You may not be required by law to file a tax return if you did not earn income during the year or owe tax, however, there are plenty of reasons to file a tax return anyways.
Denial of Refund
If you are due a refund, you may lose the ability to recover this refund if your return is not filed within three years of the end of the taxation year.
Government Subsidies
You may also lose eligibility for certain credits and benefits as both the federal and provincial governments use information from your tax return to determine eligibility for tax the following:
- Canada Child Benefit (CCB) – Payment available to low-income and middle-income individuals and families. Entitlement amount based on household income, number of children, and age of children;
- GST/HST credit (payment available to low income individuals and families – maximum annual credit of $580 plus $153 for eligible children under the age of 19, maximum annual credit of $443 if you are single);
- Alberta Child Benefit (ACB) - Payment available to low-income families. Entitlement amount based on household income and number of children;
- Alberta Family Employment Tax Credit – Payment available to low-income families with a family working income of more than $2,760 (in 2018).
For more information on benefits that may be available you can visit Services Canada Website
Climate Action Incentive
The federal Climate Action Incentive takes effect in Alberta starting in 2020. In conjunction with the commencement of this federal carbon tax in Alberta, the following refundable tax credits are available to be claimed by Alberta residents on their 2019 personal tax returns:
Single adult/first adult in a couple $444
Second adult in a couple, or first child of a single parent $222
Each child under 18 not already included above $111
Baseline example of family of four $888
Taxpayers must file a 2019 personal tax return in order to claim these credits. The credits are fully refundable which means that even if you have no other credits or tax withheld for the year, you may still have a refund due for 2019.
Tuition Carry-Forward
If you were a student with eligible tuition paid during the year, filing a tax return also ensures that you generate unused federal tax credits for tuition paid during the year that can be carried forward and claimed against income earned in future tax years or transferred to a parent to claim in the current year (note provincial tuition credits no longer available in Alberta).
Canada Training Credit
Workers who meet the following conditions as of December 31, 2019 can accumulate a Canada training credit of $250 for use in future taxation years:
- Aged 25 to 64 as of December 31, 2019;
- Resident in Canada throughout the year;
- Have a total of $10,000 of working income (employment or self-employment) or from maternity and parental benefits; and,
- Have net income for the year that does not exceed the third personal tax bracket ($147,667 in 2019).
A $250 credit accumulates each year starting in 2019 (up to a maximum of $5,000). It is a refundable tax credit that is calculated based on the lesser of the individuals training credit limit, and one half of eligible tuition and fees paid for work related courses during the year. The $250 credit for 2020 only accumulates if a taxpayer has filed a 2019 tax return.
For more details on the Canada Training Credit, visit the Canada Revenue Agency webpage.
Future Financing Requests
Ensuring that your personal tax filings are up to date can also help in getting approved for financing as most lenders will request Notices of Assessment from your most recent tax returns as part of their review.
For more information about this topic, or assistance with filing your 2019 personal tax return, contact Gregory Harriman & Associates LLP by email at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 1-403-934-3176.
Disclaimer
The information in this publication is current as of March 6, 2020.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Gregory, Harriman & Associates LLP to discuss these matters in the context of your particular circumstances. Gregory, Harriman & Associates LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.