# Canadian tax credits and government benefits explained

> The difference between tax credits and benefits in Canada, how they're worked out from your return, and the calculators for the ones people claim most

Credits and benefits both put money back in your pocket, but they work differently, and mixing them up is how people end up missing claims they were entitled to for years. A credit lowers your tax. A benefit is a payment sent to you.

## How do tax credits work?

A non-refundable credit cuts the tax you owe, and it can bring that tax to zero but it can't take it below. The basic personal amount is the best-known one. Federally each credit counts for 14% of the amount you claim, and your province adds its own. So a $1,000 claim takes $140 off your federal tax. If you only owe $100, you save $100 and the other $40 is gone. The [tax credits calculator](https://tax-services.ca/calculators/income-tax/tax-credits) shows what each claim saves you.

## How do benefits work?

Benefits are payments, and most are income-tested: the more family income you have, the less you get.

They're worked out from your tax return, which is why you should file every year, even if you had little or no income. That's how the CRA knows to pay you, and it won't notice otherwise. The groceries benefit, for one, runs July to June and is recalculated each July from the return you filed the year before.

## Which ones do people claim most?

- The [Canada Child Benefit](https://tax-services.ca/calculators/family-benefits/canada-child-benefit), for families with children under 18.

- The [GST/HST credit](https://tax-services.ca/calculators/family-benefits/gst-hst-credit), a quarterly payment for lower incomes. Since July 2026 it has been renamed the Canada Groceries and Essentials Benefit, with the same eligibility rules.

- The [disability tax credit](https://tax-services.ca/calculators/family-benefits/disability-tax-credit), which lowers tax for people with a qualifying condition.

- EI and parental leave pay: see the [EI calculator](https://tax-services.ca/calculators/family-benefits/ei-calculator) and the [maternity and parental leave calculator](https://tax-services.ca/calculators/family-benefits/maternity-parental-leave).

## What if you missed one in past years?

The disability tax credit is a good example: the CRA says [eligibility can go back a maximum of 10 years](https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit/demystifying-disability-tax-credit.html) from the date it receives your application. A medical practitioner has to certify the form first. So if a relative has a qualifying condition and never applied, it's worth starting the conversation.

## What should you check each year?

Look at your notice of assessment. It shows the income the CRA used, and a wrong figure there can change what you'll be paid next year. Don't skip it once tax time is over. Our [filing guide](https://tax-services.ca/guides/file-your-taxes) explains what to do after you file, and the [tax calendar](https://tax-services.ca/tax-calendar) keeps the dates you don't want to miss.

## More about credits and benefits

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Source: https://tax-services.ca/guides/benefits-and-credits
Last updated: 2026-10-09
Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer