Income tax refund changes

Apr 12, 2012

by Susan Irwin, Lawyer/Executive Director

When filing your income tax return for 2011 you may have an unpleasant surprise if you are a low income person expecting a lump sum tax refund.

In previous years, eligible taxpayers could count on a lump-sum refund from three provincial tax credits: the Ontario Energy and Property Tax Credit, Ontario Sales Tax Credit, and Northern Ontario Energy Credit. Many people with low incomes relied on getting a lump-sum tax refund to help pay for more costly items or simply to pay bills.

What you may not have realized is that over the last two years, the money for these tax credits began to be paid out in cheques issued throughout the year. The idea behind the change from a single lump sum tax refund to periodic tax credit payments was to provide people with low incomes a more stable and steady source of income over the course of the year.

If you have been getting this money throughout the year, you will no longer get these tax credits in a lump-sum refund from filing your 2011 income tax return. Of course, you may still get a refund for other tax credits or for income taxes you paid if you worked during the year.

Many people didn’t know about this change and were unpleasantly surprised to discover that no lump sum was available upon filing their return this year. It seems that many people were unpleasantly surprised, so much so, that they complained loudly to the provincial government.

It was therefore a pleasant surprise when, in response to the numerous complaints from Ontarians, the provincial government agreed to provide taxpayers with the option when filing their income tax return of choosing between getting a lump sum or getting monthly payments for provincial tax credits. However this option will not be available until next year (2013).

Remember, in order to get the tax credits paid to you at all, you must file your tax return, even if you don’t have any income to report. When you file your income tax return, you have to check the boxes on the part of the provincial tax credit form that asks if you want the income tax credits. If you want to find out how much you could get from these tax credits, you can use the government’s online tax credit calculator: www.rev.gov.on.ca/en/taxcredits/CalculatorQuestions.asp.

If you need help to file your income tax return, there are some free programs that are available to help you. Volunteers through the Canada Revenue Agency’s “Volunteer Income Tax Program” are able to prepare simple income tax returns without charge for low-income residents. You can find out more about this program by calling 1-800-959-8281 or checking online at www.cra-arc.gc.ca/tx/ndvdls/vlntr/nd-eng.html.

If you live in North or Central Frontenac townships, the Volunteer Income Tax Program is available through Northern Frontenac Community Services. Call 613-279-3151 for more information. For residents of the Township of Addington Highlands, program information is available through Land O’ Lakes Community Services at 613-336-8934.

For residents of South Frontenac Township the program is available through Southern Frontenac Community Services, 613-376-6477

This column is not intended to provide legal advice; it is just general legal information provided by volunteer local lawyers and the staff of community legal clinics and Legal Aid Ontario. The law can change. You must contact a lawyer to determine your legal rights and obligations. If you are living on a low income, you may be eligible for free legal help from Legal Aid Ontario (criminal, family or immigration) or your local community legal clinic (income security programs, employment law, tenants’ rights, or human rights). You can reach Legal Aid Ontario at 1-800-668-8258 or visit them online at www.legalaid.on.ca. Contact Rural Legal Services (613) 279-3252 or toll free 1-888-777-8916 for more information.