700 plain-language Q&As about tax. Browse below, or search the whole library.
Generally, no — an employee discount on your employer's own products or services is generally not treated as a taxable benefit, provided it's offered…
Read the full answer →Yes. A cash referral bonus paid for successfully referring a new employee is taxable income to whoever receives it, the same way as wages, and it's…
Read the full answer →Generally, no tax is triggered when your employer grants you stock options, the taxable event comes later, when you actually exercise them, at which…
Read the full answer →As an Ontario employer you match every dollar of Canada Pension Plan (CPP) contributions your employees make — so if an employee's CPP deduction is…
Read the full answer →Yes. When an employer treats something as a taxable benefit — a company loan, personal use of a vehicle, an excessive gift, or any other perk that…
Read the full answer →Generally, no — employer contributions to a group RRSP are not treated as an immediate taxable benefit the way a cash bonus would be. This is a…
Read the full answer →Generally, no — this is a notable, favourable exception to the general rule that employment-related benefits are taxable, and it's worth knowing…
Read the full answer →Generally, yes, under the current framework — an employer-paid transit pass is generally treated as a taxable benefit added to the employee's income,…
Read the full answer →It depends, and this is genuinely one of the more fact-dependent areas in this space rather than a flat yes-or-no rule. Employer-paid tuition or…
Read the full answer →Generally, yes. A retiring allowance is generally reported on a T4A, not a T4 — the T4 slip is used for regular employment income like salary and…
Read the full answer →Generally, yes. Even though a retiring allowance is legally distinct from regular salary, your employer generally still has to withhold tax at source…
Read the full answer →Form T2200 (Declaration of Conditions of Employment) is signed by your employer and certifies that you were required as a condition of employment to…
Read the full answer →Employment income is the broadest category of personal income in Canada. Your employer reports your wages, salary, bonuses, commissions, and tips on a…
Read the full answer →Yes — an estate that earns income after the date of death is itself a taxpayer in Canada. The estate is treated as a trust and must file a T3 Trust…
Read the full answer →Yes. An estate trustee who underestimates the estate's value, files an inaccurate Estate Information Return, or otherwise doesn't pay the correct…
Read the full answer →During a CRA audit of business expenses, you will be expected to provide receipts, invoices, or other documentation showing the amount paid, the date,…
Read the full answer →CRA and the courts look at a cluster of factors similar to those used generally to tell investing apart from carrying on a trading business, rather…
Read the full answer →CRA uses a "residential ties" analysis to determine factual residency. There is no single bright-line test — CRA weighs all your connections to Canada…
Read the full answer →Generally, yes. A family trust that holds a cottage is still a trust for tax purposes, and it's expected to file a T3 Trust Income Tax and Information…
Read the full answer →A genuine loan from a family trust to a beneficiary isn't itself taxable income to the beneficiary, in the way an actual distribution of trust income…
Read the full answer →Yes. Canadian corporations pay both federal income tax and provincial income tax. The CRA administers and collects Ontario's corporate income tax under…
Read the full answer →Yes. The FHSA and the Home Buyers' Plan are not mutually exclusive, and a first-time buyer can combine a qualifying withdrawal from each toward the…
Read the full answer →Yes, in the same general way. Contributing to an FHSA generates a deduction against your taxable income for the year, just like an RRSP contribution…
Read the full answer →It depends on how your FHSA is designated, and the outcome can differ quite a bit depending on that designation. If you've named a successor holder,…
Read the full answer →Generally, yes. Similar to a TFSA, an FHSA can typically have a successor holder named on it, usually a spouse or common-law partner, who takes over…
Read the full answer →Yes. The Income Tax Act sets a maximum participation period for an FHSA, meaning the account cannot stay open indefinitely if you never end up making a…
Read the full answer →Yes. If you change your mind about buying a first home, the Income Tax Act allows you to transfer money out of your FHSA into an RRSP or a RRIF on a…
Read the full answer →Unlike RRSP room, FHSA contribution room does not accumulate automatically just because you're eligible; it generally only begins building once you…
Read the full answer →Not a separate penalty, exactly, but there is a real cost, and it's easy to underestimate. A withdrawal from your FHSA that isn't a qualifying home…
Read the full answer →When someone dies, their legal representative (executor, estate trustee, or administrator) is responsible for filing a final (terminal) T1 return…
Read the full answer →Yes, it can. Financial hardship is a valid ground CRA considers for interest relief under the Income Tax Act's taxpayer relief provisions, in…
Read the full answer →A First Home Savings Account, or FHSA, is a federal registered plan created specifically for first-time home buyers, and it works by combining the best…
Read the full answer →Yes. The First-Time Home Buyers' Tax Credit (HBTC) is a federal non-refundable credit for qualifying first-time buyers who purchase a qualifying home…
Read the full answer →Withdrawing the excess amount as soon as you discover an over-contribution is genuinely the most effective way to limit the damage, but it's important…
