Your educator tax credit checklist

It’s true. Not only that, but the Canada Revenue Agency (CRA) allows corrections and omissions for a 10-year period … so if you missed out on the deductions or tax credits available to Ontario teachers this year’s return, you can simply add them to next year’s.

Here is your eligible educator tax credit checklist for Ontario teachers.

Checklist item #1: eligible educator school supply tax credit

As of the 2021 tax-filing year, eligible teachers and early childhood educators can now claim 25% of up to $1,000 in eligible school supply expenses, up to a maximum tax credit of $250 a year (previously the refundable tax credit was 15%). The list of eligible supplies has also been expanded to include electronic devices such as graphing calculators, digital timers, and tools for remote learning.

While you cannot claim this credit for tax years prior to 2016, you can bank it for subsequent years.

 In order to be eligible for this credit you must:

• Be a teacher or early childhood educator employed at an elementary or secondary school or a regulated child care facility
• Have a teacher’s certificate (or certificate or diploma in early childhood education) that is valid in the province or territory where you are employed

For your supplies to be eligible for this credit, they must be:

• Purchased within the taxation year(s) you are claiming (starting from 2016 onwards)
• Used in a school or in a regulated child care facility for teaching or helping students learn
• Not already reimbursable by your school/board and not subject to an allowance or other form of assistance (unless the reimbursement, allowance, or assistance is included in your income and not deductible)

Examples of eligible supplies include:

• books, games, and puzzles
• containers (such as plastic boxes or banker boxes)
• educational support software
• calculators (including graphing calculators)
• external data storage devices
• web cams, microphones and headphones
• wireless pointer devices
• electronic educational toys
• digital timers
• speakers
• video streaming devices
• multimedia projectors
• printers
• laptop, desktop and tablet computers (provided that none of these items are made available to the eligible educator by their employer for use outside of the classroom)

Tip: if you plan on claiming this credit, the CRA might ask you to provide certification that validates your eligible supply expenses. So, it’s a good idea to request certification before completing/submitting your return.

Checklist item #2: Teacher union dues

You’ve paid your dues—now ‘get paid’ for paying them. Membership dues for unions can be deducted on income tax returns. This deduction is officially known by the CRA as ‘Annual Union, Professional, or Like Dues’.

Checklist item #3: Travel Costs related to working at 2 different locations as part of the contract 

Are you an education member doing double duty at more than one school? If you have to travel to 2 different schools as part of your contract, you may be eligible to deduct travel costs.

Checklist item #4: At-home classroom costs

If you have an official tutoring business on the side operating out of your home (‘official’ as in your tutoring services are registered as any other home business would be), you can claim part of expenses such as rent, electricity, heating, and maintenance. You cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.

Tip: if your home tutoring space is 15% of the total square footage of your home, you can deduct 15% of your home tutoring expenses from your taxable income. This deduction is officially known by the CRA as ‘Work-Space-In-The-Home Expenses’.

There are additional deductions and tax credits that may apply to you (which are not related to being an education member).

Health plan premiums:

The monthly premiums deducted from your salary (or that you pay in retirement) for health and dental plans count as medical expenses and can be claimed under the Medical Expense Tax Credit if these expenses exceeded either $2,479, or 3% of your net income or that of your spouse’s (whichever is lowest). The tax credit is 15% of the amount remaining. As of 2019, one can claim service animals as a medical expense. If you’re a retired educator, you may benefit from this tax credit the most since your pension income is lower than what you were making while working.

First-Time Homebuyer’s Tax Credit:

New for the 2022 (and subsequent) tax-filing years – the First Time Homebuyer’s Tax Credit (HBTC) has changed. The Budget proposes to increase the amount used to calculate the HBTC to $10,000, which would provide a tax credit of up to $1,500 to eligible home buyers.

Accelerated Capital Cost Deduction:

If you’re operating a business out of your home, you can now claim more Capital Cost Allowance on items like office equipment, furniture and computers. Any of these items purchased between November 21, 2018 and 2024 will be eligible for 150% of the normal CCA rate in the year of purchase.

For an up-to-date list of all qualifying tax credits, be sure to visit the CRA’s website

Have a tax refund coming your way? Let us help you put it to good use. 

Whether tax credits are confusing you or credit cards are taxing you—the more you increase your financial literacy, the less likely you’ll miss important details where your money is concerned. Plus there are certain educator-specific details that you’ll only learn about here, such as what you need to know in order to take advantage of a deferred salary leave or how to maximize your pension income in retirement.

Have one of our financial specialists contact you about maximizing your tax refund.

Sources:
https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-4-businesses/series-4-businesses-folio-2-deducting-business-expenses/income-tax-folio-s4-f2-c2-business-use-home-expenses.html
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/accelerated-investment-incentive.html