CRA issues Notices of Redetermination on CERB overpayments At the beginning of the pandemic in 2020, more than 8 million Canadians applied for and received the Canada Emergency Response Benefit (CERB). In applying for the CERB, recipients self-assessed their ...
Inflation rate for April reaches 6.8% The most recent release of Statistics Canada’s Consumer Price Survey shows that the overall rate of inflation reached 6.8% for the month of April 2022, as measured on a year-over-year basis.
The lar...
Application process for pandemic benefit programs continues Most of the pandemic benefit programs which the federal government has provided over the past two years came to an end on May 7, 2022.
Notwithstanding the ending of the programs, applications for bene...
Unemployment rate for April at new record low The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of April stood at 5.2%, down 0.1% from the rate recorded for March 2022.
Among demog...
First-time Home Buyers’ tax credit amount doubled The federal government provides a non-refundable tax credit to first time home buyers (defined as individuals who have not owned and lived in a home in the current year or any of the previous four yea...
Inflation rate reaches 30-year high The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of March 2022 (as measured on a year-over-year basis) was the highest such rate sin...
Pandemic benefit programs for individuals to end on May 7, 2022 Under current legislation, three major pandemic benefit programs for individuals are scheduled to expire on May 7, 2022. The Canada Recovery Sickness Benefit, the Canada Recovery Caregiving Benefit, a...
Home accessibility tax credit amount increased Since 2016, the federal government has provided a non-refundable tax credit for home renovation expenses undertaken to increase accessibility. Individuals eligible for this credit include those who ar...
CRA issues one-time grant payment to seniors In some instances, seniors who were eligible for the federal Guaranteed Income Supplement (GIS) and who received pandemic benefits during 2020 saw their GIS benefit amounts reduced or eliminated begin...
May 2, 2022 payment deadline for income taxes owed for 2021 All Canadian individual taxpayers are required to pay income tax balances owed for 2021 on or before Monday May 2, 2022. Where payment is not made on or before that date, interest will be levied on al...
Unemployment rate for March at record low The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of March stood at 5.3%. That rate is the lowest rate on record since compara...
Bank of Canada increases interest rates In its regularly scheduled interest rate announcement made on April 13, the Bank of Canada determined that an increase in interest rates was warranted. Following that increase, the Bank Rate stands at...
Budget 2022: Taxation of Vaping Products The proposed federal excise duty framework for vaping products would come into force on October 1, 2022. Retailers may continue to sell until January 1, 2023, unstamped products that are in inventory ...
Budget 2022: GST/HST on Assignment Sales by Individuals Budget 2022 proposes to amend the Excise Tax Act to make all assignment sales in respect of newly constructed or substantially renovated residential housing taxable for GST/HST purposes....
Budget 2022: Substantive CCPCs Budget 2022 proposes targeted amendments to the Income Tax Act to align the taxation of investment income earned and distributed by “substantive CCPCs” with the rules that currently apply to CC...
Budget 2022: Genuine Intergenerational Share Transfers Budget 2022 announces a consultation process for Canadians to share views as to how the existing rules could be modified to protect the integrity of the tax system while continuing to facilitate genu...
Budget 2022: Small Business Deduction In order to facilitate small business growth, Budget 2022 proposes to extend the range over which the business limit is reduced based on the combined taxable capital employed in Canada of the Canadia...
Budget 2022: Labour Mobility Deduction for Tradespeople Budget 2022 proposes to introduce a Labour Mobility Deduction for Tradespeople to recognize certain travel and relocation expenses of workers in the construction industry....
Budget 2022: Residential Property Flipping Rule Profits arising from dispositions of residential property (including a rental property) that was owned for less than 12 months would be deemed to be business income....
Budget 2022: Home Buyers’ Tax Credit Budget 2022 proposes to double the Home Buyers’ Tax Credit amount from $5,000 to $10,000, which would provide up to $1,500 in tax relief to eligible home buyers....
Budget 2022: Tax-Free First Home Savings Account Budget 2022 proposes to create the Tax-Free First Home Savings Account, a new registered account to help individuals save for their first home....
Increase to Old Age Security benefit for second quarter of 2022 The Old Age Security (OAS) benefit payable to most Canadians over the age of 65 is indexed to inflation, with the benefit being adjusted at the beginning of each calendar quarter.
For the second quart...
Tax tip issued for gig economy workers Many Canadian taxpayers work in the “gig” economy – holding down part-time, contract, or on-call positions or providing services to clients through online platforms, or some combination of those...
Unemployment rate for February drops to 5.5% The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of February dropped by a full percentage point, from 6.5% to 5.5%.
While emp...
Date announced for 2022-23 federal budget The Minister of Finance has announced that the federal budget for the upcoming 2022-23 fiscal year will be brought down on Thursday April 7, 2022, at around 4 p.m. The announcement of the budget date ...
Extended hours for individual tax enquiries line The Canada Revenue Agency provides an individual tax enquiries line where taxpayers can obtain general tax information, or information specific to their personal taxes.
While the individual tax enquir...
Reporting of income from digital transactions Millions of Canadians earn money each year from online or digital sales transactions, often through platforms like Etsy or eBay. The Canada Revenue Agency recently issued a Tax Tip, reminding taxpayer...
Prescribed interest rates for 2022 The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2022, as well as the rates that will apply for the purpose of cal...
Inflation rate for February reaches 5.7% The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation during the month of February 2022 reached 5.7% (as measured on a year-over-year basis), t...
CRA issues guide to claiming employment expenses for 2021 Canadian individual taxpayers can claim a deduction for a number of expenses which they incur in the course of their employment. For 2021, those deductible expenses can include a flat rate deduction f...
NETFILE hours of service The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2017, 2018, 2019, 2020 and 2021 tax years is available 21 hours each day. The hours of servi...
NETFILE service for filing of 2021 tax returns now open Canadian individual taxpayers can now file their income tax returns for the 2021 tax year using the Canada Revenue Agency’s (CRA) NETFILE tax service. That service, which will be available until Fri...
Bank of Canada increases interest rates In its regularly scheduled interest rate announcement made on March 2 the Bank of Canada, as expected, announced an increase to interest rates. Specifically, the Bank Rate has been increased from 0.50...
Federal individual tax credits for 2022 Dollar amounts on which individual non-refundable federal tax credits for 2022 are based, and the actual tax credit claimable, will be as follows:
...
Federal individual tax rates and brackets for 2022 The indexing factor for federal tax credits and brackets for 2022 is 2.4%. The following federal tax rates and brackets will be in effect for individuals for the 2022 tax year.
Income level ...
CRA issues Tax Tip for employees working from home During the 2021 tax year, many employees continued to work from home for pandemic-related reasons. Such employees may be eligible to claim a deduction for specified home office related expenses incurr...
Inflation rate for January 2022 reaches 5.1% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of January 2022 stood at 5.1%, as measured on a year-over-year basis. The last prev...
CRA issues guide to claiming medical expenses for 2021 Canadian individual taxpayers are entitled to claim a non-refundable tax credit for qualifying medical expenses incurred. Detailed information on the rules governing the types of expenses which qualif...
Unemployment rate up slightly in January The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate rose slightly during the month of January, from 6% to 6.5%. The change marked the first su...
CRA issues Tax Tip for students for 2021 return filings Post-secondary students filing a return for the 2021 tax year are entitled to claim a number of tax credits and deductions for education-related expenses which they incur, in addition to the credits a...
Inflation rate reaches 4.8% for December 2021 The January release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of December 2021 (as measured on a year-over-year basis) reached 4.8%.
While pr...
Bank of Canada maintains interest rates … for now In its regularly scheduled interest rate announcement made on January 26, the Bank of Canada indicated that, in its view, no change to current rates was needed. Consequently, the Bank Rate remains at ...
CRA issues Tax Tip for paper filers of 2021 tax return Taxpayers who filed their income tax return on paper last year will automatically receive the 2021 income tax package from the Canada Revenue Agency (CRA) by February 21, 2022.
The package taxpayers w...
CRA issues automobile expense deduction limits for 2022 The Canada Revenue Agency (CRA) has announced the automobile expense deduction limits which will apply during the 2022 taxation year. Owing to increases in the Consumer Price Index, most such limits h...
Income tax return forms for 2021 available on January 18, 2022 The Canada Revenue Agency (CRA) has announced that individual (T1) income tax return forms for the 2021 tax year will be available on the Agency’s website on January 18, 2022.
Such returns must be f...
Access to Canada Worker Lockdown Benefit expanded In October 2021, the federal government announced the creation of a new pandemic benefit, the Canada Worker Lockdown Benefit (CWLB), which was intended to be provided to workers affected by regional p...
Old Age Security rates for first quarter of 2022 The amount of Old Age Security (OAS) benefit paid to eligible Canadians is adjusted each quarter to take account of increases in the Consumer Price Index.
Based on recent increases to the Consumer Pri...
Prescribed interest rates for 2022 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2022, as well as the rates that will apply for the purpose ...
Canada Revenue Agency issues TD1 Form for 2022 The Canada Revenue Agency (CRA) has issued the TD1 form to be used by all Canadian resident employees for the 2022 tax year. On the TD1 form, the employee indicates the federal personal tax credit amo...
December 31 deadline for final RRSP contributions Canadian taxpayers who have a registered retirement savings plan (RRSP) must collapse that RRSP by the end of the year in which the taxpayer turns 71.
Such taxpayers are entitled to make a final RRSP ...
Small Business Air Quality Improvement Tax Credit introduced As part of the Economic and Fiscal Update, the federal government announced that small businesses would be provided with a refundable Small Businesses Air Quality Improvement Tax Credit. That credit, ...
Changes to home office expense deduction extended through 2022 As part of pandemic relief measures, changes were made to the existing home office expense deduction for employees. Those changes, which were for the 2020 tax year only, allowed employees to use a fla...
Final individual tax instalment for 2021 payable by December 15 Individual taxpayers who pay income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment for the 2021 tax year must be mad...
Economic and Fiscal Update to be delivered on December 14, 2021 The 2021 Economic and Fiscal Update will be delivered by the Minister of Finance on Tuesday, December 14 at around 4 p.m.
The update is expected to include information on the current state of the Cana...
Prescribed interest leasing rate for January 2022 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Taxpayer relief for Canadians affected by extreme weather events The Canada Revenue Agency (CRA) has posted a Tax Tip on its website reminding individuals who have been affected by the recent extreme weather events of the availability of the Taxpayer Relief Program...