Read the full answer →If you buy a property and sell it quickly at a profit — commonly called "house flipping" — there is a strong likelihood that the CRA will characterize…
Read the full answer →Very likely, yes. Owning a residential property for only six months before selling it falls well within the short holding period the flipping rule…
Read the full answer →Yes. The flipping rule extends to profits from assigning a purchase agreement for a home - an assignment sale - including presale assignments of new…
Read the full answer →Yes. The flipping rule has a specific, limited list of life-event exceptions that take a sale outside the rule even if the property was owned for a…
Read the full answer →The flipping rule's holding period is measured based on when you actually acquired and disposed of the property, which generally aligns with when…
Read the full answer →Yes — Ontario residents, like all Canadian tax residents, are taxed on their worldwide income. This means foreign employment income, foreign investment…
Read the full answer →As a Canadian resident, you are generally taxed on your worldwide income, which includes foreign pension payments. The full amount is reported on your…
Read the full answer →Generally, yes, a Canadian resident can claim a foreign tax credit against Canadian tax for US tax properly withheld on income covered by the treaty,…
Read the full answer →Often not, in limited and genuinely occasional circumstances — CRA has a recognized administrative accommodation that treats free meals provided during…
Read the full answer →Yes, the cost of fuel is a deductible vehicle operating expense for self-employed individuals, limited to the business-use portion. If you use your…
Read the full answer →Yes, in most cases. Under the federal Income Tax Act, a gift of capital property — including real estate, shares, or a cottage — is treated as a…
Read the full answer →Yes — income earned through gig economy platforms (such as rideshare driving, delivery services, freelance marketplaces, or short-term rentals) is…
Read the full answer →Rideshare drivers in Ontario are generally treated as self-employed individuals for income tax purposes. You must report all earnings from the platform…
Read the full answer →A Graduated Rate Estate, or GRE, is the tax status a deceased person's estate can hold for a limited window right after death, letting the estate pay…
Read the full answer →In Ontario, HST (Harmonized Sales Tax) is the provincial sales tax system, combining the federal GST and Ontario's provincial portion. If you are…
Read the full answer →The GST/HST credit is a federal refundable tax credit paid quarterly to lower-income Canadians to offset the goods and services/harmonized sales tax…
Read the full answer →They can be, and the difference often comes down to how the specific plan is structured rather than what it's called. A gym membership your employer…
Read the full answer →A Henson trust isn't a separate category under the Income Tax Act — for federal tax purposes it's taxed like any other trust, following the same rules…
Read the full answer →Generally, yes — a holiday gift or gift card from your employer is treated as a taxable benefit under the general rule that almost any benefit provided…
Read the full answer →Yes. The Home Accessibility Tax Credit (HATC) is a federal non-refundable credit for eligible renovation expenses on a qualifying home. It applies to…
Read the full answer →Leaving Canada with an outstanding Home Buyers' Plan balance doesn't make the remaining repayment obligation disappear, and it's a trap that catches a…
Read the full answer →The Home Buyers' Plan requires you to repay what you withdrew from your RRSP over a multi-year repayment schedule set out in the Income Tax Act, with a…
Read the full answer →Generally, no - a home inspection done before you buy a rental property is treated as a cost of acquiring the property, not a current operating…
Read the full answer →Yes. Home office expenses and general business expenses are separate categories on Form T2125, and you can claim both. General business expenses cover…
Read the full answer →Self-employed individuals can deduct home office expenses if the workspace is used exclusively or principally for business. There are two tests: the…
Read the full answer →Employees who work from home may be able to deduct home-office expenses on their T1 return, but the rules are more restrictive than for self-employed…
Read the full answer →Ontario employees who work from home can potentially deduct home office expenses from employment income, but the rules are strict. You must be required…
Read the full answer →Yes, the rules are meaningfully different. Employees claiming home office expenses use Form T777 and must have their employer complete Form T2200…
Read the full answer →If you use your home internet primarily for business, you have two options. First, you can claim the business-use portion of your monthly internet bill…
Read the full answer →Maintenance and repairs that relate to the home as a whole — like furnace servicing, roof repairs, or general exterior maintenance — are deductible at…
Read the full answer →For most self-employed individuals who claim home office deductions, claiming a portion of the home as a business workspace does not eliminate the…
Read the full answer →Yes, a prorated share of home utility costs — including electricity, heating, and water — is deductible as part of your home office expense for…
Read the full answer →CRA finds out through the same information-reporting system that financial institutions already use to report TFSA contributions and withdrawals for…
