Filing your tax returns on time is only step one of the process. Getting them assessed and accepted by the tax departments is the crucial part. Sometimes, it doesn’t turn out as expected, as shown by one of this week’s reader questions.
Q: I am a senior citizen and my only source of income is federal and provincial pensions. Usually, I get a substantial refund each year. This year, I got my provincial assessment and according to them, I owe $500 — exactly the amount of their cost-of-living payment for filing a 2021 return. So I got nothing. How does this happen?
A: Without knowing the particulars of your case, it’s hard to say. But it may have something to do with charges for the Quebec prescription drug plan, which most Quebecers not covered by private health insurance end up having to pay at tax time. Low-income seniors usually pay little or no provincial income tax, but they often have to cough up hundreds of dollars for the prescription drug plan, with the premium determined by how much your net income exceeds $16,940.
The Guaranteed Income Supplement (GIS), which the federal government pays to low-income seniors, is not taxable, but it does count as income in the Quebec government’s calculation of the drug plan premium, for which it has been roundly criticized (although it did reduce the effect for those 70 and older by raising the senior-assistance tax credit to a maximum of $400 in 2021). Perhaps the drug plan is what negated your $500 check from the government.
You might want to go over your notice of assessment and current and previous-year tax returns to get a clear idea of how they arrived at their number. If you feel it’s incorrect, you can always appeal it.
Q: You alluded in a recent article to a boost in the tax credit for home-support services for seniors 70 and older. My mother, who resides in a seniors’ residence, did not receive this boost on her latest provincial tax return.
A: That’s because it wasn’t applicable yet. The increase, announced in the Quebec government’s economic update last November, takes effect over a five-year period starting with the 2022 tax year. The credit will grow by one per cent annually, taking it from 35 per cent of eligible expenses in 2021 to 40 per cent in 2026.
Eligible expenses include laundry service, lawn maintenance and snow removal, and a portion of monthly rent. The rental portion used to be capped at $600 a month, but it’s also going up, to $1,200 a month.
Q: Can Quebec (income) taxes as well as federal taxes be deducted from my monthly Old Age Security (OAS) payment? On the OAS website, I only seem able to deduct the federal taxes.
A: They can if you make the request, verbally or in writing, to Service Canada, which oversees OAS. You can mail the request, drop it off at a Service Canada office or telephone its call centre.
Q: Last year, I discovered I could apply for a Quebec tax credit for caregivers for living with my elderly parents. I have lived with them since they turned 70, in 1995 and 1997 respectively. Can I apply for the credit retroactively? Do I have to amend my returns? How far back can I go?
A: Quebec’s caregiver credit for living with a relative 70 and older has changed a few times over the years, but has been around in one form or another for at least a decade, which happens to be the maximum number of years that you can go back to claim unused deductions on your provincial returns.
You’ll have to fill out a form (TP-1.RV) requesting an adjustment to your provincial tax return for each of the years in question, and providing explanations and supporting documents for your claim. (Revenu Quebec’s website lets you access old tax forms to complete Schedule H for those years).
If you file your request in 2022, the 10-year period extends from the 2012 to 2021 tax years.
The Montreal Gazette invites reader questions on tax, investment and personal finance matters. If you have a query you’d like addressed, please send it by email to Paul Delean at firstname.lastname@example.org.
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Delean: How Quebec’s $500 cost-of-living payment affects tax returns