Canada Revenue Agency issues income tax guide for students for 2021 The Canada Revenue Agency (CRA) publishes a guide for post-secondary students which outlines the tax treatment of the types of income and expenses (like scholarship income and tuition expenses) which ...
Inflation rate for October reaches 4.7% The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows that during the month of October inflation rose by 4.7%, as measured on a year-over-year basis. That increase marked t...
Unemployment rate down slightly in October The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate declined slightly during the month of October, from 6.9% to 6.7%.
Employment held steady f...
Employment insurance premium rates for 2022 The federal government has announced the premium rates and amounts which will apply for purposes of the Employment Insurance program during the 2022 calendar year.
For 2022, maximum insurable earnings...
Prescribed leasing interest rate for December 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Canada Pension Plan contribution amounts for 2022 The Canada Revenue Agency (CRA) has released the contribution rates and amounts which will apply with respect to the Canada Pension Plan (CPP) during the 2022 calendar year.
For 2022, the employer and...
Bank of Canada maintains interest rate at current levels In its regularly scheduled interest rate announcement made on October 27, the Bank of Canada indicated that, in its view, no change was required to current interest rates. Accordingly, the Bank Rate r...
Inflation rate for September up by 4.4% The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation, as measured on a year-over-year basis, rose by 4.4% during the month of September. The compa...
Prescribed leasing rate for November 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Enhanced security measures introduced for online representatives The Canada Revenue Agency (CRA) has announced that new security measures have been made available with respect to the authorization of online representatives by taxpayers. Generally, representatives a...
Pandemic benefit programs ending October 23, 2021 The federal government currently provides a range of pandemic benefit programs, for both individuals and businesses, and a number of those programs are scheduled to end on Saturday October 23, 2021. H...
Employment returns to pre-pandemic levels in September The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate declined during the month of September, by 0.2 percentage points. The September unemployme...
Employment Insurance premium rates for 2022 released The federal government has announced the premium rates and amounts which will apply for purposes of Employment Insurance during the 2022 calendar year.
The contribution rates for both employers and em...
Old Age Security rates for fourth quarter of 2021 The amount of Old Age Security (OAS) benefit paid to eligible Canadians is adjusted each quarter to take account of increases in the Consumer Price Index.
Based on recent increases to the CPI, the fed...
Final payment of CCB young child supplement to be issued in October In the 2020 Fall Economic Statement, the federal government announced that, as part of its pandemic relief measures, an additional amount would be paid during 2021 to qualifying families who were elig...
Prescribed interest rates for 2021 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for 2021, as well as the rates that will apply for the purpose of calculating employ...
Pandemic relief programs ending in October 2021 A number of pandemic relief benefit programs provided to individual Canadians are currently scheduled to end as of October 23, 2021. Those programs are as follows:
Canada Recovery Benefit
Canada Recov...
Inflation rate up sharply in August The latest release of Statistics Canada’s Consumer Price Index shows that the rate of inflation, as measured on a year-over-year basis, rose by 4.1% during the month of August, as compared to the 3....
Unemployment rate down slightly in August The most recent release of Statistics Canada’s Labour Force Survey shows a decline in the overall unemployment rate during the month of August. During that month, the rate declined by 0.4%, to 7.1%....
Prescribed leasing rate for October 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Upcoming deadline for third instalment payment of 2021 Individual taxpayers who pay income tax for the year through instalment payments do so by four prescribed deadlines each year. The third of those deadlines falls on Wednesday September 15, 2021.
Taxpa...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on September 8, the Bank of Canada (the “Bank”) indicated that, in its view, no change to current rates was needed. Accordingly, the Bank...
CRA issues guide to GST/HST credit for 2021/22 The benefit year for many federal tax credits, including the GST/HST tax credit, runs from July 1 to June 30 of the following year. Each year, credit amounts change, as do the income thresholds which ...
CRA issues warning on Canada Emergency Wage Subsidy tax scams In July of this year, the federal government announced that the Canada Emergency Wage Subsidy (CEWS) program would be extended to be available to employers until October 2021.
The Canada Revenue Agenc...
Federal government launches consultation process on luxury tax This year’s federal Budget included a proposal for a “luxury tax” which would apply, at varying rates, to sales of specified goods over a prescribed price threshold. The proposal indicated that ...
CRA issues guidelines on qualifying SR&ED activities The Canadian tax system provides credits and incentives for taxpayers who carry out qualifying scientific research and experimental development (SR&ED) work. When claims are made for such credit a...
Inflation rate increases in July 2021 The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of July, as measured on a year-over-year basis, stood at 3.7%. The comparable rate ...
Prescribed leasing rate for September 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Upcoming deadline for payment of individual income tax instalment Individual taxpayers who pay income tax by instalments must make the third instalment payment of the year on or before Wednesday September 15, 2021.
Such taxpayers should receive an Instalment Reminde...
Inflation rate for June at 3.1% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of June, as measured on a year-over-year basis, reached 3.1%. That rate was slightl...
Federal government extends availability period for pandemic benefits The federal government has announced that a number of pandemic relief benefit programs, for both businesses and individuals, have been extended. The changes announced are as follows.
The eligibility p...
Eligibility criteria for Canada Workers Benefit expanded The federal government administers the Canada Workers Benefit (CWB), a refundable tax credit which supplements income amounts for lower-income working Canadians. The annual benefit amount is $1,400 fo...
Prescribed leasing interest rate for August 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
One-time Old Age Security supplement to be paid in mid-August As announced in this year’s federal Budget, some recipients of Old Age Security will receive a one-time supplement, to be paid in August 2021.
During that month, OAS recipients who were born on or b...
Canada Child Benefit increase effective July 2021 The current benefit year for the Canada Child Benefit runs from July 1, 2021 to June 30, 2022. The federal government recently announced that Child Tax Benefit amounts for this benefit year have been ...
Unemployment rate for June 2021 down to 7.8% The most recent release of Statistics Canada’s Labour Force Survey shows a rebound in employment, as pandemic-related public health restrictions were eased in several provinces.
For the month of Jun...
Bank of Canada leaves interest rates at current levels In its regularly scheduled interest rate announcement made on July 14, the Bank of Canada indicated that, in its view, no change to current rates was required. Accordingly, the Bank Rate remains at 0....
Old Age Security benefit to increase for third quarter of 2021 The Old Age Security benefit administered by the federal government is adjusted quarterly to reflect the rate of inflation.
The federal government has announced that the maximum basic OAS benefit paya...
Prescribed interest rates for 2021 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first three quarters of 2021, as well as the rates that will apply for the p...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on June 9, 2021, the Bank of Canada determined that, in its view, no change to current rates was needed. Accordingly, the Bank rate remains a...
Prescribed interest rates for 2021 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first three quarters of 2021, as well as the rates that will apply for the p...
Prescribed leasing interest rate for July 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
June 30, 2021 filing deadline for calendar-year companies Canadian companies are required to file their federal income tax returns within 6 months after their fiscal year end. Consequently, companies which had a calendar year end on December 31, 2020 must fi...
Unemployment rate for May up slightly While there was little change in the overall unemployment rate for the month of May, employment did fall by 68,000 positions, most of those in part-time work.
The overall unemployment rate for the mon...
Inflation rate for May up by 3.6% The most recent release of Statistics Canada’s Consumer Price Index shows an increase of 3.6% increase in the rate of inflation for the month of May, as measured on a year-over-year basis. The comp...
Upcoming 2021 individual income tax instalment payment deadline For individuals who pay income tax through quarterly instalments, the second instalment payment deadline for the year is Tuesday June 15, 2021.
Information on the instalment payment system, including ...
Prescribed leasing interest rate for June 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
CRA issues Tax Tip on how to change a tax return The Canada Revenue Agency (CRA) has posted a Tax Tip on its website outlining the several methods taxpayers can use to make a change, or correct an error, on an already-filed return.
Requests for chan...
Inflation rate for April up by 3.4% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of April 2021 was up by 3.4%, as measured on a year-over-year basis.
Statistics Can...
CRA issues warning on TFSA “maximizer” tax scheme The Canada Revenue Agency (CRA) has issued a warning to taxpayers with respect to a tax scheme currently being promoted, typically to homeowners who have significant equity in their homes and substant...
CRA issues updated application form for Taxpayer Relief program Taxpayers who are unable to file their returns or make payment of taxes owed on a timely basis for reasons outside their control (including financial hardship) can apply, under the Taxpayer Relief Pro...
April unemployment rate increases to 8.1% The most recent release of Statistics Canada’s Labour Force Survey shows an increase in the rate of unemployment during the month of April 2021. That rate, as measured on a year-over-year basis, ros...
Inflation up by 2.2% for March 2021 The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of March 2021 was 2.2%, as measured on a year-over-year basis.
While the monthly in...
Prescribed interest rate for leasing May 2021 The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on April 21, the Bank of Canada indicated that, in its view, no change to current rates was warranted. Accordingly, the Bank Rate remains at ...
Payments of 2020 individual income tax due Friday April 30, 2021 The deadline for payment of all individual income tax amounts owed for the 2020 tax year is Friday, April 30, 2021. For most individuals (other than self-employed taxpayers and their spouses), April 3...
Budget 2021: Anti-avoidance rules and taxpayer disclosure The Budget includes proposals to address perceived anti-avoidance activity and failures by taxpayers to comply with transaction reporting rules.
To address the issue of failure to report, the governme...
Budget 2021: Film and television production tax credits The federal government provides two tax credit programs for the film and television industry. The Canadian Film or Video Production Tax Credit (CPTC) provides a 25% refundable tax credit on qualified ...
Budget 2021: Business pandemic support programs to be extended In the Budget, the federal government announced that the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy, and the Lockdown Support programs, which are currently scheduled to expire on...
Budget 2021: Canada Recovery Hiring Program to be introduced The federal Budget includes a proposal for a Canada Recovery Hiring Program. That program will provide eligible employers with a subsidy of up to 50% on the incremental remuneration paid to eligible e...
Budget 2021: Electronic Filing and Payment Requirements Current rules provide that tax preparers and filers of information returns who file more than a prescribed number of returns each year must file such returns electronically.
Those rules will be amende...
