What is the GST/HST Credit? Guide for Canadians

The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) Credit is a tax-free quarterly payment provided by the Canadian government to individuals and families with low or modest incomes. Its primary purpose is to offset the impact of GST or HST on the purchase of goods and services. The GST is a federal tax applied to most goods and services, while the HST is a combined federal and provincial tax used in certain provinces. The credit ensures that essential goods and services remain affordable for Canadians with limited financial resources.

How Does the GST/HST Credit Work?

The GST/HST credit is automatically calculated based on your income tax return and is issued four times a year. Eligible recipients can use these payments to cover daily living expenses, making a real difference for low-income households.

Real-Life Example

Consider Sarah, a single mother in Alberta earning $25,000 a year. Raising two children on a tight budget, she often finds it difficult to cover basic necessities like groceries and utilities. Sarah’s GST/HST credit helps her offset the tax portion of her expenses, giving her additional funds to buy healthy food for her family or pay for her children’s school supplies.

Who is Eligible for the GST/HST Credit?

To qualify for the GST/HST credit, you must meet these criteria:

Residency:
- You must be a Canadian resident for tax purposes.
Age and Family Status:
- You must be at least 19 years old.
- You have (or had) a spouse or common-law partner.
- You are (or have been) a parent and live with your child.

Eligibility is determined automatically when you file your income tax return. Even if you have no income to report, filing a return is necessary to be considered for the credit.

How Much Can You Receive?

The amount you can receive depends on your adjusted family net income and the number of children under 19 years of age. The following are the maximum annual amounts for the 2023 base year (covering payments from July 2024 to June 2025):

Single individual: Up to $519
Married or common-law partners: Up to $680
Each child under 19: $179 per child

Income Threshold Example

Michael, a single person with no dependents, earns $20,000 annually. Because his income is below the credit reduction threshold, he receives the maximum $519 in GST/HST credits. Conversely, Anna, who earns $40,000 annually, will see her credit reduced because her income exceeds the threshold.

How to Apply for the GST/HST Credit

The process is straightforward for most Canadians, as eligibility is automatically determined when you file your annual income tax return. However, special cases may require additional steps:

New Residents of Canada:
- File Form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada.
New Parents:
- Complete Form RC66, Canada Child Benefits Application, which includes GST/HST credit assessment.

When Are Payments Made?

GST/HST credit payments are issued quarterly, on the following dates:

July 5
October 5
January 5
April 5

Real-Life Example of Payment Use

Emily, a senior living on a fixed income in Ontario, uses her quarterly GST/HST payments to supplement her grocery shopping. For her, the credit eases the financial strain of buying essentials like bread, milk, and fresh produce.

Special Scenarios

Shared Custody:
- If you share custody of a child, each parent can receive 50% of the credit amount for that child.
- For example, Tom and Maria share custody of their eight-year-old son. Each parent receives $89.50 per quarter for the child.
Marital Status Changes:
- If your marital status changes, such as separating or divorcing, you must notify the CRA promptly. This will ensure that your payments are adjusted based on your new family situation.

How the Credit Reduces Financial Stress

The GST/HST credit is especially valuable for Canadians facing rising living costs. For example:

John, a student in British Columbia, uses his GST/HST credit to help pay for school supplies and transportation.
A senior couple in Nova Scotia, living on a pension, relies on the credit to pay for heating during the winter months when utility bills are higher.

Provincial and Territorial Additions

In some provinces and territories, additional credits are combined with the GST/HST credit. For example:

In Ontario, the Ontario Trillium Benefit is included in the payments.
In Alberta, there are no provincial sales taxes, but residents still benefit from the GST credit.

FAQs About the GST/HST Credit

No, the GST/HST credit is protected and cannot be garnished to pay debts such as taxes, student loans, or other government-related liabilities. It is designed to assist with living costs and is exempt from such collections.

If your income or family circumstances change, the CRA will automatically adjust your payments based on your tax return. You don’t need to take action, but if you believe there’s been a mistake, contact the CRA for clarification.

No, the GST/HST credit is only available to individuals who are Canadian residents for tax purposes. Temporary residents or those not classified as tax residents are not eligible.

The GST/HST credit is a separate benefit and does not reduce or interfere with other government benefits such as the Canada Child Benefit, Employment Insurance, or Old Age Security.

Yes, even if you have no income, you can qualify for the GST/HST credit as long as you file your tax return. The credit is based on your reported income and family circumstances.

No, receiving the GST/HST credit does not affect your credit score, nor is it considered taxable income. However, it might not be counted as income when applying for loans or mortgages.

Deductions that lower your net income, such as RRSP contributions or certain moving expenses, could indirectly increase your GST/HST credit because it’s calculated based on your adjusted family net income.

Conclusion

The GST/HST credit is a vital financial support tool for many Canadians, ensuring that the burden of consumption taxes does not disproportionately impact those with lower incomes. Whether you’re a single parent, a senior, or a young adult starting out, this credit can provide much-needed relief and help cover essential expenses.

If you have questions about your eligibility or need assistance filing your tax return to access the GST/HST credit, consulting a tax professional can ensure you receive the benefits you’re entitled to.