Read the full answer →The Income Tax Act is a federal statute that sets a "normal reassessment period." For most individuals and Canadian-controlled private corporations,…
Read the full answer →The length of a CRA audit depends heavily on its type and complexity. A simple correspondence audit — where CRA asks you to mail in receipts supporting…
Read the full answer →CRA generally has broad authority under the Income Tax Act to require payment of amounts owed to, or held for, a tax debtor, but there isn't a single…
Read the full answer →Your HST filing frequency depends on your annual taxable revenues. The CRA sets the default filing periods based on revenue tiers, though you can…
Read the full answer →If you disagree with MPAC's assessment of your property, the first step is to file a Request for Reconsideration (RfR) directly with MPAC. The deadline…
Read the full answer →A Notice of Objection is the formal way to dispute a CRA assessment or reassessment under the Income Tax Act. For most individuals (and graduated rate…
Read the full answer →Ontario residents file their personal income tax return (T1) using the CRA's NETFILE service, which allows you to submit your return electronically…
Read the full answer →HST registration in Ontario is handled by the Canada Revenue Agency (CRA), not the province, because HST is a federal-provincial combined tax…
Read the full answer →A GST/HST audit by the CRA is an examination of your HST records to verify that you correctly reported and remitted the tax you owe and that your ITC…
Read the full answer →The CRA requires HST registrants to keep adequate records to support both the HST they collected and the ITCs they claimed. For ITC claims, the minimum…
Read the full answer →Generally, no, many services supplied to a client who is a non-resident of Canada are zero-rated under the Excise Tax Act, meaning GST/HST applies at a…
Read the full answer →Collecting HST and not remitting it to the CRA is treated seriously. The HST you collect from customers is held in trust for the CRA — it is the…
Read the full answer →Yes. Under the federal Excise Tax Act, directors of a corporation can be held personally liable for the corporation's failure to remit net tax (HST).…
Read the full answer →Both exempt and zero-rated supplies are sold without charging HST to the customer, but the business-side treatment is very different. Zero-rated…
Read the full answer →Late-filing an HST return carries an automatic CRA penalty: generally 1% of the amount owing, plus 0.25% of that amount for each full month the return…
Read the full answer →Construction contracts get special timing treatment under the Excise Tax Act for the holdback portion of a progress payment, the amount contractors are…
Read the full answer →If you are registered for HST, you can claim input tax credits (ITCs) to recover the HST you paid on business purchases and expenses. This is one of…
Read the full answer →Yes, most annual HST filers are required to make quarterly installment payments to the CRA during the year, even though they only file a single return…
Read the full answer →The joint venture election isn't available for every kind of joint business arrangement, it's restricted to specific types of activities that are…
Read the full answer →There are two new housing HST rebates available in Ontario — a federal rebate under the Excise Tax Act and a provincial rebate under the New Harmonized…
Read the full answer →When you purchase a newly built home in Ontario, HST (13%) applies to the purchase price. This can add a significant amount to the cost of a new home.…
Read the full answer →Yes. Once you are registered for HST, you are required to show your GST/HST registration number on invoices for taxable supplies. The CRA's rules…
Read the full answer →Yes, but with important restrictions depending on the type of vehicle. For vehicles used exclusively or primarily (more than 50%) for business…
Read the full answer →Yes. Commercial rent — rent for office space, retail premises, industrial buildings, and most other non-residential tenancies — is a taxable supply in…
Read the full answer →Construction services in Ontario are taxable supplies, so contractors charge 13% HST on both labour and materials included in their invoices. The party…
Read the full answer →When you buy digital services — software-as-a-service (SaaS), streaming subscriptions, cloud storage, online courses — from foreign (non-Canadian)…
Read the full answer →For many employee benefits, HST rules mirror the income tax treatment of taxable benefits. If you provide an employee with a taxable benefit under the…
Read the full answer →Yes. When an Ontario employer reimburses an employee for expenses the employee incurred on the employer's behalf — business travel, office supplies,…
Read the full answer →Yes. Importing goods into Canada triggers GST/HST at the border, collected by the Canada Border Services Agency (CBSA) at the time of importation. For…
Read the full answer →Yes. Legal services are taxable supplies in Ontario, meaning that lawyers (and paralegals providing regulated legal services) charge 13% HST on their…
Read the full answer →No. Meals and entertainment expenses are subject to a 50% restriction under both the Income Tax Act (for the expense deduction) and the Excise Tax Act…
Read the full answer →When you purchase property — a vehicle, a home office, equipment — that you use for both business (commercial) and personal purposes, you can only…
Read the full answer →Yes, in most cases. The Canada Revenue Agency has clarified that assignment sales of pre-construction residential properties are generally subject to…
Read the full answer →Links go to the official consolidated text. Legislation changes — confirm you are reading the current version.
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