Budget 2021: Electronic communication with the CRA Changes are proposed to the rules to increase the ability of the Canada Revenue Agency (CRA) to communicate with taxpayers electronically, without the taxpayer having to authorize the CRA to do so.
Ge...
Budget 2021: Changes to rules affecting registered charities The Canada Revenue Agency has the authority to revoke the charitable registration status of an organization where that organization fails to fulfill its legal obligations. The rules governing such rev...
Budget 2021: Tax treatment of pandemic benefit repayments Millions of Canadian taxpayers received pandemic benefits during the 2020 taxation year. While most such recipients were entitled to those benefits, there were instances in which the benefits were pai...
Budget 2021: Tax treatment of postdoctoral fellowship income Postdoctoral fellows are generally not, for purposes of the income tax system, considered to be students. Consequently, postdoctoral fellowship income does not qualify for the exemption generally prov...
Budget 2021: Northern residents deductions Canadians who live in prescribed northern areas of Canada for at least six consecutive months in a year are eligible for the Northern residents deduction. That deduction has both a residency component...
Budget 2021: Canada Workers’ Benefit increased The Canada Workers’ Benefit (CWB) is a non-taxable refundable tax credit that supplements the earnings of low-income and medium-income workers. The CWB, which is generally available to workers who e...
Budget 2021: Eligibility criteria for disability tax credit expanded The federal government provides qualifying individuals with a disability tax credit (DTC) which reduces federal tax otherwise payable. For 2021, the value of the DTC is $1,299.
To qualify for the DTC,...
CRA provides guidance on changes to the 2020 tax return The tax return completed by individual Canadians changes from one year to the next, as tax credits or deductions are introduced, eliminated, or changed, or reporting requirements are altered.
The Cana...
Prescribed interest rates for 2021 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first half of 2021, as well as the rates that will apply for the purpose of ...
Inflation rate for February up slightly The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation for the month of February 2021. That rate stood at 1.1%, as compared to the rate ...
Federal Budget 2021-22 to be brought down in April The Minister of Finance has announced that the federal Budget for the upcoming 2021-22 fiscal year will be delivered on Monday April 19, 2021. This year’s Budget will be the first one delivered sinc...
Canada Revenue Agency locks down individual online tax accounts Over the past month, the Canada Revenue Agency (CRA) identified a large number of individual taxpayer online accounts for which user IDs and passwords had been obtained by unauthorized third parties. ...
Employment increases by 259,000 positions in February The most recent release of Statistics Canada’s Labour Force Survey shows a significant increase in employment during the month of February. During that month, employment rose by 259,000 jobs, and th...
Bank of Canada leaves interest rates unchanged As expected, the Bank of Canada announced on March 10 that no changes would be made to current interest rates. Accordingly, the Bank Rate remains at 0.5%.
In the press release announcing its decision,...
Inflation rate for January at 1% The most recent release of Statistics Canada’s Consumer Price Survey shows a slight increase in the rate of inflation for January 2021. The inflation rate for that month, as measured on a year-over-...
NETFILE service hours of availability The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2017, 2018, 2019, and 2020 tax years is now available 21 hours a day, 7 days a week. The ser...
CRA issues 2020 guide for self-employed taxpayers The Canada Revenue Agency (CRA) has issued the guide to be used by taxpayers who are reporting business or professional income, commission income, and income from farming and fishing received during 2...
CRA help line to be available Saturdays during tax filing season The Canada Revenue Agency (CRA) has announced that, beginning February 27, 2021, its Individual Tax Enquiries line will be available on Saturdays, from 9 a.m. to 5 p.m. That service is also available ...
Prescribed interest leasing rate for March The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Unemployment rate increases to 9.4% in January The most recent release of Statistics Canada’s Labour Force Survey shows a significant decline in employment during the month of January, and a corresponding increase in the overall unemployment rat...
Consultation process launched for 2021-22 federal Budget The federal government has launched the consultation process leading to the release of the 2021-22 federal Budget.
This year, there are three components to the consultation process. The government wil...
Prescribed leasing interest rate for February The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on January 20 the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 0....
CRA issues guide to employment expense deductions for 2020 The Canada Revenue Agency (CRA) has issued an updated version of Guide T4044, Employment Expenses 2020, which outlines the tax treatment of various employment expenses, and will be used by taxpayers i...
Inflation rate up in December 2020 The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate inflation rose by 0.7% during the month of December 2020, as measured on a year-over-year basis. The rate for...
CRA announces automobile benefit and deduction amounts for 2021 The Canada Revenue Agency (CRA) has released the automobile expense deduction limits and benefit rates which will apply during the 2021 taxation year.
Most of the rates and limits which applied during...
Unemployment rate up slightly in December The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of December 2020 increased to 8.6%. The comparable rate for the month of Nov...
Prescribed interest rates for 2021 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2021, as well as the rates that will apply for the purpose ...
NETFILE service for 2019 returns open until January 22, 2021 The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2016, 2017, 2018, and 2019 taxation years will be available until Friday, January 22, 2021. ...
CRA issues 2020 income tax guide for students Post-secondary students in Canada are eligible for a range of tax credits and deductions, including a tuition tax credit, deductions for moving expenses, and a claim for qualifying student loan intere...
CRA announces new flat rate method for home office expense claims The Canada Revenue Agency (CRA) has announced that a new temporary home office tax credit may be claimable by qualifying individuals who worked from home during 2020.
Taxpayers are eligible to use thi...
Upcoming changes to CRA administrative policy on representatives The Canada Revenue Agency (CRA) permits taxpayers to designate another person, firm, or business to communicate with the CRA on the taxpayer’s behalf, where a written authorization has been provided...
December 31 deadline for tax relief applications Taxpayers may apply to the Minister of National Revenue for administrative relief from interest and penalty charges imposed or, in some cases, for permission to late-file tax elections.
In order to be...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on December 9, the Bank of Canada announced that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 0.5...
Unemployment rate down slightly in November The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment declined by 0.4% during the month of November. The unemployment rate for the month was 8.5%.
Fu...
Prescribed interest leasing rate for December The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Federal government updates deficit projection for 2020-21 On November 30, the Minister of Finance released the Fall Economic Statement, which included updated deficit projections for the current and future fiscal years.
The deficit is now projected to reach ...
Wage subsidy program extended to June 2021 The federal government has announced that the program providing a wage subsidy to eligible businesses experiencing a pandemic-related revenue loss has been extended to be available until June 2021.
Th...
Date announced for 2020 Fall Economic Statement The federal government has announced that its Fall Economic Statement for the 2020-21 fiscal year will be released on Monday November 30, 2020. The press release announcing the date and time of the St...
Inflation rate for October up slightly The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate of inflation for the month of October rose by 0.7%, as measured on a year-over-year basis. The comparable inc...
Employment Insurance premium rates for 2021 announced The federal government has released the premium rates and amounts which will apply in 2021 for purposes of the Employment Insurance (EI) program.
For 2021, the EI premium rate will be 1.58% and maximu...
CRA announces increases in retirement savings contribution limits The Canada Revenue Agency (CRA) has announced upcoming changes in the allowable contribution limits for a range of retirement savings programs.
For registered pension plans, the 2021 money purchase l...
Unemployment rate for October at 8.9% The most recent release of Statistics Canada’s Labour Force Survey shows that the overall rate of unemployment stood at 8.9% for the month of October.
While the unemployment rate for the month was l...
CRA issues updated Employer’s Guide to Taxable Benefits The tax treatment of non-monetary benefits provided by employers to their employees can vary widely. Some such benefits must be included in the employee’s taxable income for the year, while others a...
Prescribed interest leasing rate for November The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Bank of Canada leaves interest rates at current levels In its October 28 announcement, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate remains at 0.5%.
The press release announcing...
Bank of Canada releases interest rate announcement schedule for 2021 The Bank of Canada has released its schedule for policy interest rate announcements to be made during the 2021 calendar year, and that schedule is as follows:
Wednesday, January 20
Wednesday, March 10...
Inflation rate up slightly in September The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation rose 0.5% on a year-over-year basis in September, up from a 0.1% increase in August.
While pric...
Application process for Canada Recovery Benefit now open In September, the Canada Emergency Response Benefit program came to an end, and three new programs to provide financial assistance to individuals impacted by the pandemic were launched.
One of those p...
Unemployment rate down to 9% in September The most recent release of Statistics Canada’s Labour Force Survey shows that Canada’s overall unemployment rate declined by 1.2% during the month of September. For the month, that rate stood at 9...
CRA issues warning of tax scam involving debt write-offs The Canada Revenue Agency (CRA) has issued a warning to taxpayers with respect to a tax scam currently operating, which involves claims for bad debt write-offs.
While bad debts can be written off for ...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for 2020, as well as the rates that will apply for the purpose of calculating employ...
Old Age Security benefit increase for fourth quarter of 2020 The Old Age Security benefit received by Canadians over the age of 65 is indexed quarterly to changes in the Consumer Price Index.
The federal government has announced that the basic OAS benefit of $6...
Prescribed leasing interest rate for October The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Individual tax balances for 2019 tax year due by September 30 Earlier this year, the Canada Revenue Agency (CRA) announced that the deadline for payment of individual income tax balances for the 2019 tax year, which is usually April 30, was being extended to Wed...
Unemployment rate decreases to 10.2% for August The September release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of August stood at 10.2%. That rate represented a decrease of 0.7% from the ra...
Increase announced to non-taxable meal allowance rate The federal government has announced an increase in the amount of any overtime meal allowance, or meal portion of a travel allowance, that employers can provide to employees on a non-taxable basis. Th...
CRA to contact taxpayers affected by cyberattack Earlier this month, a cyberattack on the Canada Revenue Agency (CRA) and other agencies of the federal government compromised the personal tax and financial information of approximately 5500 taxpayers...
Inflation rate for July drops to 0.1% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of July, as measured on a year-over-year basis, stood at 0.1%. The comparable rate ...
Prescribed leasing interest rate for September 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Unemployment rate for July down to 10.9% The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for July was 10.9%. The change means that the unemployment rate has fallen by 1.4 percentage poi...
Extension announced for September individual instalment payments Individual taxpayers who pay income tax by instalment are required to make four such instalment payments each year. The usual deadlines for such payments are the 15th day of March, June, September, an...
