Your Personal Tax Return in Ontario: The Deductions and Credits People Miss

Every spring, millions of Ontarians file a personal income tax and benefit return (the T1). Many use software, some use a professional, and a surprising number leave money on the table, not because they did anything wrong, but because they didn’t know a deduction or credit applied to them.

This guide covers the essentials of filing a personal tax return in Ontario: who has to file, key deadlines, how the system works, and the deductions and credits we most often see people miss. It also covers specific considerations for self-employed individuals, newcomers, and families.

Key takeaways

• Most individuals must file by April 30. Self-employed individuals (and their spouses) have until June 15, but any balance owing is still due April 30.
• For 2026, the lowest federal tax rate is 14% and the federal basic personal amount is $16,452 for most taxpayers.
• Deductions reduce taxable income; credits reduce tax payable. Both matter.
• Commonly missed items include medical expenses, moving expenses, child care, home office expenses, union and professional dues, carrying charges, and Ontario-specific credits.
• Filing on time is important even if you have no income: many benefits, including the Canada Child Benefit and the GST/HST credit, depend on it.

Who needs to file

You generally must file a return if you owe tax for the year. But you should also file if:

• You want to claim a refund.
• You want to receive or continue receiving benefits and credits, such as the Canada Child Benefit, the GST/HST credit, or the Ontario Trillium Benefit.
• You had self-employment income or need to contribute to CPP.
• You disposed of capital property or realized a capital gain.
• You want to carry forward unused amounts like tuition, RRSP room, or capital losses.
• The CRA has sent you a request to file.
• You and your spouse or common-law partner want to split eligible pension income.

For many lower-income individuals and newcomers, filing is the key that unlocks hundreds or thousands of dollars in benefits.

Key deadlines

If you owe tax and file late, the penalty is generally 5% of the balance owing plus 1% for each full month late, up to 12 months. Interest also applies on unpaid balances from April 30.

How personal tax works in Canada

Income

Your total income includes employment income, self-employment income, investment income (interest, dividends, capital gains), rental income, pension income, and certain government benefits.

Deductions

Deductions reduce your taxable income. Examples include RRSP and FHSA contributions, child care expenses, moving expenses, union dues, and carrying charges. Because they reduce income, deductions are worth more to higher-income taxpayers.

Non-refundable credits

Credits reduce your tax payable. Most federal non-refundable credits are calculated at the lowest federal rate (14% for 2026). Examples include the basic personal amount, the spousal amount, medical expenses, charitable donations, the disability tax credit, and tuition. Non-refundable credits can reduce your tax to zero, but they won’t create a refund on their own.

Refundable credits and benefits

Refundable credits can produce a refund even if you owe no tax, such as the Canada Workers Benefit. Benefits like the Canada Child Benefit and the GST/HST credit are paid separately throughout the year based on your filed return.

2026 federal tax brackets

Ontario applies its own brackets, rates, and surtax on top of federal tax.

Deductions and credits people commonly miss

1. Medical expenses

The medical expense credit covers a broad range of costs: prescription drugs, dental work, eyeglasses and contact lenses, physiotherapy, psychologists, many medical devices, certain travel costs for medical treatment, and premiums paid to private health plans (including premiums deducted from your pay if you paid them).

Key points:

• You can claim expenses for any 12-month period ending in the tax year, so choose the period that maximizes your claim.
• Only the amount above a threshold counts. For 2026, that’s the lesser of 3% of net income or $2,890.
• It’s often better for the lower-income spouse to claim the family’s medical expenses because the 3% threshold is lower.
• You can include expenses for your spouse and dependent children, and in some cases other dependants.

2. Moving expenses

If you moved at least 40 kilometres closer to a new job, business location, or full-time post-secondary school, you may be able to deduct moving costs such as transportation, storage, temporary living expenses, the cost of selling your old home, and the cost of breaking a lease. The deduction is limited to income earned at the new location, but unused amounts can be carried forward.

3. Child care expenses

Payments for daycare, nannies, day camps, and certain boarding schools can be deducted, generally by the lower-income spouse, subject to annual limits per child. Keep receipts with the provider’s name and SIN or business number.

4. Home office expenses for employees

If you work from home and your employer requires it (with Form T2200 signed by your employer), you may be able to deduct a portion of eligible home expenses such as rent, utilities, internet, and maintenance, using the detailed method. Commissioned employees can also deduct a portion of property taxes and home insurance. The temporary flat-rate method used during the pandemic years is no longer available.

5. Business-use-of-home for self-employed

Self-employed individuals can deduct a portion of home expenses, including rent or mortgage interest, utilities, insurance, property taxes, and maintenance, if the space is their principal place of business, or is used exclusively for business and regularly for meeting clients. The deduction can’t create or increase a business loss, but unused amounts carry forward.

6. Union, professional, and licensing dues

Annual dues paid to unions and professional associations required to maintain a professional status recognized by law are deductible. They’re often shown on your T4 but can be missed when paid personally.

7. Carrying charges and interest expense

Interest on money borrowed to earn investment income (such as a non-registered investment loan) and fees for certain investment management services in non-registered accounts may be deductible.

