Blog Layout

How to Claim the British Columbia Sales Tax Credit

Mark Virgil Lofranco • 29 October 2024

When you shop in BC, the price tag often doesn’t reflect the total amount you’ll pay at checkout. This is because provincial sales tax (PST) is added to most purchases. For some low-income individuals and families, the BC Sales Tax Credit is a helpful way to offset the costs of this provincial tax.




This refundable tax credit is designed to help low-income British Columbians reduce the impact of PST on their everyday purchases. Even if you have no taxable income, you can still claim the BC Sales Tax Credit and receive a refund by filing your tax return. Here’s a breakdown of how it works and how you can benefit from it.


Understanding PST and GST in BC


In BC, you pay a 7% Provincial Sales Tax (PST) on most goods, services, and software. Businesses are responsible for collecting PST at the time of sale. Additionally, there’s a 5% Goods and Services Tax (GST), which is a federal sales tax applied to most purchases across Canada. Together, BC residents generally pay a 12% total sales tax on purchases.


However, some goods and services are exempt from PST, such as:


  • Basic groceries
  • Health and medical supplies
  • School supplies
  • Safety equipment and apparel


What Is the BC Sales Tax Credit?


The BC Sales Tax Credit is a refundable credit available to low-income residents to help reduce the financial burden of paying PST on everyday purchases. You claim this credit when you file your income tax return, even if you have no income.


How Much Is the BC Sales Tax Credit?


The maximum amount of the credit is $75 for individuals and $75 for a spouse or common-law partner, totaling $150 for couples. However, the credit decreases as your income rises:


  • If you are single, the credit is reduced by 2% of your net income over $15,000.
  • For couples, the reduction begins when your combined family income exceeds $18,000.


For example, if a couple has a combined income of $27,000, their eligible claim is calculated as follows:


  1. Subtract $18,000 from their income, leaving $9,000.
  2. Calculate 2% of $9,000, which is $180.
  3. Subtract the $180 from their maximum claim of $150, resulting in a claim of zero.


Who Is Eligible for the BC Sales Tax Credit?


To qualify for the BC Sales Tax Credit, you must meet the following criteria:


  • Be at least 19 years of age.
  • Have a spouse or common-law partner.
  • Be a parent.


You are also ineligible if you were incarcerated for more than six months during the tax year, including December 31.


How to Claim the BC Sales Tax Credit


Claiming the BC Sales Tax Credit is straightforward. Here’s how:


  1. File your income tax return: Use form 5010-TC BC479 to calculate your eligibility and the amount you can claim.
  2. Calculate your claim: Subtract $15,000 (for individuals) or $18,000 (for couples) from your income. Multiply the remaining amount by 2%, then subtract that from the maximum claim of $75 (or $150 for couples). The result is your eligible claim.


Automated Calculation


If you use tax software like TurboTax, the BC Sales Tax Credit is automatically calculated when you start your return. Initially, it will show the maximum amount of $75 for singles or $150 for couples. Once you enter your income, the software will adjust the credit accordingly.


Final Thoughts


The BC Sales Tax Credit is a valuable way for low-income individuals and families to reduce their provincial tax burden. Make sure to file your taxes, even if you have no income, to take advantage of this refundable credit and potentially receive a refund.


Key Points:


  • The BC Sales Tax Credit is a refundable benefit designed to help low-income individuals and families reduce the impact of provincial sales tax (PST).
  • Individuals can receive up to $75, while couples may claim a maximum of $150.
  • The credit amount is determined by income, with a reduction formula applied based on earnings.

Understanding the USA/Canada Tax Treaty

by Mark Virgil Lofranco • 9 December 2024
Are you a U.S. citizen living and working in Canada? Maybe you're a dual resident unsure of which tax rules to follow, or perhaps you cross the border daily to work for a Canadian company. Understanding the U.S./Canada Tax Treaty is essential for anyone earning cross-border income.  Filing taxes in just one country can be complex, and the U.S. tax system is one of the most complicated in the world. Figuring out taxes for both Canada and the U.S. can be challenging, but don’t worry, we’ve got answers. Here’s how your taxes work under the U.S./Canada tax agreement if you’re living or working in Canada and earning income.