Online filing option where paper return not yet assessed by CRA The Canada Revenue Agency (CRA) has posted a notice on its website indicating that it is experiencing delays in the processing of paper-filed individual income tax returns for the 2019 taxation year.
...
CRA provides interest waiver period on tax amounts owed The Canada Revenue Agency (CRA) has announced that an interest waiver period will be provided to individual taxpayers with respect to income taxes owed.
That waiver period will run from April 1 to Sep...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on July 15, the Bank of Canada indicated that, in its view, no change to current interest rates was required. Accordingly, the Bank Rate rema...
Prescribed leasing interest rate for August 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Federal emergency wage subsidy to be available until December Canadian employers whose businesses have been affected by the pandemic may be eligible for a federal government wage subsidy – the Canada Emergency Wage Subsidy (CEWS).
The CEWS, which pays the empl...
Unemployment rate down slightly in June The most recent release of Statistics Canada’s Labour Force Survey shows a slight decline in the rate of unemployment during the month of June.
The unemployment rate for June stood at 12.3%, a decli...
Federal government projects $343 billion current-year deficit On July 8, the federal government provided an update of its fiscal position for the current (2020-21) fiscal year, taking in account expenditures made in connection with the pandemic.
That “Economic...
Supplemental OAS payment issued during first week of July Earlier this year, the federal government announced that, as part of its pandemic relief measures, recipients of Old Age Security would receive an additional one-time payment. Such payment is intended...
NETFILE service for 2019 returns still available The Canada Revenue Agency (CRA) has issued a Tax Tip reminding Canadians that its online filing services for the filing of individual income tax returns for the 2019 tax year are still open.
Such indi...
No change to basic Old Age Security benefit for third quarter 2020 The Old Age Security benefit received by Canadians over the age of 65 is indexed quarterly to changes in the Consumer Price Index.
The federal government has announced that, as the rate of inflation d...
Prescribed leasing interest rate for July 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first three quarters of 2020, as well as the rates that will apply for the p...
Canada Emergency Response Benefit program extended The federal government has announced that the Canada Emergency Response Benefit (CERB) program has been extended to be available for a further eight weeks in some circumstances.
As originally designed...
Inflation rate down by 0.4% for May The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate of inflation fell by 0.4% during the month of May, as measured on a year-over-year basis.
Prices were up in f...
Prescribed interest rate for leasing for June 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Unemployment rate up slightly in May The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate rose slightly during the month of May, from 13% to 13.7%.
The StatsCan analysis indicates that une...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on June 3 the Bank of Canada, as anticipated. made no change to current rates. Accordingly, the Bank Rate remains at 0.5%.
In its announcemen...
June 15 return filing deadline for self-employed taxpayers Self-employed Canadians and their spouses must file an individual income tax return for the 2019 tax year on or before June 15, 2020.
As part of the federal government’s pandemic response plan, howe...
June 15 individual income tax instalment due date deferred Individual Canadians who pay income tax by instalments would normally be required to make the second instalment payment for this year on June 15, 2020.
The Canada Revenue Agency (CRA) has indicated, h...
CRA extends filing and payment deadlines for corporations and trusts The Canada Revenue Agency (CRA) has announced that the deadline for filing of T2 returns by corporations and T3 returns by trusts has been extended.
That announcement provides that all businesses and ...
Free tax return preparation clinics go online Each year community organizations across Canada operate a number of tax clinics at which individual income tax returns are prepared and filed free of charge to the taxpayer. Due to concerns surroundin...
CRA extends federal benefit eligibility period The benefit year for many federal benefits, like the Canada Child Benefit and the Goods and Services Tax Credit runs from July 1 to June 30. Eligibility for and the amount of such benefits are based, ...
Repaying the Canada Emergency Response Benefit The Canada Revenue Agency has issued a reminder to Canadians that there are circumstances in which the Canada Emergency Response Benefit (CERB) must be repaid.
In particular, individuals who return to...
CRA issues warning of Canada Emergency Response Benefit scam The Canada Revenue Agency (CRA) has issued an alert on its website warning Canadians of a scam operating with respect to the Canada Emergency Response Benefit (CERB). That Benefit, for which more than...
Online applications available for Canada Emergency Wage Subsidy As part of its pandemic response, the federal government is providing eligible employers with a partial wage subsidy through the Canada Emergency Wage Subsidy (CEWS) program. The CEWS program provides...
Prescribed leasing interest rate for May 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2020, as well as the rates that will apply for the purpose ...
Inflation rate down sharply for March The April release of Statistics Canada’s Consumer Price Index shows a sharp decline in the rate of inflation for the month of March. That rate stood at 0.9%, as measured on a year-over-year basis. T...
Significant increase in unemployment rate during March The most recent release of Statistics Canada’s Labour Force Survey shows a significant increase in the rate of unemployment during the month of March.
The April release of the Labour Force Survey, w...
Canada Student Loan repayments suspended until September 30, 2020 The federal government has announced that required repayments of Canada Student Loans will be suspended until September 30th, 2020.
Where payments are usually made by pre-authorized debit, such paymen...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on April 15, the Bank of Canada indicated that, in its view, no change to current interest rates was required. Accordingly, the Bank Rate rem...
Wage subsidy program to be provided to Canadian employers The federal government will be providing a wage subsidy program to eligible employers who have experienced a recent reduction in revenues of 30% or more. That program—the Canada Emergency Wage Subsi...
Application process for Canada Emergency Response Benefit now open As of April 6, 2020, Canadians can apply for the federal Canada Emergency Response Benefit (CERB), which provides eligible individuals with $500 per week for a maximum of 16 weeks.
The benefit is gene...
Federal government defers remittance of HST/GST payments The federal government will be providing businesses with an extension with respect to remittance deadlines related to goods and services tax (GST) and harmonized sales tax (HST).
The deferral will app...
Bank of Canada announces further reduction in interest rates In an unscheduled announcement made on March 27, the Bank of Canada lowered interest rates for the third time this month.
In that announcement, the Bank reduced current rates by one-half percentage po...
One-time increase in Canada Child Benefit to be provided The federal government has announced that, for the current benefit year only, the amount of Canada Child Benefit will be increased by a one-time payment of $300 per child.
The $300 additional benefit ...
Individual tax filing and payment deadlines extended The deadline for filing of most 2019 individual income tax returns, as well as payment of any balance of tax owed for the 2019 taxation year by individual taxpayers would usually be April 30, 2020. Th...
Bank of Canada reduces interest rates Citing the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent drop in oil prices, the Bank of Canada has announced a further reduction in interest rates.
The unsch...
CRA issues Tax Tip for property buyers and sellers Canadian taxpayers who buy or sell a property during the year may be subject to requirements to report that transaction on their annual return and, in some cases, to pay tax on sale proceeds.
The CRA ...
Little change in unemployment rate for February The most recent release of Statistics Canada’s Labour Force Survey shows little change in the overall unemployment rate during the month of February. That rate rose by 0.1%, to 5.6%.
During the mont...
Extended hours for CRA individual tax enquiries line The Canada Revenue Agency’s individual income tax enquiries telephone service will be available for extended hours during tax filing season. That enquiries service, which can be reached at 1-800-959...
Bank of Canada cuts interest rates In its regularly scheduled interest rate announcement made on March 4 the Bank of Canada indicated that, in its view, a reduction to current interest rates was required. Accordingly, the bank rate was...
Upcoming deadline for 2019 RRSP contributions The Canada Revenue Agency (CRA) has announced that contributions to a registered retirement savings plan (RRSP), in order to be deducted on the return for 2019, must be made on or before Monday March ...
Increase in inflation rate for January 2020 The most recent release of Statistics Canada’s Consumer Price Index shows an increase in the rate of inflation for the month of January. That rate stood at 2.4%, as measured on a year-over-year basi...
Unemployment rate down slightly for January 2020 The most recent release of Statistics Canada’s Labour Force Survey shows that that unemployment rate dropped slightly during the month of January, from 5.6% to 5.5%.
During that month, employment in...
Digital news subscription tax credit now available In the 2019 Budget, the federal government introduced a new tax credit for digital news subscription costs incurred by individuals.
That tax credit is available starting in the 2020 tax year. Individu...
Digital news subscription tax credit now available In the 2019 Budget, the federal government introduced a new tax credit for digital news subscription costs incurred by individuals.
That tax credit is available starting in the 2020 tax year. Individu...
CRA issues updated guide to students and income tax The Canada Revenue Agency (CRA) publishes a guide for post-secondary students which outlines the rules governing typical tax situations for such students. Those rules include the tax treatment of tuit...
NETFILE service for 2019 returns available February 24, 2020 The Canada Revenue Agency (CRA) has announced that the NETFILE service for online filing of individual income tax returns for the 2019 tax year will be available beginning Monday, February 24, 2020.
M...
CRA issues 2019 Individual Income Tax Return and Guide The Canada Revenue Agency (CRA) has released the Individual Income Tax Return and Guide for all provinces and territories for the 2019 tax year, and those forms and guides are posted on its website at...
Bank of Canada leaves interest rate unchanged In its regularly scheduled interest rate announcement made on January 22, 2020, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remain...
CRA announces automobile expense deduction limits for 2020 The Canada Revenue Agency has announced the rates and limits which will apply for purposes of automobile-related benefits and deductions in 2020.
Most such rates and limits are unchanged, as follows:
...
OAS payment rates for first quarter of 2020 The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the first quarter (January 1 to March 31) of 2020. OAS payments are indexed quarterly to c...
Unemployment rate down for December 2019 The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 35,000 jobs during the month of December and that the overall unemployment rate fell by 0.3%, to...
Personal tax credit amounts increased The federal government has announced that the basic personal tax credit, the spousal credit, and the eligible dependant credit amounts will increase, in four stages, from $12,298 to $15,000.
The first...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2020, as well as the rates that will apply for the purpose ...
Prescribed leasing interest rate for January 2020 The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
Climate action incentive payment amounts for 2020 The federal government has announced the amounts which will be paid under the climate action incentive program during 2020. Such amounts are claimed when filing the individual income tax return for 20...
NETFILE service for prior years available until January 24, 2020 Taxpayers who have not yet filed their individual income tax returns for 2018 (or the three prior years) can file those returns on NETFILE until Friday, January 24, 2020. Until that date, the Canada R...
Economic and Fiscal Update projects increased current year deficit The 2019 Economic and Fiscal Update released on December 16 by the Minister of Finance shows a significant increase in the projected deficit for the current fiscal year.
