Tax credits
Refundable tax credit
A tax credit that can be paid to you even if you owe no tax. If the credit is larger than your tax owing, you receive the difference as a payment.
Refundable credits can provide cash to low-income households that pay little or no income tax.
Where you may see this
T1 General return, CRA notices of assessment, and benefit payment schedules.
Commonly confused with
Non-refundable tax credit, those only reduce tax owing and cannot create a refund by themselves.
The exact definition and rules can differ by program. Check the official rules for the benefit you are applying for.
Related terms
Tax credits
Non-refundable tax credit
A tax credit that reduces the tax you owe but cannot be paid to you as cash if you have no tax payable.
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Ontario Works (OW)
Ontario's financial assistance program for people in temporary financial need, with employment participation requirements.
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Adjusted family net income (AFNI)
The income amount the government uses to calculate many income-tested benefits. It starts with family net income and applies specific adjustments from your tax return.
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Benefit year vs tax year
Your tax year is the calendar year on your return; many benefits use a July to June benefit year based on an earlier tax year.
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Canada Workers Benefit (CWB)
A refundable tax credit for low-income workers, with additional amounts for eligible families and people with disabilities.
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