8. Charitable donations

Federal credits are 14% on the first $200 of donations (for 2026) and higher on amounts above $200, with additional Ontario credits. Spouses can pool donations on one return to get past the $200 threshold sooner, and donations can be carried forward up to five years.

9. Disability tax credit (DTC)

If you or a dependant has a severe and prolonged impairment, the DTC can provide significant tax relief, and eligibility opens access to other programs such as the RDSP. An approved Form T2201 is required. In some cases, the credit can be claimed retroactively for up to ten years.

10. Canada caregiver credit

If you support a spouse, common-law partner, or dependant with a physical or mental impairment, you may be eligible.

11. Tuition credits

Students can claim eligible tuition fees, and unused amounts can be carried forward indefinitely or transferred (up to a limit) to a parent, grandparent, or spouse. Students should file even if they have little income, to establish their carryforward.

12. Interest on student loans

Interest paid on eligible government student loans is a non-refundable credit and can be carried forward for five years.

13. Pension income splitting

If you’re receiving eligible pension income, you may be able to allocate up to 50% to your spouse or common-law partner, potentially reducing your combined tax and helping avoid OAS clawback.

14. FHSA contributions

First Home Savings Account contributions (up to $8,000 a year, $40,000 lifetime) are deductible, and qualifying withdrawals to buy a first home are tax-free. You don’t have to deduct contributions in the year you make them; you can carry the deduction forward to a higher-income year.

15. RRSP contributions, including spousal RRSPs

RRSP contributions reduce taxable income. Contributions to a spousal RRSP can help balance retirement income between spouses. You also don’t have to deduct contributions in the year you make them.

16. Ontario-specific credits

Ontario residents may be eligible for several provincial programs, including:

• Ontario Trillium Benefit, which combines the Ontario energy and property tax credit, the Northern Ontario energy credit, and the Ontario sales tax credit.
• Ontario Child Care Tax Credit (CARE) for eligible families with child care expenses.
• Low-income individuals and families tax credit (LIFT), which reduces Ontario tax for lower-income workers.
• Ontario Seniors’ Public Transit Tax Credit for seniors 65 and over.

Many of these are claimed on the Ontario credits form (ON-BEN) or on the provincial tax schedule. Missing a form can mean missing the benefit.

17. Eligible educator school supply credit

Teachers and early childhood educators can claim a refundable credit for eligible teaching supplies they buy with their own money.

18. Other targeted credits

Various targeted credits exist for specific groups, such as volunteer firefighters and search and rescue volunteers, and the list changes as budgets add or end programs. A professional preparer or up-to-date software should prompt you for the ones that apply.

Special considerations for the self-employed

If you’re self-employed, your return includes a statement of business activities (Form T2125). Key points:

• Report all business income, including cash and e-transfers.
• Deduct all legitimate business expenses: advertising, supplies, professional fees, phone and internet (business portion), vehicle expenses (business portion, supported by a logbook), business-use-of-home, and capital cost allowance on equipment.
• CPP: self-employed individuals pay both the employee and employer portions, 11.9% on net earnings up to $74,600 in 2026, plus 8% CPP2 between $74,600 and $85,000. Part of these contributions is deductible from income and part is claimed as a non-refundable credit.
• HST: if you’re registered, your HST return is separate from your income tax return.
• Instalments: if your net tax owing exceeds $3,000 in the current year and in either of the two previous years, you may need to pay quarterly instalments.

Special considerations for newcomers to Canada

If you arrived in Canada during the year:

• You’re generally taxed on worldwide income from the date you became a resident.
• Your basic personal amount and some credits are prorated based on your residency period.
• Filing is essential to start receiving the GST/HST credit and Canada Child Benefit.
• You may need to report foreign property if its total cost exceeds $100,000 (Form T1135), generally starting after your first year of residency.
• Some income from your former country may also be taxable there; tax treaties help prevent double taxation.

Mistakes to avoid

• Forgetting slips. Check CRA My Account for T4s, T5s, T3s, and other slips before filing.
• Not reporting all income, including tips, side gigs, and cash income.
• Over-contributing to RRSPs or TFSAs. Penalties are 1% per month on excess contributions.
• Not filing because you have no income and missing out on benefits.
• Claiming expenses without receipts. Keep supporting documents for six years.
• Missing the June 15 vs. April 30 distinction for self-employed individuals: the filing deadline is later, but payment is due April 30.
• Not updating your marital status or address with the CRA, which affects benefits.

Frequently asked questions

How Solstice Partners can help

Solstice Partners prepares personal tax returns for individuals, families, newcomers, retirees, self-employed professionals, and business owners across Toronto and the GTA. We review your full picture, not just the slips, to find deductions and credits you’re entitled to, coordinate your personal return with your business or corporate filings, and handle CRA questions if they arise.

If you’d like your next return done thoroughly and on time, book a consultation with Solstice Partners. Getting started before the spring rush means more time to plan and fewer surprises.

This article provides general information about Canadian and Ontario personal income tax based on 2026 figures and rules current as of October 2026. It isn’t tax or financial advice for your specific circumstances. Tax rules, credits, and benefit programs change frequently; consult a qualified professional or the CRA for guidance on your situation.