Reduce Tax by Claiming Your Basic Personal Amount
Tax Filing: By claiming the Basic Personal Amount (BPA) a portion of your income, if not all, could be tax free
The Basic Personal Amount (BPA) is a non-refundable tax credit designed to help Canadians reduce tax. The Government of Canada establishes a new basic personal amount each year, often indexed to inflation
Examples:
• Below the BPA - If your income is below the basic personal amount, you will receive full credit, and may not have to pay federal income tax
• High-income earner - The non-refundable tax credit is income tested and based on your net income. Above a certain threshold, a reduced credit will be received
• Main income earner - As the main income earner, you may be able to transfer your unused BPA to a spouse or common law partner, or, an eligible dependent, thereby reducing taxes paid as a household
Each province and territory sets its own BPA. If eligible, you can further reduce your taxes