can receive in tax credits:

• Federal: 15% on the first $200 donation, then 29% for donations of $200 or more.

• Provincial: Ranges from 4% to 25% on the first $200 and those above $200.

If you’re looking to leave a legacy by donating money to a noble cause, a life insurance policy may support your final wishes.

10. Home Accessibility Tax Credit (HATC)

Renovating your home to make it more accessible, functional or safer for a senior (65 and older) or an individual who is eligible for the Disability Tax Credit (DTC) may qualify you for the Home Accessibility Tax Credit (HATC). You may expense materials and labour performed by professional contractors, such as an electrician or plumber. However, you cannot claim the labour performed by yourself or a family member, unless they’re registered to collect GST/HST and meet the criteria outlined by the CRA. 

The maximum amount you can claim in a given year is $20,000 for the non-refundable tax credit. Be sure to keep a record of your signed contracts, invoices, and receipts.

Optimize your taxes today while protecting your future

Preparing for tax season can go a long way in optimizing your tax return and ensuring you file on time. Now that you understand which tax deductions and tax credits you can take advantage of, it’s essential to maintain accurate records so that you can make the most of your tax return.

Besides tax planning, it’s a good idea to consider how to protect your financial nest egg, grow your investments, and pass on your wealth once you’re gone. Depending on your situation, insurance could support your financial goals, provide tax-efficient strategies, and assist with estate planning.

By taking a broad approach that includes tax strategies, insurance, and financial planning, you’ll be able to safeguard your assets and provide a lasting legacy for those who matter most.

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