Don’t Miss Out 3 Key CRA Benefits You Need to Claim

Canadian taxpayers shouldn’t miss claiming three key CRA benefits to ensure lower tax bills for this tax season.

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Canadians who have yet to file their tax returns for this tax season have until April 30, 2025, to do so. If you’re reviewing or still completing your tax return, do not miss claiming three key Canada Revenue Agency (CRA) benefits. You might be leaving money on the table due to an oversight.

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1. Basic Personal Amount 

The Canadian government has increased the Basic Personal Amount (BPA) for the 2024 tax year to $15,705 from $15,000 in 2023. This non-refundable tax credit is a tax break or relief. It provides a full reduction from federal income tax and a partial reduction if your taxable income is above BPA. For the 2025 tax year, the absolute BPA amount will rise to $16,129.

2. Medical expenses tax credit

Health is wealth, says the CRA. Canadian taxpayers can claim healthcare costs through the Medical Expenses Tax Credit. Working individuals in low-income brackets and with high medical expenses can claim this refundable tax credit.

The tax agency has a list of eligible medical expenses that you and your spouse or common-law partner paid for in any 12-month period ending in 2024. Examples are prescriptions, vision care, and other medical treatments. The tax credit is 3% of net income or $2,834, whichever is lower.

3. Canada Child Benefit

The Canada Child Benefit (CCB) is a must-claim for parents or families. For Canadians with children under six and six to 17, the tax-free monthly payments are $641.98 and $547.50, respectively. The income-tested benefit (calculated based on the adjusted family net income) lessens the steep cost of raising children.  

Create investment income

Canadians can reduce their tax bills or enhance tax savings by utilizing investment accounts like the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). TFSA earnings and withdrawals are tax-free, while RRSP contributions are tax-deductible.

Headwater Exploration (TSX: HWX) is an ideal holding in a TFSA. At $5.47 per share, the energy stock pays a juicy 8.04% dividend. Your 2024 annual contribution limit, or $7,000, transforms into $140.70 tax-free quarterly passive income. The $1.3 billion oil and gas exploration and development company generate substantial revenues from selling crude oil, natural gas, and natural gas liquids.

In the year ended December 31, 2024, net income increased 20% year over year to $188 million. By maintaining a positive working capital balance through the years, Headwater can expand its resource base and pursue accretive acquisitions for organic growth.

Pizza Pizza Royalty (TSX: PZA) is lucrative for tax-free money growth in an RRSP. At $13.70 per share, the dividend offer is a hefty 6.79%. Whatever amount you invest (up to $32,490 or 18% of earned income in 2025, whichever is lower) is tax-deductible. The $456.9 million royalty corporation franchises and operates quick-service restaurants (Pizza Pizza and Pizza 73 brands).

Because the payout frequency is monthly, you can reinvest dividends 12 times a year for faster compounding of your RRSP balance. PZA displays resiliency in 2025 amid the elevated market volatility. The resto stock is up +7.15% year to date versus the TSX’s -2.87%.

What to do next

There are more key CRA benefits that you can claim before the official tax-filing deadline. Visit the CRA website to learn them, assess your eligibility, and lower your tax bill.  

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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