With the April 30 deadline to file taxes fast approaching, representatives from the Canada Revenue Agency (CRA) are reminding Northerners of the benefits available to them.
Sheila Nowik of the CRA reached out to Inuvik Drum to highlight tax benefits as well as to caution Northerners about prevalent scams this time of year.
“This scam seems to be getting more and more sophisticated all the time, and the scammers are getting more advanced,” she said. “What’s happening now is when contact is made with an individual, the personal information of the individual is sometimes included. So when you’re receiving a scam message it could actually include your name or your date of birth or your social insurance number and claiming to be from the CRA, and it can include requests for payment or it can contain a link.
“It’s happening by all communication methods now — it’s text, it’s email. Of course the phone scams have been around and there are letters scams as well.”
Nowik said the CRA will never ask for any information by way of text or email, nor will it demand payment using gift cards, e-transfers or bitcoin. The agency will not send texts or emails with links to follow. She emphasized the CRA won’t threaten taxpayers with arrest or imprisonment either. Instead, the practice is to notify citizens using regular mail to phone the CRA and speak with someone.
If you are unsure whether a message claiming to be from the CRA is legitimate, Nowik said the easiest thing to do is contact the agency directly and verify if they’re trying to contact you.
“It’s just really important that you trust your instincts,” she said. “If something feels off or if you’re being pressured to provide information quickly, trust your gut and consider it a red flag. Say no and protect your personal information.
“You can either call the northern service centre… the northern dedicated line at 1-866-426-1527, or even the general inquiries lines, and we’ll ask you a few questions and we can confirm whether CRA is actually contacting you or not.”
Nowik said it’s important to have your taxes filed by the April 30 deadline, as anyone owing money will begin accruing 10 per cent interest, compounded daily, after that date. Late filers who owe money also get dinged an additional five per cent charge on their total bill, increasing by an additional percentage point for up to 12 months, up to a maximum penalty of 17 per cent.
However, if the government owes you money, Nowik said the penalties for late filing do not apply. However, GST, carbon tax rebates, the Canada Child Benefit and the Canada Workers Benefit are not issued to people who don’t have their taxes up to date.
Tax benefits for Northerners
To offset the higher cost of living in the North, the CRA offers a number of tax credits exclusive to Northerners. Anyone who lives in the prescribed zone, which encompasses all three territories, is able to access the Northern residency deduction. For each day you maintain a dwelling, you can claim $11. If you are the only person in the household claiming the benefit then you can claim an additional $11 per day.
“We’re talking about a self-contained domestic establishment,” Nowik clarified. “So it’s generally a complete and separate living unit with a kitchen, bathroom, sleeping and sleeping facilities and has its own private access. So it could be housing, apartments, mobile home — anything along those lines.”
But that’s not all, a Northern travel deduction is also available for anyone who took a medical or personal trip from the prescribed zone. Up to two personal trips can be claimed per person, but you will want to make sure you retain a receipt for the flight with your name on it. The amount that can be claimed per flight is the lowest of three numbers: the cost of the ticket, your total travel expenses or the lowest return airfare for your location, which the CRA lists on its website.
Other benefits Northerners can take advantage of include expenses incurred by working from home. Some employment expenses, such as money spent on fuel to do your job, are also eligible for a tax credit. This requires you to have receipts to back up the claim.
Donations to registered charities are also eligible for a non-refundable credit. Up to 75 per cent of your net income in donations can be claimed, with 15 per cent of the first $200 able to be claimed and then 29 per cent of any donations over that.