GST Credit vs. Solidarity Tax Credit: What’s the Difference?

The GST credit and the Solidarity tax credit are often mentioned together because they share a common objective: providing support to households with low and modest incomes.  But you should bear in mind that one is federal and the other provincial.

In this article, we will help make the distinction clearer.

GST credit (goods and services tax)

This refundable federal tax credit is meant to offset the regressive nature of the commodity tax.

Solidarity tax credit

The solidarity tax credit is a refundable provincial tax credit.

What do they have in common?

• The amount of both credits is calculated based on the family situation and revenue on December 31 of the previous year.
• The payments for both credits are made quarterly, thus allowing those eligible to receive regular financial assistance throughout the year.
• To be eligible, you must meet certain requirements and file an income tax return.
• The solidarity tax credit includes a QST component, which is why the two tax credits are often mentioned together.

Keep in mind that the GST credit is a distinct federal tax credit, whereas the QST credit is an integral part of the Quebec solidarity tax credit. Although they have a common objective, these two credits are administered differently and cover distinct taxes.

What are the eligibility criteria?

GST credit

• You must be at least 19 years old and a resident of Canada.
• You must have filed an income tax return.

Please note that if you file a joint tax return, only one spouse will receive the credit for the couple.
If you are a newcomer, you must fill out form RC151 in order to receive this credit.

Solidarity tax credit

•  You must be at least 18 years old on December 31 of the previous year. If you are under 18, you could be eligible if you had a spouse, if you were a parent of a child who lived with you or if you were recognized as an emancipated minor by a competent authority.
• You were a Quebec resident on December 31 of the previous year.
• You or your spouse must be either a Canadian citizen, a permanent resident, a protected person within the meaning of the Immigration and Refugee Protection Act or a temporary resident who has been living in Canada for the last 18 months.
• Your household income cannot exceed a certain threshold.

Caution! There are two components to the solidarity tax credit.

Housing component:

• If you are a tenant or subtenant, you must submit the RL-31 slip provided by your landlord;
• If you are a homeowner, you must provide the roll number or cadastral designation shown on your municipal tax bill.

Component for individuals living in Northern Villages:

• This component takes into account the fact that the cost of living is higher in a Northern Village than elsewhere in Quebec;
• To access the list of the 14 Northern Villages eligible for this component, click here.

Important: you must be registered for direct deposit to receive this credit. To find out how to register for direct deposit, click here.

Keep in mind that both credits are calculated based on the net family income. Usually, if your family income is below the low-income threshold, you could be eligible. To find out more about the different tax credits that could help you make the most of your tax benefits, don’t hesitate to contact us.