Tuesday, September 22, 2009

Home Renovation Tax Credit, not Rebate

In an attempt to get Canada's economy moving, the federal government has introduced the Home Renovation Tax Credit (HRTC) for the 2009 tax year. Many people are under the misconception that after a home renovation, when receipts are submitted to the government, they will receive a rebate of up to $1,350. I have seen the commercials and they can be very misleading. The way the term credit is used in the commercials, it can be easily misunderstood as rebate.

This is a tax credit and not a rebate. Credit means you may use the amount to decrease your taxes payable on your income tax return; rebate is when you first spend the money and then get a portion back.

Not all home renovations are eligible. There are exclusions.

The HRTC applies to eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350.
It applies to eligible purchases made after January 27, 2009, and before February 1, 2010.

For more information click here.

While you’re here, you might want to take a look at other tax credit opportunities that may apply to you; there are some rather interesting ones, such as the SRED program, which allows businesses conducting scientific research and experimental development to receive cash refunds and/or tax credits for their work.

Happy Shopping!!

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