What is the GST Payment?
The GST Payment is a tax-free quarterly payment from the Canada Revenue Agency meant to help individuals and families in lower and modest incomes with the cost of the Goods and Services Tax (GST). The GST is a 5% tax applied on most goods and services in Canada.
The purpose of the GST Payment is to subsidize the cost of the GST for lower-income Canadians. It helps offset some of the sales tax they pay on everyday purchases. The payments occur on a quarterly basis and eligibility is based on your family net income. The GST Payment provides targeted tax relief to those who need it most.
Who is Eligible for the GST Payment?
To be eligible for the GST Payment in Canada, you must meet the following criteria:
– Be a resident of Canada for income tax purposes. This includes citizens, permanent residents, protected persons, and temporary residents who have lived in Canada for the previous 18 months.
– Be 19 years of age or older (or have a spouse or common-law partner who meets the age requirement).
– Have a family net income below the thresholds set for the benefit year. The thresholds can change annually and are based on family size. For example, for the 2021-2022 benefit year, the threshold for a single individual was $49,020.
– File a tax return each year, even if you have no income to report. The GST Payment is determined based on your tax return.
– Not be incarcerated in a prison or similar institution for a period of 90 days or more in the month the GST Payment is issued.
Some additional eligibility rules:
– Receiving social assistance payments does not affect your eligibility if you meet the other criteria.
– You can still qualify if you share custody of a child. The parent who gets the Canada Child Benefit is normally eligible for the GST Payment.
– Immigrants and temporary residents may qualify if they meet the tax residency requirements.
So in summary, the GST Payment is for low-to-moderate income Canadian residents who file taxes annually. Check with the CRA each year to ensure you continue to meet the eligibility thresholds.
How is the GST Payment Amount Calculated?
The GST payment amount is calculated based on your family net income and marital status. The formula to determine the GST payment takes into account the following factors:
– Base amount – There is a base amount of GST payment that depends on your marital status. For single individuals the base amount is $290. For couples and common-law partners who are living together, the base amount is $580.
– Net family income – Your adjusted net family income for the previous tax year determines the amount of GST payment you receive. The higher your net family income, the less GST payment you receive.
– Benefit reduction rate – There is a benefit reduction rate of 2% for single individuals, and 4% for couples/common-law partners. For every dollar of adjusted family net income above the threshold, the GST payment is reduced by this percentage.
– Income threshold – The threshold amount above which the benefit starts reducing is $39,402 for single individuals and $39,402 for families with disabled children. For couples/common-law partners the threshold is $48,535.
So in summary, the GST formula calculates the base amount, reduces it by the benefit reduction rate for income above the threshold, and results in the final GST payment amount. Families with lower net incomes receive the full base amount, while payments start reducing above the income thresholds based on the formula.
When are GST Payments Issued?
The GST Payment is issued 4 times a year by the Canada Revenue Agency (CRA). Payments are made according to the following schedule:
– Early April – This payment is for January, February, and March
– Early July – This payment is for April, May, and June
– Early October – This payment is for July, August, and September
– Early January – This payment is for October, November, and December
The exact payment dates vary by year but generally follow this quarterly schedule. Payments are issued around the 5th of the month for the previous 3 months.
For example, the July GST payment would be issued around July 5th and would provide the credit for April, May and June. The January payment would be issued around January 5th for the previous October, November, and December.
Some key payment dates to be aware of:
– Early April payment – Issued around April 5th
– Early July payment – Issued around July 5th
– Early October payment – Issued around October 5th
– Early January payment – Issued around January 5th
It’s important to note that you must file your taxes by April 30 each year in order to receive the full yearly GST Payment. Late tax filers may miss one or more payments.
The CRA issues T4A slips showing the total GST Payment amount for the year. This allows taxpayers to verify the payments received. Any issues with missing payments should be reported to the CRA.
How to Apply for the GST Payment
To receive the GST payment, you must file your income tax return even if you have no income to report. This allows the CRA to determine your eligibility and calculate the amount of your GST payment.
You can apply and file your taxes in several ways:
– **Online** – The fastest and easiest way is to file your taxes through the CRA’s online portal. You will need to register for a CRA MyAccount to file online. Make sure to have your social insurance number, date of birth, current postal code, and information from your previous tax return handy.
– **By Phone** – Call 1-800-959-8281 to file your taxes by phone and apply for the GST payment. An automated filing service is available 24/7.
– **In Person** – You can have your taxes prepared in person at a [Tax Centre](https://www.canada.ca/en/revenue-agency/services/tax/individuals/community-volunteer-income-tax-program.html). Volunteers can help low income individuals file their returns for free.
– **By Mail** – Print and fill out the applicable tax package [forms](https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years.html) and mail them to your Tax Centre. Make sure to sign and date the return.
– **File My Return** – This free online tax filing program can assist you in filing your taxes if you have low income.
No matter how you choose to file, make sure to provide complete and accurate information to ensure you receive the full GST payment you are eligible for. Your SIN, marital status, province of residence, and income information will be required.
How to Receive the GST Payment
The GST payment can be received either by check or direct deposit.
Check
If you did not sign up for direct deposit, you will receive a check in the mail. Checks will be sent to the address you have on file with the CRA. Make sure your address is up-to-date to ensure you receive your payment.