In the 2019-20 Budget announce...
December 16 deadline for final instalment payment for 2019 Canadians who pay income tax by instalments are required to pay the fourth and final instalment payment of 2019 on or before Monday December 16, 2019.
Taxpayers subject to the instalment payment requi...
December 31 deadline for taxpayer relief applications for 2009 Under the federal government’s Taxpayer Relief Program, the Minister of National Revenue can provide relief to taxpayers from interest or penalty charges which have been assessed.
Such taxpayer reli...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on December 4, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2...
Indexing adjustment for 2020 released by CRA The Canada Revenue Agency has announced that personal income tax brackets and credit amounts for the 2020 taxation year will increase by 1.9%.
Each year, such individual income tax brackets and cred...
Inflation rate for October 2019 unchanged The most recent release of Statistics Canada’s Consumer Price Index indicates that there was no change in the rate of inflation recorded for the month of October. That rate stood at 1.9%, as measure...
CRA issues Payroll Deduction Formula guide for 2020 The Canada Revenue Agency has issued the 2020 version of Guide T4127, Payroll Deduction Formulas, which is intended for use by payroll software providers or companies which develop their own in-house ...
Upcoming CRA webinar on payroll On Wednesday November 27, the Canada Revenue Agency (CRA) will be hosting a webinar on payroll requirements for Canadian employers.
The webinar, which will start at 1:00 p.m. EST, is free of charge fo...
CRA issues 2019 guide to students and income tax The Canada Revenue Agency (CRA) has updated and re-issued its tax guide for post-secondary students.
That guide (P105, Students and Income Tax) reviews the tax treatment of common deductions and credi...
Employment Insurance contribution rates for 2020 The federal government has announced the Employment Insurance (EI) premium rates which will be levied during 2020.
For 2020, maximum insurable earnings for the year will be $54,200. The premium rate f...
No change in unemployment rate for October The most recent release of Statistics Canada’s Labour Force Survey shows that there was no change in the overall unemployment rate for the month of October 2019, with that rate remaining at 5.5%.
Am...
CRA issues employer guide to payroll deductions for 2020 The Canada Revenue Agency has issued its Employer’s Guide: Payroll Deductions and Remittances for 2020 (T4001(E)). That guide provides employers with information on the deductions which must be made...
Canada Pension Plan contribution rates for 2020 released The federal government has announced the contribution rates and amounts and maximum pensionable earnings which will apply for purposes of the Canada Pension Plan in 2020.
Employee and employer contrib...
CRA issues 2019 employer guide to taxable benefits Employers are required, by the end of February 2020, to issue T4 slips for their employees for the 2019 taxation year. Those T4s will summarize the amount of remuneration received by the employee duri...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on October 30, 2019, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate will r...
CPP contribution rate to increase January 1, 2020 As previously announced, changes are to be made to the Canada Pension Plan over the next 5 years, with the goal of increasing the amount of CPP retirement benefits available to contributors.
The next ...
Online retirement income calculator available The federal government provides a detailed online retirement income calculator which can be used by taxpayers planning retirement.
The online calculator allows users to input income amounts from vario...
No change in inflation rate for September The overall inflation rate was unchanged for the month of September, with that rate matching the 1.9% year-over-year increase posted for the month of August 2019.
The greatest contributor to the infla...
Unemployment rate down in September The most recent release of Statistics Canada’s Labour Force Survey shows a sharp increase in job creation for the month of September. During that month employment rose by 54,000, mainly in full-time...
Prescribed interest rate for leasing for November The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
2020 Employment Insurance premium rates announced The federal government has announced the Employment Insurance premium rates and amounts which will be levied during the 2020 calendar year.
For 2020, the Employment Insurance premium rate is decreased...
OAS payment rates for fourth quarter of 2019 The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the fourth quarter (October 1 to December 31) of 2019. OAS payments are indexed quarterly ...
Prescribed interest rates for 2019 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for 2019, as well as the rates that will apply for the purpose of calculating emp...
CRA updates and re-issues publication on tax audits The Canada Revenue Agency (CRA) has updated and re-issued its publication on the conduct of tax audits.
The updated publication (RC4188E)) outlines the process by which the CRA chooses a file for audi...
Prescribed interest rate for leasing for October The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
Rate of inflation at 1.9% for August The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August stood at 1.9%, as measured on a year-over-year basis.
The inflation rate ...
Federal government releases financial results for 2018-19 Finance Canada has released the Annual Financial Report of the Government of Canada for 2018-19, which provides an overview of the federal government’s financial results for the 2018-19 fiscal year ...
CRA issues tax guidance for international students Each September thousands of international students move to (or return to) Canada to attend Canadian secondary or post-secondary educational institutions.
Depending on their residency status, those stu...
Unemployment rate unchanged in August The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 81,000 positions during the month of August 2019. Notwithstanding that increase, the unemploymen...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on September 4, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at ...
Individual income tax instalment payment due September 16 Individual taxpayers who make quarterly instalment payments of tax must make the third such instalment payment for the year on or before September 15. As that date falls on a Sunday this year, payment...
Bank of Canada announces 2020 interest rate announcement schedule The Bank of Canada has released a listing of the eight dates on which it will make regularly scheduled interest rate announcements during 2020. That listing is as follows:
Wednesday, January 22
Wednes...
CRA issues warning on self-directed RRSP withdrawal schemes The Canada Revenue Agency has issued a Tax Tip warning owners of self-directed RRSPs about a current tax scheme which they may encounter.
Promoters of such schemes falsely promise owners of self-direc...
CRA issues updated guide to electronic record keeping by taxpayers The Canada Revenue Agency has updated and re-issued its Information Circular outlining the rules and requirements which apply to taxpayers who keep business and tax books and records in electronic for...
Inflation rate unchanged in July The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation recorded for the month of July was unchanged from the previous month. For both June and July, tha...
Prescribed interest rate for leasing for September The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, which includes the applicable rate for the upcoming month, as well as the rates in ...
Unemployment rate up slightly for July The most recent release of Statistics Canada’s Labour Force Survey shows a slight increase in the unemployment rate for the month of July, as measured on a year-over-year basis. For that month, the ...
CRA enhances telephone security procedures The Canada Revenue Agency (CRA) has issued a Tax Tip reminding taxpayers of the procedures which it utilizes to protect their personal information, particularly with respect to contacts between taxpay...
Third quarterly income tax instalment due September 15 Individuals who are required to pay income tax by instalments must make their third quarterly instalment for 2019 on or before September 15, 2019. As that date is a Sunday, such payments are considere...
Bank of Canada releases 2020 interest rate announcement dates The Bank of Canada has released the listing of dates on which it will make scheduled interest rate announcements during calendar year 2020.
There will be 8 such scheduled interest rate announcements d...
Mortgage stress test interest rate lowered to 5.19% Prospective mortgage borrowers in Canada are subject to a “stress test” as part of the assessment of their credit-worthiness. Under that test, such borrowers are required to qualify for a mortgage...
Inflation rate up by 2% in June The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation during the month of June 2019 stood at 2%. The comparable rate for May was 2.4%.
The decr...
Prescribed interest rate for leasing for August The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
Slight increase in unemployment rate for June The most recent release of Statistics Canada’s Labour Force Survey shows that, although the unemployment rate for the month of June rose by 0.1%, employment increased by 132,000 positions during the...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on July 10, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the bank rate remains at 2%.
...
Prescribed interest rates for the first three quarters of 2019 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first three quarters of 2019, as well as the rates that will apply for th...
Increases to GST/HST credit and Canada Child Benefit payment rates July 1, 2019 is the start of the 2019-20 benefit year for many provincial and federal child and tax benefits, including the federal GST/HST credit and the Canada Child Benefit.
As of that date, the pa...
OAS payment rates for third quarter of 2019 The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the third quarter (July 1 to September 30) of 2019. OAS payments are indexed quarterly to ...
Prescribed interest rate for leasing for July The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July 2019.
The prescribed rate for July is 2.75%.
A chart showi...
Inflation rate for May at 2.4% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of May 2019, as measured on a year-over-year basis, stood at 2.4%.
Inflation during...
First-time home buyer’s incentive to launch September 2, 2019 In this year’s federal Budget, a new program was announced to benefit first-time home buyers. Under that program, the First-Time Home Buyer’s Incentive, the Canada Mortgage and Housing Corporation...
Increases to Canada child benefit effective July 1, 2019 Effective as of July 2019, the amount of Canada Child Benefit (CCB) payable to eligible Canadian families will be increased to account for inflation.
Starting with the July payment (which will be made...
Unemployment rate down slightly in May The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate recorded for the month of May. The unemployment rate for that month stood at...
Prescribed interest rates for leasing for June 2019 The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the month of June 2019.
The prescribed rate for that month will be increase...
Individual income tax instalment payment due June 17 Individual taxpayers who pay income tax by instalments must make their second instalment payment for 2019 on or before June 17, 2019.
Such taxpayers will have received an instalment notice setting out...
2018 returns for self-employed taxpayers due June 17, 2019 Self-employed taxpayers (and their spouses) have until Monday June 17, 2019 to file their income tax returns for the 2018 tax year. Returns filed after that date will be subject to late-filing penalti...
Bank of Canada maintains interest rates at current levels In its regularly scheduled interest rate announcement made on May 29, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Consequently, the Bank Rate remain...
Filing of 2018 tax return required to receive federal tax benefits The federal government and many of the provinces provide benefit programs for which both entitlement and benefit amount are based, at least in part, on the income of the recipient taxpayer. Those bene...
Overall inflation rate for April 2019 at 2% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of April stood at 2%, as measured on a year-over-year basis.
Seven of the eight maj...
CRA confirms June 17 filing deadline for self-employed taxpayers The Canada Revenue Agency (CRA) has issued a Tax Tip confirming that the filing deadline for individual income tax returns filed for the 2018 tax year by self-employed individuals and their spouses is...
Good employment news for the month of April The most recent release of Statistics Canada’s Labour Force Survey shows growth in employment during the month of April for nearly all demographic groups. The overall unemployment rate for the month...
CRA issues warning on Health Spending Account tax schemes The Canada Revenue Agency (CRA) has issued a warning about a current tax scheme involving Health Spending Accounts (HSAs) which are being marketed to small businesses. HSAs are self-insured health pla...
