Average income tax refund for 2011 is up $70

Ottawa, Ontario, June 29, 2012… The Canada Revenue Agency (CRA) announced today that the average refund for the 2011 tax-filing season is more than $1,580—an increase of about $70 per person since last year.

Many Canadians are receiving their refunds in as little as seven days by switching to electronic filing. Among the 25.4 million returns received as of June 14, 16.8 million were filed using electronic services, which is up from 16.1 million at the same time last year. Paper filing continues to decrease in popularity. So far this year, 8.6 million paper returns have been filed compared to the 8.8 million that were filed last year. The CRA’s electronic services are the quickest way for Canadians to file, and these services are easy and secure to use. Those who sign up for direct deposit through the CRA’s online services are able to receive their refunds even faster.

Tax filers are discovering the benefits of using the CRA’s electronic services year-round and not just during tax-filing season. Using electronic services, such as My Account and Quick Access, allows you to track your refund, view your benefit and credit payments and your registered retirement savings plan information, set up direct deposit, and much more. For more information on electronic services, go to www.cra.gc.ca/electronicservices.

This year, new tax credits such as the volunteer firefighters’ tax credit and the children’s arts tax credit helped Canadians reduce their taxes. Volunteer firefighters were able to claim up to $3,000 on their tax return and parents were able to claim up to $500 for enrolling their children in prescribed programs. Other credits such as the public transit tax credit and pension income splitting continue to help Canadians keep more money in their pockets.

The CRA takes this opportunity to thank Canadians who filed their income tax and benefit return on time. If you missed the April 30 filing deadline, it is in your best interest to file as soon as possible to receive benefit payments such as the GST/HST credit or the Canada child tax benefit and to avoid paying more penalties and interest charges.

New in taxes for 2010

Here are the major changes per CRA guide:

Universal Child Care Benefits (UCCB): A single parent can choose to include all UCCB amounts in the dependant’s income.

Elect to defer Security option benefits: If you exercised an option and bought eligible securities, the election to defer the benefits will no longer be available.

Special relief for tax deferral elections on security option benefits: You may elect for special relief in respect of gains from a disposition of eligible securities on which you elected in a previous year to defer the option benefits.

Scholarship exemption and Education amount: Programs consisting mainly of research are eligible for scholarship exemption and the education amount only if they lead to a college or university degree. Post-doctoral fellowships are taxable. For a scholarship received with a part-time program for which you can claim the part-time education amount, scholarship exemption is equal to the amount of tuition paid plus the cost of related materials.

U.S. Social Security benefits: You may be eligible to claim a deduction of 50% of the benefits received.

Employment Insurance premiums on self employment and other eligible earnings: You may be able to enter into an agreement with the Employment Insurance Commission to participate in the new EI Measures for the Self Employed People.

Medical expenses: Cosmetic procedures qualify as medical expense only if they are required for medical or reconstructive purposes.

Investment tax credit: Eligibility for the mineral and exploration tax credit has been extended to flow-through shares agreements up to April1, 2011.

Rollover of RRSP proceeds to a registered disability savings plan (RDSP): The existing RRSP rollover rules will be extended to allow a rollover of a deceased individual’s RRSP proceeds to the RDSP of the deceased individual’s financially dependant infirm child or grandchild.