GST/HST Credits

I've already left Canada and I'm still getting cheques from the tax authority!

You have filed your tax return in Canada as a resident for tax purposes? After you left Canada, did you receive extra payments (in addition to your tax refund) every quarter? If you still get cheques from the tax authority after leaving, one step has been forgotten:

After returning home, you had to call the tax authorities and tell them the departure date and the new address so that they don’t automatically send you extra cheques that you have to pay back later anyway.

A brief overview of the GST/HST credits:

  • The GST credit is a tax-free payment for low-income earners.
  • It is granted automatically if you submit the tax return as a “resident”.
  • You don’t have to apply for it separately.
  • The calculation of the GST credit is based on the total world income for the previous year.
  • The first payment always starts in July.
  • The GST credit is then paid quarterly. (July, October, January, April)
  • You are only eligible for the GST credit as long as you are present in Canada.

Example:

If you filed your tax return for the 2021 tax year, the worldwide income from 2021 was taken for the calculation. The four payments then were:

  • July 2022
  • October 2022
  • January 2023
  • April 2023

I received a letter. Why do I have to pay back the GST credits?

As mentioned above, the GST credit is only available as long as you are in Canada.

Since you left Canada during the tax year, you are no longer eligible for the GST credit after departure. When submitting the tax return as a “resident” you must report the departure date, then the tax authority will automatically determine what amount you have to pay back and send you a repayment request letter.

Here is the clarification for the tax year:

  • You left Canada between January – June ==> no GST credit 
  • You left Canada between July – September ==> you are only eligible for the payment July
  • You left Canada between October – December ==> you are only eligible for the payments July + October

I received cheques, but I haven't cashed them yet, what do I do?

My recommendation is to cash the cheques anyway, because sometimes the amount includes months that you are actually entitled to.

If you then submit a tax return for the year of your departure, the tax authority will automatically calculate the amount of the GST/HST. Depending on when you left, you have to pay back all or only a part of it.

You will then receive a letter with the exact statement of these GST/HST credits and the request to pay the amounts back. Very often, the tax authority offsets the outstanding amounts against the tax refund.

I have to repay the GST credits, what options do I have?

If you no longer have a Canadian account, there is a third party recommended by the CRA where you can pay by credit card. However, fees apply. If you’re no longer in Canada, this option is the only one. 

PaySimply is recommended by the CRA and these are the steps to click:

  • Individual Taxes
  • Benefits
  • Enter your SIN and complete the payment.