By Canada runs a self-assessment tax system. That means the Canada Revenue Agency (CRA) does not automatically reduce your taxes for expenses you forgot to claim — if you do not enter a deduction or credit on your return, you simply pay more. For newcomers in their first or second filing year, this is where real money slips away: people who do not yet know the rules routinely overpay by hundreds or even thousands of dollars.
This guide walks through the legitimate, currently-available deductions and credits that are most commonly missed, with the exact line numbers and forms you need. We have removed the ones that no longer exist — several "tax tips" articles still circulating online list programs that were cancelled in 2025.
Quick Answer: What deductions do most people miss?
The most commonly missed are: moving expenses (if you moved 40+ km for work or school), medical expenses above the income threshold, transferred tuition credits, child care costs, charitable donations, union/professional dues, and RRSP contributions. None of these are applied automatically — you must enter them on your return. Importantly, the old $2/day "flat-rate" home office method and the federal Canada Carbon Rebate no longer exist for the 2026 tax year, so ignore any guide that still lists them.
Deduction vs. credit — why it matters
A deduction lowers your taxable income (e.g. moving expenses, RRSP contributions, child care). Its value depends on your marginal tax rate. A non-refundable credit reduces tax payable at a fixed rate (e.g. medical expenses, tuition, donations). For 2026, the lowest federal rate — which sets most non-refundable credit rates — has dropped from 15% to 14%. Both types still require you to file a return. If you have not filed before, start with our first-time newcomer tax filing guide.
1. Moving expenses (Line 21900)
If you moved at least 40 km closer to a new job, a new business, or a full-time post-secondary program, you can deduct eligible moving costs. This is one of the biggest missed deductions for newcomers and students who relocate within Canada.
Eligible costs include transportation and storage of household items, travel (including reasonable meals and lodging), temporary living near the old or new home for up to 15 days, lease-cancellation fees, and certain costs of selling your old home. You claim it on Line 21900 and detail it on Form T1-M. The deduction cannot exceed the income (or scholarship/grant income, for students) you earned at the new location, but unused amounts can carry forward.
Note: the cost of your original move to Canada from abroad is generally not deductible — the rule applies to moves between locations within Canada.
Summary: Moved 40+ km within Canada for work or full-time study? Claim transport, travel, temporary lodging and selling costs on Line 21900 / Form T1-M, up to your income at the new location.
2. Medical expenses (Lines 33099 / 33199)
Medical expenses are the single most commonly overlooked credit — and one of the most valuable. You can only claim the portion of eligible expenses that exceeds the lesser of 3% of your net income (Line 23600) or $2,834 (the fixed 2025 threshold; the figure is indexed yearly). So if your net income is $60,000, your threshold is $1,800, and everything above that counts.
Eligible expenses include prescriptions, dental work, prescription eyeglasses and contacts, hearing aids, many paramedical services, and — importantly for newcomers — private health or dental insurance premiums you pay yourself. You can claim for yourself, your spouse, and dependent children under 18, and you may use any 12-month period ending in the tax year (not just January–December), which helps if your big expenses straddle two years.
Tip: pool the whole family's expenses on the lower-income spouse's return — a lower income means a lower 3% threshold, so more of your spending qualifies. If you are still sorting out provincial health coverage, see our BC MSP health insurance guide for newcomers.
3. Tuition credit and the $5,000 transfer (Lines 32300 / 32400)
Students get a federal tuition credit on eligible fees, reported from Form T2202 issued by their school. If a student does not need the full credit to wipe out their own tax, they can transfer up to $5,000 of the current year's tuition amount to a spouse, parent, or grandparent — and carry forward any remaining amount indefinitely for their own future use.
For newcomers studying part-time or upskilling, this is real money that families often forget to move to whoever can actually use it.
4. Child care expenses (Line 21400)
If you paid for daycare, nursery school, a nanny, or eligible day camps so you (or your spouse) could work or study, you can deduct up to $8,000 per child under age 7 and $5,000 per child aged 7 to 16, using Form T778. The deduction generally must be claimed by the lower-income spouse. Keep official receipts with the provider's name and SIN/business number. Child care is a deduction, not a credit, so it is especially valuable at higher incomes.
5. Charitable donations (Line 34900)
Donations to registered Canadian charities earn a non-refundable credit: 14% on the first $200 (down from 15%, reflecting the 2026 rate change) and 29% on the portion above $200 — rising to 33% for income in the top federal bracket. British Columbia adds its own provincial credit on top.
Two things people miss: you can combine both spouses' donations on one return to clear the $200 threshold faster and reach the higher 29% rate sooner, and you can carry donations forward up to five years. Personal crowdfunding gifts (e.g. GoFundMe to an individual) do not qualify — only registered charities that issue official receipts.