Canada Child Benefit rates to increase in July The federal government has announced that, effective with the July 2019 payment, Canada Child Benefit rates will increase.As of July, the maximum benefit for a child under the age of 6 will increase t...
Prescribed interest rate for leasing for May 2019 The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the month of May 2019.
The prescribed rate for that month will be reduced t...
CRA reminds flood-affected taxpayers of available relief The Canada Revenue Agency (CRA) has issued a press release reminding taxpayers who have been affected by this spring’s floods of the availability of relief with respect to their obligation to file a...
Increase in rate of inflation for March 2019 The most recent release of Statistics Canada’s Consumer Price Index shows a significant increase in the rate of inflation recorded for the month of March 2019. During that month, the CPI rose 1.9%, ...
Bank of Canada leaves interest rates unchanged The Bank of Canada, in its regularly scheduled interest rate announcement made on April 24, determined that no change was needed to current rates. The Bank Rate therefore remains at 2%.
The press rele...
OAS rates unchanged for the second quarter of 2019 The federal government has announced the Old Age Security payment rates which will be in effect for the second quarter (April 1 to June 30) of 2019.
OAS payment rates are indexed quarterly to inflatio...
April 30 deadline for payment of 2018 individual income taxes All payments of individual income tax owed for the 2018 taxation year must be received by the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2019.
There are a number of means by which paym...
CRA issues guide to medical expense claims for 2018 The Canada Revenue Agency (CRA) has issued an updated guide to be used by taxpayers who are claiming medical expenses on their income tax returns for 2018.
Individual taxpayers are entitled to claim a...
Unemployment rate unchanged in March The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change in the overall unemployment rate for the month of March. That rate remained at 5.8%.
Employment ...
Prescribed interest rates for leasing for April The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the month April 2019.
The prescribed rate for the upcoming month is 3.1%.
A chart...
Prescribed interest rates for the first half of 2019 The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2019, as well as the rates that will apply for the purpose of cal...
CRA posts Tax Tips for students and seniors The Canada Revenue Agency (CRA) has posted a number of Tax Tips for seniors and students on its website. Those Tax Tips list and explain particular credits, deductions, or benefits which are most like...
Inflation increases by 1.5% in February The most recent release of Statistics Canada’s Consumer Price Survey indicates that the rate of inflation for the month of February, as measured on a year-over-year basis, stood at 1.5%. The compara...
Budget 2019: Adjusting the Rules for Cannabis Taxation Budget 2019 is proposing that the excise duty framework for cannabis products be amended to more effectively apply the excise duty on new classes of cannabis products, as well as to cannabis oils, whi...
Budget 2019: Expanding Health-Related Tax Relief Budget 2019 proposes to expand health-related tax relief under the Goods and Services Tax/Harmonized Sales Tax (GST/HST) system to better meet the health care needs of Canadians by:
providing GST/HST ...
Budget 2019: Employee Stock Options Budget 2019 announces the Government’s intent to limit the use of the current employee stock option tax regime and move toward aligning the tax treatment with the United States for employees of larg...
Budget 2019: Electronic Delivery of Requirements for Information Budget 2019 proposes that the Canada Revenue Agency (CRA) will be allowed to send requirements for information electronically to a bank or credit union only if the bank or credit union notifies the CR...
Budget 2019: Carrying on Business in a Tax-Free Savings Account Budget 2019 proposes that the joint and several liability for tax owing on income from carrying on a business in a TFSA be extended to the TFSA holder. The joint and several liability of a trustee of ...
Budget 2019: Mutual Funds: Allocation to Redeemers Methodology Budget 2019 proposes to introduce a new rule that would deny a mutual fund trust a deduction in respect of the portion of an allocation made to a unitholder on a redemption of a unit of the mutual fun...
Budget 2019: Medical Expense Tax Credit Amounts paid for cannabis products may be eligible for the medical expense tax credit where such products are purchased for a patient for medical purposes in accordance with the Access to Cannabis for...
Budget 2019: Supporting Donations of Cultural Property A recent court decision related to the interpretation of “national importance” has created uncertainty about the availability of these tax incentives. Budget 2019 proposes to introduce legislative...
Budget 2019: Variable Payment Life Annuities Budget 2019 proposes to amend the tax rules to permit PRPPs and defined contribution RPPs to provide a variable payment life annuity (VPLA) to members directly from the plan. A VPLA will provide payme...
Budget 2019: Advanced Life Deferred Annuities Budget 2019 proposes to amend the tax rules to permit an advanced life deferred annuity (ALDA) to be a qualifying annuity purchase, or a qualified investment, under certain registered plans. An ALDA w...
Budget 2019: Modernizing the Home Buyers’ Plan (HBP) Budget 2019 proposes to increase the Home Buyers’ Plan (HBP) withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019. Budget 2019 also proposes to extend acces...
Budget 2019: Canada Training Credit Budget 2019 proposes this new, non-taxable credit that would help Canadians pay for training fees. Every year, eligible workers between the ages of 25 and 64 would accumulate a credit balance of $250 ...
Budget 2019: Strengthening Canada’s International Tax Rules Budget 2019 proposes to:
extend the foreign affiliate dumping rules in the Income Tax Act to prevent a corporation resident in Canada that is controlled by a non-resident individual or trust from redu...
Budget 2019: Strengthening Beneficial Ownership Transparency In Budget 2019, the Government proposes further amendments to the Income Tax Act to make the beneficial ownership information maintained by federally incorporated corporations more readily available t...
Budget 2019: Character Conversion Transactions Budget 2019 proposes an amendment that introduces an additional qualification for the commercial transaction exception in the definition “derivative forward agreement” as the exception applies to ...
Budget 2019: Improving Support for Small, Growing Companies Budget 2019 proposes to repeal the use of taxable income as a factor in determining a CCPC’s annual expenditure limit for the purpose of the enhanced SR&ED tax credit. As a result, small CCPCs w...
Budget 2019: Small Business Deduction - Farmers and Fishers Budget 2019 proposes to eliminate the requirement that sales be to a farming or fishing cooperative corporation in order to be excluded from specified corporate income. As such, this exclusion will ap...
Budget 2019: Support for Canadian Journalism Budget 2019 proposes to introduce three new tax measures to support Canadian journalism:
allowing journalism organizations to register as qualified donees;
a refundable labour tax credit for qualifyin...
Unemployment rate unchanged in February The most recent release of Statistics Canada’s Labour Force survey shows that, while the rate of unemployment for the month of February was unchanged, employment grew by 56,000 positions. The unempl...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on March 6, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2%
I...
Inflation down to 1.4% for January 2019 The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows a drop in the rate of inflation for the month of January. That rate, as measured on a year-over-year basis, was 1.4%. ...
First instalment payment of 2019 due March 15 The first instalment payment of individual income taxes for the 2019 tax year is due on or before Friday March 15, 2019. Individuals who have previously paid tax by instalments will have received an i...
CRA providing extended hours for individual tax help line The Canada Revenue Agency (CRA) has announced that its Individual Income Tax Enquiries line (1-800-959-8281) is now available for extended hours.
Until April 30, 2019, telephone agents will be availab...
Date announced for 2019-20 federal Budget The Minister of Finance has announced that the 2019-20 federal Budget will be brought down on Tuesday, March 19, 2019.
Once the Budget is released, at around 4 p.m., the Budget Papers will be posted o...
Obtaining a 2018 tax return form and guide The 2018 T1 Individual Income Tax Return and Guide package is now available on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packag...
NETFILE available for filing of 2018 individual income tax returns The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns is available as of Monday, February 18, 2019.
The current NETFILE service (which ...
CRA issues tax filing tips for students The Canada Revenue Agency (CRA) has issued a Tax Tip for post-secondary students and graduates who will be filing an income tax return for the 2018 tax year.
That Tax Tip, which can be found on the CR...
Small increase in unemployment rate for January During the month of January, the number of people employed in Canada rose by 67,000, with that figure attributable for most part to increased employment of those aged 15 to 24 and those working in the...
Prescribed interest rate for leasing The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of March 2019.
That prescribed rate for the month of March will be...
CRA issues tax filing tips for seniors The Canada Revenue Agency (CRA) has posted a Tax Tip which lists the tax deductions and credits which are most relevant to seniors, and which can be claimed by eligible seniors when preparing and fili...
NETFILE service for 2018 returns available February 18 The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns for the 2018 tax year will be available online on Monday February 18, 2019. The N...
Upcoming changes to the CRA’s e-mail service Effective as of February 11, 2019, the Canada Revenue Agency (CRA) will be merging its online mail and account alerts services. Notification of the change is being sent to users of those services, and...
Pre-Budget consultations ending on January 29 Finance Canada has issued a reminder that the current consultation process with respect to the upcoming 2019-20 federal Budget will end on Tuesday, January 29, 2019.
Interested stakeholders can make t...
Inflation rate increases to 2% in December The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation, as measured on a year-over-year basis, stood at 2% during the month of December 2018. The equiva...
Finance announces automobile allowance limits and rates for 2019 Finance Canada has announced the automobile deduction limits and expense benefit rates which will apply to businesses and their employees during the 2019 taxation year.
Most of the limits which applie...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on January 9, 2019, the Bank of Canada indicated that no change would be made to current interest rates. The Bank Rate therefore remains at 2...
Prescribed interest rates for leasing for January and February The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the months of January and February 2019.The prescribed rate for January is ...
Prescribed interest rates for the first quarter of 2019 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2019, as well as the rates that will apply for the purpo...
Canada Pension Plan changes to take effect January 1, 2019 Over the next seven years, significant changes will be made to the Canada Pension Plan. Those changes will result, overall, in an increase of about 50% in the maximum retirement benefit.
The first suc...
Inflation for November down to 1.7% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of November, as measured on a year-over-year basis, stood at 1.7%. The comparable r...
NETFILE service for prior years available until January 25, 2019 Taxpayers who have not yet filed their individual income tax returns for 2017 (or the three prior years) can file those returns on NETFILE until Friday, January 25, 2019. Until that date, the Canada R...
Prescribed leasing interest rate for January 2019 The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of January 2019.
The prescribed rate for that month will be 3.39%....
December 31, 2018 deadline for 2008 tax fairness applications Where taxpayers fail to meet their tax filing or payment obligations, penalties and interest are usually levied for that failure. However, the Minister of National Revenue has the authority to forgive...
