Module C

Question 1

Are refundable or non-refundable tax credits applied first and why?

Answer 1

Non-refundable, since we try to get the payable as low as possible before applying the refundable credits

Question 2

What are the characteristics of non-refundable tax credits?

Answer 2

1. Reduce taxes payable, but not below 0
2. Many credits available

Question 3

What are the characteristics of refundable tax credits?

Answer 3

1. Reduce taxes payable into a refund position
2. Income taxes withheld (T4) - the only one we focus on in 206