Summary: Pool spousal donations, claim them on one return to push past $200 into the 29% tier, and carry unused amounts forward up to five years.
6. Union and professional dues (Line 21200)
Annual union dues and professional membership fees required to keep a recognized professional status (think regulated professions) are deductible. The amount often appears in box 44 of your T4, but if you paid a professional body directly, you claim it from your own receipt — this is the part people forget.
7. RRSP contributions (Line 20800)
Contributions to a Registered Retirement Savings Plan are deductible against income, and your contribution room shows on your CRA Notice of Assessment. Newcomers build room based on prior-year Canadian earned income, so your room may be small in year one — but contributions made in the first 60 days of 2026 can be applied to your 2025 return. To decide whether an RRSP or a TFSA fits your situation first, read our RRSP vs TFSA guide for newcomers.
8. Student loan interest (Line 31900)
Interest paid on a government student loan (under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act, or a provincial equivalent) earns a non-refundable credit. There is no fixed maximum, and you can claim interest from the current year or carry it forward up to five years. Important: interest on a regular bank loan, personal line of credit, or foreign student loan does not qualify — only official government student loans.
9. Carrying charges and the Disability Tax Credit
Two more that get overlooked:
- Carrying charges (Line 22100): fees for investment counsel on non-registered accounts, and interest on money borrowed to earn investment income, can be deductible. Fees inside a TFSA or RRSP are not deductible.
- Disability Tax Credit (Line 31600): a severe and prolonged impairment certified on Form T2201 unlocks a significant credit, which can be transferred to a supporting family member if the person with the impairment has little taxable income.
What's gone — don't claim these
Several widely-copied "tax tips" lists are out of date. For 2026, these no longer apply:
- Home office "flat-rate" $2/day method — discontinued after the 2022 tax year. To claim home office costs now, you need the detailed method and a signed Form T2200 from your employer.
- Canada Carbon Rebate / Climate Action Incentive Payment — the federal rebate ended with its final April 2025 payment; the BC climate action tax credit also ended (final payment April 4, 2025). There is no 2026 payment.
- Digital news subscription credit — available only for 2020 through 2024; not claimable for 2025 or later.
Frequently Asked Questions
Do newcomers qualify for these deductions in their first year?
Yes. Once you are a resident for tax purposes, you can claim the same deductions and credits as anyone else for the part of the year you were a resident. Some amounts (like the basic personal amount) are prorated by your date of arrival. File a return even if you owe nothing — it unlocks benefits and credits. See our free tax clinic guide for no-cost filing help.
What's the difference between a refundable and non-refundable credit?
A non-refundable credit (medical, tuition, donations) can only reduce tax to zero — you do not get the leftover back. A refundable credit or benefit (like the GST/HST credit) can be paid to you even if you owe no tax. Most of the credits in this guide are non-refundable.
How long should I keep my tax receipts?
Keep all supporting documents — receipts, T-slips, forms — for six years from the end of the tax year. The CRA can ask for proof during a review, and most missed-deduction reassessments fail simply because the person tossed the receipts.
Can I claim a deduction I missed on a past return?
Yes. You can request a change to a prior return for up to 10 years using CRA My Account ("Change my return") or Form T1-ADJ. If you forgot moving expenses or medical costs two years ago, you can still recover that money.
Are my private health insurance premiums deductible?
Premiums you pay yourself for an eligible private health or dental plan generally count as medical expenses on Line 33099. Premiums your employer pays on your behalf usually do not (they are already a tax-free benefit). Keep your statements.
References
- Canada Carbon Rebate (CCR) for individuals — Closed (Canada.ca) — confirms the federal rebate ended in 2025.
- BC eliminates carbon tax — BC Gov News — confirms the BC climate action tax credit was cancelled in 2025.
- Home office expenses — What the changes are (Canada.ca) — flat-rate method discontinued; detailed method + T2200 required.
- RC4065 Medical Expenses (Canada.ca) — medical expense threshold and eligible expenses.
- Line 21400 – Child care expenses (Canada.ca) — $8,000 / $5,000 limits and Form T778.
- Line 32400 – Tuition amount transferred (Canada.ca) — $5,000 transfer maximum.
- Line 31900 – Interest paid on your student loans (Canada.ca) — eligible government loans only, no fixed maximum.
- Line 31350 – Digital news subscription expenses (Canada.ca) — credit available 2020–2024 only.
- 2026 Donation Tax Credit Rates (TaxTips.ca) — 14% first-$200 rate for 2026.