Unemployment rate for November at 42-year low The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of November was the lowest recorded since 1976.
The unemployment rate for the month,...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on December 5, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate rem...
Personal tax credit amounts for 2019 The federal government will provide the following personal tax credit amounts for 2019:
Basic personal amount ……………………………… $12,069
Spouse or common law partner amount …...
Inflation rate up slightly in October The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation rate for the month of October. That rate rose 2.4%, following a 2.2% increase for...
New tax credits to support news organizations In the 2018-19 Fall Economic Statement, the Minister of Finance announced that three new tax initiatives would be introduced to support both traditional and digital news organizations.
Those changes w...
Federal government announces new business tax incentives In the Fall Economic Statement issued on November 21, the Minister of Finance announced new tax measures that would:
allow businesses to immediately write off the cost of machinery and equipment used ...
CRA issues 2018 employer’s guide to taxable benefits Some of the non-monetary benefits which employers provide to their employees must be included in the employee’s income and taxed as such. Each year, employers must include the amount of any such tax...
CRA announces enhancements to BizApp The Canada Revenue Agency (CRA) provides a mobile web app for small business owners and sole proprietors which enables them to manage their business tax accounts on any browser-enabled mobile device.
...
Unemployment rate down slightly for September The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in unemployment during the month of September. That rate stood at 5.8%, down 0.1% from the rate posted for Au...
Canada Pension Plan contribution rates for 2019 The Canada Revenue Agency has announced the contribution rates and amounts for the Canada Pension Plan which will apply during the 2019 calendar year, and that announcement can be found at https://www...
Prescribed interest rate for leasing for November The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of November.
The prescribed rate for that month will be 3.43%.
A c...
CRA announces contingency plans for postal disruption The Canada Revenue Agency (CRA) (as well as other federal government departments and agencies) has issued information indicating how government payments will be handled during the current postal disru...
Inflation rate at 2.2% for September The most recent release of Statistics Canada’s Consumer Price Index shows that the inflation rate for the month of September stood at 2.2%, as measured on a year-over-year basis. The comparable rate...
Bank of Canada raises interest rates again In its regularly scheduled interest rate announcement made on October 24, the Bank of Canada once again increased the bank rate, which now stands at 2%.In the press release announcing the increase, wh...
OAS payment rates for the fourth quarter of 2018 The federal government has announced the maximum Old Age Security (OAS) benefit amount which will be paid to eligible recipients in the last quarter — October, November, and December — of 2018.
Th...
CRA issues updated forms for reduced source deductions In some circumstances, taxpayers are entitled to request a reduction in the amount of tax being deducted at source from their income. An employee can request that the amount of income tax being deduct...
CRA to hold webinar on CPP changes for the self-employed A number of changes have been made over the past few years to the Canada Pension Plan (CPP), with those changes generally providing greater flexibility to CPP contributors. Some of those changes parti...
Slight decline in unemployment rate for September The most recent release of Statistics Canada’s Labour Force Survey shows a small decrease in the overall unemployment rate for the month of September. That rate decreased from the 6% rate recorded f...
Prescribed interest rate for leasing for October The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of October.
The prescribed rate for that month will be 3.33%.
A ch...
Prescribed interest rates for the fourth quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the fourth quarter of 2018, as well as the rates that will apply for the purp...
NETFILE still available for filing of 2017 returns While the deadline for filing of individual income tax returns for the 2017 tax year (for both employees and the self-employed) has passed, the Canada Revenue Agency’s (CRA’s) NETFILE service thro...
Inflation rate down slightly in August The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August 2018 stood at 2.8%, as measured on a year-over-year basis. The comparable...
CRA updates fact sheet for temporary Canadian workers Canada’s tax system is one based on residency, and individuals who are considered to be residents of Canada are subject to federal and provincial tax.
The federal government has issued a fact sheet ...
Employment insurance premium rate for 2019 The Minister of Finance has announced that the employment insurance premium rate payable by employees and the self-employed for the 2019 tax year will be reduced.
The premium rate for that year will b...
CRA issues updated guide to federal and provincial child benefits The federal government has updated and re-issued its guide to child benefits paid by the federal and several provincial governments.
The updated guide (T4114), which is available on the Canada Revenue...
Slight increase in unemployment rate for August The most recent release of Statistics Canada’s Labour Force Survey shows a small increase in the unemployment rate posted for the month of August. That rate rose by 0.2%, from 5.8% to 6%.
Most of th...
Relief available to taxpayers affected by wildfires The Canada Revenue Agency (CRA) can provide interest and penalty relief to taxpayers who are unable to meet their tax filing or payment obligations due to circumstances beyond their control, including...
Bank of Canada leaves interest rates unchanged In its scheduled interest rate announcement made on September 5, the Bank indicated that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 1.75%.
The Bank acknow...
CRA issues Tax Tip on benefit review process Each year the Canada Revenue Agency (CRA) sends a letter and questionnaire to approximately 350,000 taxpayers, seeking to determine whether such taxpayers are receiving the correct tax credits and ben...
Upcoming tax instalment due date for individuals The due date for the third instalment payment of 2018 income taxes by individuals falls on September 15, 2018. As that date is a Saturday, instalment payments will be considered to be made on time if ...
Amendments to be made to rules on political activities of charities The federal government has announced that changes will be made to the administrative rules governing the extent to which charities can engage in non-partisan political activities.
The intended amendme...
Rate of inflation at 3% for July The most recent release of Statistics Canada’s Consumer Price Survey shows a significant increase in inflation for the month of July. That rate, as measured on a year-over-year basis, stood at 3%. T...
Unemployment rate down slightly for July The most recent release of Statistics Canada’s Labour Force Survey indicates that the overall rate of unemployment was down slightly for the month of July. That rate stood at 5.8%, down by 0.2% from...
Finance announces lower payment card fees for small businesses The Minister of Finance has announced that two major payment card networks have agreed to lower costs charged to small and medium-sized businesses.
Both VISA and Mastercard have agreed to reduce domes...
CRA podcasts and webinars for small businesses The Canada Revenue Agency (CRA) prepares and posts on its website a number of podcasts and webinars covering tax and tax-related issues of particular interest to small businesses.
There are currently ...
Bank of Canada 2019 interest rate announcement dates The Bank of Canada has issued a listing of the dates on which it will make announcements during the 2019 calendar year with respect to current interest rates.
There are eight such interest rate announ...
CRA issues new direct deposit form for businesses The Canada Revenue Agency (CRA) has updated and re-issued its Form RC366, which allows businesses to have amounts owed to them deposited directly to a bank account.
The updated form can be used to eit...
CRA issues updated guide to RESPs The Canada Revenue Agency (CRA) has updated and re-issued its publication RC4092(E) on Registered Education Savings Plans.
The updated publication incorporates changes, originally announced as part of...
Inflation rate up by 2.5% in June The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of June, as measured on a year-over-year basis, stood at 2.5%. That change ...
Prescribed interest rates for leasing rules The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will apply during the months of July and August 2018.
Those prescribed rates will be 3.28% for July ...
CRA issues updated guide to taxation of RRIF on death The Canada Revenue Agency has updated and re-issued its publication outlining the tax treatment of funds held in a RRIF on the death of the RRIF annuitant.
The updated publication (RC4178(E)) also rev...
Slight increase in unemployment rate for June While employment rose by 32,000 during the month of June, the unemployment rate was also up, by 0.2%, a result attributed by Statistics Canada an increase in the number of individuals seeking to enter...
Bank of Canada increases benchmark interest rate In its regularly scheduled interest rate announcement made on July 11, the Bank of Canada indicated that it was increasing its benchmark interest rate by one-quarter of a percentage point. Accordingly...
CRA issues Tax Tip on return review process Each year, the Canada Revenue Agency reviews approximately 3 million returns which have already been filed and assessed. Generally, such reviews are carried out to confirm income amounts reported, and...
Old Age Security benefits to increase by 1.2% in third quarter Old Age Security (“OAS”) benefits received by Canadians are indexed to changes in the overall Consumer Price Index, and are adjusted each quarter to reflect increases in that Index.The federal gov...
No change to inflation rate for May The most recent release of Statistics Canada’s Consumer Price Index indicates the rate of inflation for the month of May stood at 2.2%. The same rate was recorded for the month of April, and both ra...
CRA issues updated source deductions online calculator The Canada Revenue Agency (CRA) has re-issued the payroll deductions online calculator to be used by employers in calculating employee source deductions as of July 1, 2018.
The updated version of that...
Prescribed interest rate for leasing for July The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July.
The prescribed rate for that month will be 3.28%.
A chart...
Prescribed interest rates for the third quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the third quarter of 2018, as well as the rates that will apply for the purpo...
CRA updates and re-issues Notice of Objection form The Canada Revenue Agency has updated and re-issued its standard form for filing an objection to a Notice of Assessment or Reassessment. The 2018 T-400A E, Notice of Objection, can be found on the CRA...
No change in unemployment rate for May The most recent release of Statistics Canada’s Labour Force Survey shows little change in unemployment during the month of May. For the fourth consecutive month, that rate stood at 5.8%.
There was s...
June 15 filing deadline for self-employed taxpayers The filing deadline for individual income tax returns for the 2017 year for self-employed individuals and their spouses is midnight Friday June 15, 2018.
Returns can be filed using the Canada Revenue ...
Individual income tax instalment payment due June 15 For Canadians who make quarterly instalment payments of personal income tax, the next due date for such payment is Friday June 15, 2018.
The Canada Revenue Agency has posted a notice on its website in...
Taxpayer relief available for Canadians affected by spring floods The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who have been affected by this spring’s floods of the availability of administrative tax relief.
Under the federal government’s T...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on May 30, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the Bank Rate remains...
CRA issues updated payroll deduction formulas for July 1, 2018 The Canada Revenue Agency (CRA) has issued updated payroll deduction formulas for use by employers for payroll periods beginning after July 1, 2018. The updated formulas reflect changes in provincial ...
Inflation rate for April at 2.2% The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of April stood at 2.2%, as measured on a year-over-year basis. The rate for...
Unemployment rate unchanged in April The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change during the month of April to either employment figures or the overall unemployment rate.
That un...
CRA tax topic podcasts available for download The Canada Revenue Agency prepares and posts podcasts on a number of different tax topics, both individual and corporate. Those podcasts are available for download from the CRA website.
