The following excerpt is from Essential Tax Facts by Evelyn Jacks. On Monday, April 11 at noon (ET), join us for a live discussion with Ms. Jacks .

There are always numerous changes to the tax return year over year, although the form may look similar. To read between and behind the lines we’ve prepared this summary of news. Further explanations and specific tax tips to help you maximize your opportunities will follow in Parts 2 to 6 of this book. We’ve broken our discussion of the changes into several categories:

A. Free Money: Refundable Tax Credits

B. Changes to Your Relationship with the Tax Department

C. Calculating Your Taxes –Tax Brackets and Rates

D. Calculating Your Non-Refundable Credits

E. Clawback Zones F. Provincial Taxes

G. Taxation of Different Income Sources H. Maximizing Your Earnings: Employees, Students, Retirees, Investors and Proprietors.

A. Free money: Refundable tax credits

This is the first thing you need to know about: both the federal and provincial governments provide refundable tax credits to Canadian tax filers. Your eligibility for these credits depends on your net income level, not whether or not you pay taxes. That means you can have zero income and pay zero taxes but still receive refundable tax credits–simply by filing a tax return.

That’s right, free money! The income thresholds and amounts payable are indexed to inflation, and so they change every year. This is news you should know as it can make a big difference to your monthly cash flow.

Refundable tax credits are based on Net Income–Line 236 of your tax return and the return of your spouse or common-law partner–in other words, the combination of your two net incomes. This is one of the most important lines on the tax return because of its impact on the size of your credits. You can reduce your net income by making an RRSP contribution if you are eligible; or by claiming expenses like child care, moving expenses or carrying charges like your safety deposit box or tax deductible interest. Even deducting your union dues will make a difference.

The actual amount of certain credits you’ll receive is not obvious; they are not on the return at all because CRA does the calculations for you. You’ll be sent the money, but only if you file a return. But knowing the numbers is important, so you can identify the opportunity, maximize the amounts owing to you, and plan to save the money if you can for important goals, like an education, for example.

There are three important refundable tax credits from the Federal Government, described below; provincial governments may also provide similar income supports in some cases.

1. Working Income Tax Benefit. This credit was introduced to supplement the cost of working for those living on social assistance and going back to work. To receive it, you must complete Schedule 6 on your return, be at least age 19 or have a child, earn a minimum amount of net income, ($3,000 in most provinces; $4,750 in BC, $2,760 in Alberta and $6,000 in Nunavut, not including Universal Child Care Benefits and certain capital gains from stock options). If your net income is under certain clawback thresholds, you’ll receive a maximum credit of $931 in most provinces if you are single; $1,690 if you have a family. (Again, those amounts vary in BC, Alberta and Nunavut). An additional supplement is available to disabled taxpayers.

2. GST Credit. The GST Credit and Child Tax Benefit are based on a July to June “benefit year”. Income levels quoted in the chart below refer to your net income from the previous taxation year. You are eligible to receive the GST credit if you are at least 19 and a resident of Canada at the time the payment is due. So, you’ll want to file a tax return if you will be 19 by April 30, 2012 to start receiving it after your 19th birthday, as it is paid quarterly. A GST credit can also be claimed for your child, but specifically not for a foster child.