Canadian taxpayers will no longer have to check off a box on their tax returns when they’re applying for the Goods and Services Tax/Harmonized Sales Tax credit, the government proposed in Tuesday’s federal budget. This will eliminate what at least one tax practitioner believes was an unnecessary step.
“It always seemed to strange that you had to check off a box when eligibility for the GST/HST credit is determined by age and net family income, information that is easily determined by simply filing the tax return itself,” says Jamie Golombek, managing director, tax and estate planning, CIBC Private Wealth Management.
The GST/HST credit is a non-taxable benefit that is paid to individuals based on their adjusted family net income. When an individual checks the GST/HST credit application box on their income tax return, the Minister of National Revenue is required to send the individual a notice of determination as to their eligibility for the GST/HST Credit.
Budget 2014 proposes to eliminate the need for an individual to apply for the GST/HST Credit and to allow the Canada Revenue Agency to automatically determine if an individual is eligible the credit. A notice of determination will be sent to each individual who is eligible for the GST/HST Credit. In the case of eligible couples, the credit will be paid to the spouse or common-law partner whose tax return is assessed first.
The government will not send notices of determination to ineligible individuals. An ineligible individual, however, will be able to obtain a notice of determination upon request, should they wish to contest the government’s determination of eligibility.
This measure will apply in respect of income tax returns for the 2014 and subsequent taxation years, the government proposes.