Checks are usually sent out a few days before the scheduled GST payment dates. Allow up to 10 business days from the payment date for your check to arrive by standard mail.
Once you receive your check, you can cash or deposit it into your bank account. Checks are valid for 6 months before they expire, so make sure to cash your check in a timely manner.
Direct Deposit
To receive your GST payment by direct deposit, you must enroll with the CRA. Direct deposit allows the CRA to deposit your GST payment directly into your bank account on the scheduled payment dates.
To sign up for direct deposit, you need to provide the CRA your banking information including:
– Bank account number
– Transit number
– Bank branch number
You can provide this information when filing your taxes, on CRA forms, online through My Account, or by calling the CRA.
Once set up, direct deposit GST payments will go into your bank account on each payment date. Direct deposit is a fast and secure way to receive your GST payments.
What to do if You Don’t Receive the GST Payment
The GST payment is issued automatically to eligible recipients. However, mistakes can happen and payments can occasionally be missed. Here’s what to do if you don’t receive a GST payment that you believe you are eligible for:
– Check your bank account again carefully. Sometimes deposits can be overlooked.
– Confirm your personal details and payment information is up to date with the CRA. This includes your current mailing address, marital status, dependents, income level, and direct deposit details.
– Contact the CRA to confirm your eligibility and inquire about the status of your payment. Call 1-800-387-1193 or speak with an agent through MyAccount.
– Visit a [Service Canada Centre](https://www.canada.ca/en/employment-social-development/corporate/portfolio/service-canada/locations.html) for in-person help with your GST payment.
– If you have moved recently, update your address directly with the CRA and also notify Canada Post.
– Look for any correspondence from the CRA about your payment. A letter may have been mailed if direct deposit failed.
– Request trace of the missing payment. The CRA can trace the payment on your behalf.
– If an error occurred, ask the CRA to re-issue the payment. You can sign up for direct deposit through MyAccount to avoid future issues.
– File a service complaint if you feel your situation was not resolved appropriately.
Don’t hesitate to persistently follow up with the CRA if your payment is missing. Call back more than once if needed until the issue is properly investigated and resolved.
Changes in Circumstances and Updating Information
It is important to report any changes in your circumstances to the CRA to avoid issues or delays with your GST payment. Here are some key changes you must report:
* Changes in marital status: If you get married, separated, or divorced, this can affect your eligibility and payment amount. Make sure to report any changes.
* Changes in address: If you move, you must update your address with the CRA so payments go to the right location.
* Changes in income: If your income goes up or down, resulting in you crossing the eligibility thresholds, you must report this.
* Changes in residency status: If you gain or lose permanent resident status or become a Canadian citizen, you must inform the CRA.
* Changes in children/dependents: Any changes in the children or dependents you claim for the GST credit must be reported.
* Banking information: If your bank account changes for direct deposit, you need to provide the updated details.
You can report changes by calling the CRA at 1-800-387-1193, updating your information in My Account online, or mailing in a completed Form RC65, Change Request. Reporting changes right away will prevent any interruptions or issues with your GST payment. The CRA needs your current information, so make sure to notify them as soon as possible when your circumstances change. Taking the time to report changes will ensure you continue receiving the proper GST payment amount you are eligible for.
The GST Payment and Doing Taxes
The GST Payment interacts with your tax return and other benefits in a few key ways:
– You must file your tax return each year in order to continue receiving the GST Payment. This allows the CRA to determine your eligibility and calculate your payment amount based on your income tax return.
– The GST Payment is considered taxable income. Any GST Payments you receive during the tax year must be reported on your tax return.
– Receiving the GST Payment may affect your eligibility for other tax credits, benefits, and income-tested programs. For example, the GST Payment counts as income when determining your eligibility for the Canada Workers Benefit.
– Changes in your income, marital status, or other circumstances can affect your GST Payment amount. Be sure to update your information with the CRA whenever your circumstances change.
– You can choose to have your GST Payment deposited directly into your bank account when you file your tax return. This allows for faster and more reliable delivery compared to receiving a cheque in the mail.
– If you were eligible for the GST Payment but did not receive it, you can request retroactive payments when filing your tax return. The CRA can issue payments owed from previous years.
In summary, the GST Payment works closely with the tax system. File your return annually, report GST Payments as income, and inform the CRA of any changes to ensure you receive the proper payment amount. Coordinating benefits across programs takes some work, but can provide more financial support.
Other Benefits and Credits
The GST Payment is just one of many benefits and tax credits available to eligible Canadians. Here is an overview of some other key benefits:
**Canada Child Benefit (CCTB)**
– Tax-free monthly payment to help eligible families with the cost of raising children under 18 years of age
– Targeted to low and middle-income families
– Amount based on number of children and adjusted family net income
**Old Age Security (OAS) Pension**
– Monthly payment available to most people 65 years of age and older who meet Canadian legal status and residence requirements
– Amount may be increased by the Guaranteed Income Supplement (GIS) based on yearly income
**Guaranteed Income Supplement (GIS)**
– Additional monthly benefits paid to OAS pension recipients who have low income
– Amount depends on marital status and previous year’s income (both individual and combined with spouse)
Canadians who are eligible for the GST Payment may also qualify for CCTB, OAS, GIS, and other supports. It’s a good idea to explore all the options to receive the full benefits and credits you may be entitled to. The government website is a helpful resource for learning more about programs and eligibility.