9 Commonly Overlooked Tax Deductions for Startup Owners

by Mark Virgil Lofranco • 9 December 2024
Starting your own business is an exciting and rewarding journey, but with all the enthusiasm, some important financial details—like tax deductions—can be overlooked. As a new business owner, reducing your tax burden is crucial to maximizing profits, yet many Canadian small-business owners miss out on valuable tax deductions, paying up to 42% in taxes.  While you're likely familiar with common deductions like office supplies, meals, and wages, there are many lesser-known tax breaks that could save you money. Let’s dive into nine commonly missed tax deductions that could benefit your startup.

Methods to withdraw RESP

by Mark Virgil Lofranco • 9 December 2024
Navigating the financial landscape of your child’s education expenses, especially with rising inflation, can be challenging. Whether you're already contributing to a Registered Education Savings Plan (RESP) or considering opening one to fund your child’s post-secondary education, it’s essential to understand the rules and benefits associated with RESP withdrawals.  Here’s a comprehensive guide to help you make the most of your RESP in Canada.

Essential Tax Credits and Grants Every Small-Business Owner Should Be Aware Of

by Mark Virgil Lofranco • 9 December 2024
Did you know that public funding could help kickstart your business? While many entrepreneurs are familiar with startup loans, fewer know about the wealth of public funding options available—specifically, tax credits and grants. These financial resources can be game changers for launching and growing your business.  This article will guide you through various tax credits, grants, and other public funding options that can support your small business.

How to Handle Toronto's Inherent Property Tax Increase: Tax Advice for First-Time Buyers

by Mark Virgil Lofranco • 9 December 2024
Buying your first home in Canada is an exciting milestone. However, potential and current homeowners in Toronto should be aware of a major change on the horizon: a proposed 10.5% increase in residential property taxes, the largest since 1998. This hike, driven by a nearly $1.8B budget shortfall, includes a 1.5% increase dedicated to city-building projects, such as transit and housing. Homeowners could face an extra $26.75 per month, or $321 annually, in property taxes. City officials have also warned that without federal funding, property taxes could rise even further, up to 16.5%.

A CRA Business Number (BN): What Is It and Who Needs One?

by Mark Virgil Lofranco • 9 December 2024
Congratulations! Whether you’ve just become self-employed or started a side gig to earn extra income, you're on an exciting journey. Amid all the hustle, you might have come across something called a Business Number (BN). But what exactly is it, and do you need one? Let’s dive in and explore everything you need to know about registering for a BN as a self-employed person or small business owner.

2023 Canada Tax Checklist: Essential Documents You Need to File Your Taxes

by Mark Virgil Lofranco • 9 December 2024
Picture this: tax season is approaching, and you’re frantically trying to gather the documents you need, worried you might miss something important. Sound familiar? That’s why having a tax checklist is essential. It helps you stay organized and ensures you have everything you need to file smoothly.  In this article, we’ll cover all the documents you need to have handy when filing your taxes!

2024 Tax Deadline: When Is the Last Day to File Your Taxes?

by Mark Virgil Lofranco • 9 December 2024
As a taxpayer, one of the most critical aspects to stay on top of is the deadline for filing your taxes. The Canada Revenue Agency (CRA) enforces strict due dates for both returns and payments. Filing on time not only helps you avoid interest and penalties but also ensures you get your refund faster. We’ve compiled all the key tax dates you need to know for a stress-free tax season.

NETFILE Opening in Canada: When You Can Start Filing Your Taxes

by Mark Virgil Lofranco • 9 December 2024
The way we file taxes has evolved dramatically over the past two decades, making it faster and more efficient to submit your returns. With tools like NETFILE, the Canada Revenue Agency (CRA) offers taxpayers a quick and secure method to file returns online. This article explains when to file your taxes, key deadlines, how NETFILE works, and why it’s a great option for fast-tracking your tax return.

Missed the Tax Deadline? Here’s Why It’s Not Too Late to File

by Mark Virgil Lofranco • 9 December 2024
If you missed the tax filing deadline and are feeling anxious, take a deep breath—it’s more common than you think, and it’s not too late to take action!  You can still file your tax return even after the deadline, and this article will walk you through the process to help you file confidently and minimize any potential penalties.
More posts
Share by: