Making Sense of Taxes
Filing taxes in Quebec means navigating both federal and provincial rules. One of the most common questions individuals and businesses have is: What are deductions, credits, and benefits? Understanding these categories can help you reduce your tax bill, maximize your refund, and avoid costly mistakes.
At Accounting Montreal, we help clients every year take advantage of the rules to keep more money in their pockets.
Tax Deductions: Reduce Your Income Before Tax
Deductions lower your taxable income before the government calculates how much you owe.
Common Deductions in Quebec
- RRSP contributions (up to your annual limit)
- Spousal or child support payments
- Moving expenses (if you moved more than 40 km for work)
- Self-employment or business expenses
Example: If you earn $70,000 and contribute $10,000 to your RRSP, only $60,000 is taxable.
For business owners, deductions are broader, covering costs such as office rent, professional fees, and vehicle expenses.
Tax Credits: Reduce the Tax Owed
Unlike deductions, credits apply directly against the tax you owe. They come in two forms:
- Non-refundable credits: Can reduce your tax payable to zero, but no refund is given if they exceed your tax liability.
- Refundable credits: If the credit is larger than your tax payable, you receive the difference as a refund.
Key Federal Credits (2025)
- Basic Personal Amount (BPA): $16,129 federally in 2025 (Canada.ca)
- Disability credit
- Caregiver credit
- Tuition amounts
- Canada Workers Benefit (for low-income earners)
Quebec-Specific Credits (2025)
- Basic Personal Amount: about $18,571 (Revenu Québec)
- Work-income credit (phased out above $56,500)
- Career extension credit (available from age 65 in 2025)
- Home support for seniors
- Childcare expenses credit
- Solidarity tax credit
- Donations & political contributions
Benefits: Monthly or Annual Payments
Benefits are payments from the government, often based on family size and income. They are designed to support low- and middle-income households.
Examples
- Federal: Canada Child Benefit (CCB), GST/HST Credit
- Quebec: Family Allowance, refundable credits for families, low-income supplements
These benefits are usually paid monthly, unlike credits which apply at tax filing.
What Changed in 2025?
Several updates affect Quebec taxpayers this year:
- Federal middle-class tax cut → lowest federal rate reduced to 14% on the first $57,375 of income.
- Quebec basic personal credit indexed to $18,571.
- Career extension credit now applies only to workers 65+.
- Innovation & R-D refundable credit (CRIC) introduced for businesses.
- Media digital transformation credit extended until December 31, 2025.
Why This Matters for You
Maximizing deductions, credits, and benefits can mean thousands of dollars saved. Yet, most taxpayers miss opportunities because the system is complex.
At Accounting Montreal, we provide:
- Personal tax services to ensure every credit and benefit is claimed
- Corporate tax services to optimize deductions and incentives
- Expat and cross-border tax guidance for Canadians abroad
References
- Government of Canada – Taxes
- Revenu Québec – Tax Credits for Individuals
- Ministère des Finances du Québec – 2025 Budget Documents
Confused about which tax deductions or credits apply to you? Don’t leave money on the table. Contact Accounting Montreal today to get expert tax guidance and maximize your financial benefits.