The current se...
Prescribed interest rates for May and June The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the months of May and June 2018.
Those prescribed rates will be 3.22% during the ...
Getting information about your tax refund Taxpayers who have filed their return for the 2017 tax year and are expecting to receive a refund can track the status of that refund payment through a toll-free telephone line. That line, the CRA’s...
CRA issues warning on filing season tax scams The Canada Revenue Agency (CRA) has issued a warning to taxpayers of the need to be particularly vigilant with respect to fraudulent text, telephone, and e-mail communications, which increase during t...
Inflation rate for March reaches 2.3% The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation stood at 2.3% during the month of March 2018, as measured on a year-over-year basis. The year...
April 30 due date for all 2017 individual taxes owed The Canada Revenue Agency (CRA) has issued a reminder that all individual income tax balances owed for the 2017 tax year must be paid on or before Monday April 30, 2018.
April 30 is also the deadline ...
Unemployment rate unchanged in March The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment for the month of March 2018 stood at 5.8%. The same rate was recorded for February 2018.
Employ...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on April 18, the Bank of Canada indicated that no change was required to current interest rates. Accordingly, the Bank Rate will remain at 1....
ReFILE service for changing individual income tax returns It is not uncommon for taxpayers to discover an error or omission in an already-filed return, and the usual means by which such error can be corrected is the filing of a T1-Adjustment form. While a co...
CRA issues reminder of taxability of income from “sharing economy” The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who receive income from the “sharing economy” that such income is taxable and must be reported on the annual tax return.
Although...
Bank of Canada interest rate announcement dates for 2018 The Bank of Canada’s regularly scheduled interest rate announcement dates for the remainder of calendar year 2018 are as follows:
April 18, 2018;
May 30, 2018;
July 11, 2018;
September 5, 2018;
Octo...
CRA issues update on home sale reporting requirements Proceeds received from the sale of one’s principal residence are, in most circumstances, not taxable, as such sales are eligible for the principal residence exemption. However, as of the 2016 tax ye...
Significant increase in inflation rate for February The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in inflation for the month of February. That rate stood at 2.2%, while the rate for January 2018 was 1.7%. ...
Prescribed interest rates for second quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the second quarter of 2018, as well as the rates that will apply for the purpose...
CRA issues warning on tax scams While taxpayers fall victim to tax scams year-round, such scams are more prevalent during and just following tax filing season. During that time, taxpayers expect to hear from the tax authorities, a...
CRA issues e-filers manual for 2017 returns The Canada Revenue Agency has issued its Guide RC4018, Electronic Filers Manual for 2017 Income Tax and Benefit Returns. That guide is for use by certified e-filers in filing individual income tax ret...
Unemployment rate down slightly in February The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate for the month of February 2018. That rate declined from 5.9% in the month of...
Increase in Consumer Price Index for January The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation for the month of January 2018 stood at 1.7%. The rate for the previous month was 1.9%.
Inflat...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on March 7, the Bank of Canada indicated that no change would be made to current interest rates. Accordingly, the bank rate remains at 1.5%.
...
Budget 2018 - Personal tax credits Budget 2018: No personal tax credits have been repealed, and there are no new personal tax rate changes....
Budget 2018 - Service animals Budget 2018: Eligibility of specially trained service animals will be expanded for the purposes of the medical expense tax credit....
Budget 2018 - Canada Workers Benefit Budget 2018: Taxpayers will no longer need to apply when filing their return in order to receive the Canada Workers Benefit....
Budget 2018 - CRA compliance orders Budget 2018: Where a CRA compliance order or information requirement is contested, a new rule will “stop the clock” to prevent the tax year from being statute barred....
Budget 2018 - RDTOH Budget 2018: A corporation will have two RDTOH accounts going forward: eligible and non-eligible RDTOH....
Budget 2018 - Investment income Budget 2018: A corporation with $100,000 of investment income will have its small business limit reduced to $250,000....
Extended hours for CRA telephone help line The Canada Revenue Agency (CRA) provides a 1-800 telephone service to provide tax information to Canadian taxpayers. Such information can be general in nature, or can involve the specific tax affairs ...
CRA issues list of approved software for NETFILING of 2017 returns The Canada Revenue Agency’s NETFILE service for filing of individual income tax returns will be available starting Monday February 26, 2018.
Taxpayers do not need to obtain an access code to file th...
Unemployment rate up slightly in January The most recent release of Statistics Canada’s Labor Force Survey shows a slight increase in the overall unemployment rate for the month of January. That rate rose by 0.1%, from 5.8% to 5.9%.
That c...
2018-19 Federal Budget date announced The Federal Minister of Finance has announced that the 2018-19 federal Budget will be brought down on Tuesday, February 27, 2018.
The Budget will be released at around 4 p.m. and the full Budget Paper...
Obtaining hard copy of a 2017 income tax return package This year, the Canada Revenue Agency (CRA) will be providing taxpayers with hard copies of the 2017 Income Tax and Benefit package through a variety of means, and at various dates.
Individuals who pap...
CRA announces NETFILE service availability dates for 2017 returns The Canada Revenue Agency (CRA) has announced the date on which NETFILE service for the filing of individual income tax returns for the 2017 tax year will be available.
NETFILE service will be availab...
CRA to mail tax return packages to selected taxpayers While the majority of Canadians now file their individual income tax returns electronically, there is still a significant minority of tax filers who file using a printed return.
The Canada Revenue Age...
CRA announces change to 2017 individual tax return forms The Canada Revenue Agency (CRA) has posted a notice on its website that an “update” has been made to individual 2017 tax forms. Those forms are to be used by individual Canadians to file their ret...
CRA reinstates telephone tax return filing service For a number of years, taxpayers whose tax situation was relatively straightforward were able to file their return by telephone. That service, which was called TELEFILE, was withdrawn a few years ago....
Prescribed interest rates for first quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2018, as well as the rates that will apply for the purpo...
Bank of Canada raises interest rates As widely expected, the Bank of Canada indicated, in its regularly scheduled interest rate announcement made on January 17, that an increase in the bank rate was required.
The Bank’s announcement, w...
Federal Budget 2018-19 consultations to end January 26 Finance Canada has announced that the consultation process leading to the release of the 2018-19 federal Budget will conclude on Friday January 26, 2018.
Canadians can provide input by submitting thei...
CRA issues individual T1 Tax Return Form and Guide for 2017 The Canada Revenue Agency has released the T1 Individual Income Tax Return and Benefit form to be used by individual Canadian taxpayers in filing their return for the 2017 tax year. The T1 form is ava...
Unemployment rate for December 2017 down to 5.7% The most recent release of Statistics Canada’s Labour Force Survey indicates that the unemployment rate for the month of December 2017 stood at 5.7%. The last period for which that rate was recorded...
Small business tax rate reduced effective January 1 As previously announced, the federal small business tax rate is reduced to 10.0%, effective as of January 1, 2018. There is no change in the federal small business limit, which remains at $500,000.
Th...
Automobile deduction and benefit limits for 2018 Finance Canada has announced the limits and thresholds which will apply for purposes of determining automobile benefits and deductions during 2018.
Most such deduction limits and thresholds are unchan...
CRA issues guidance on upcoming changes to small business tax rules Planned changes to the federal income tax rules governing the taxation of small incorporated Canadian businesses are to take effect for 2018. One of those changes will include greater restrictions on ...
Changes to be made to Voluntary Disclosure Program The Canada Revenue Agency (CRA) provides an administrative program under which taxpayers who have failed to file returns or pay taxes on a timely basis can bring their tax affairs into compliance, usu...
Age 71 final RRSP contribution to be made by December 31 Taxpayers who are turning age 71 during the year and who have available contribution room are entitled to make a final RRSP contribution for that year.
Such contributions must be made by the end of th...
NETFILE service for 2016 returns available until January 19 Taxpayers who have not yet filed their return for the 2016 tax year will have until January 19, 2018 to file that return using NETFILE. Until that date, returns for the 2013, 2014, 2015, and 2016 tax ...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on December 6, the Bank of Canada indicated that, in its view, no change is required to current rates. Accordingly, the bank rate remains at ...
Unemployment rate down in November The most recent release of Statistic’s Canada’s Labour Force Survey shows a slight decline in the overall unemployment for the month of November. That rate declined by 0.4%, to 5.9%. The November ...
T4127 for 2018 payroll deduction amounts released The Canada Revenue Agency has issued the 2018 version of its publication T4127(E), Payroll Deductions Formulas. The guide is intended for use by payroll software providers and by employers which manag...
CRA issues federal TD1 Form and TD1 Worksheet for 2018 The Canada Revenue Agency has issued the federal TD1 Form and Worksheet which will be used by taxpayers and their employers to determine required federal income tax source deductions for the upcoming ...
Inflation rate up by 1.4% in October The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows an inflation rate of 1.4% for the month of October, as measured on a year-over-year basis. The equivalent rate for the...
Finance launches pre-budget consultations Finance Canada has begun the consultation process leading to the release of the 2018-19 federal Budget.
As part of that budget consultation process, the Minister of Finance is holding in-person public...
CRA to provide online filing for trust tax and information returns Effective as of January 8, 2018, administrators and representatives of qualifying Canadian trusts will be able to file trust income tax and information returns online, through the Canada Revenue Agenc...
Employment Insurance premium rates for 2018 The federal government has announced the premium rates and maximum insurable earnings amount which will be in place for the 2018 calendar year.
The premium rate for the year for employees has been set...
CRA announces CPP contribution rates and amounts for 2018 The Canada Revenue Agency (CRA) has announced the contribution rates and amounts for both employers and employees which will apply for 2018.
Maximum pensionable earnings for the year will be $55,900 (...
ON - 2022-23 budget projects current-year deficit of $19.9 billion The 2022-23 Ontario budget was announced by the Minister of Finance on April 28, 2022. That budget projects a deficit of $19.9 billion for the current (2022-23) fiscal year.
Projections contained in t...
ON - Temporary cut in gas and fuel taxes effective July 1, 2022 The provincial government has announced that the gasoline tax will be reduced by 5.7 cents per litre, effective as of July 1, 2022. As of the same date, the provincial fuel tax will be reduced by 5.3 ...
ON - Interest Rates - 2022 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Climate Action Incentive payment amounts for 2022-23 The federal government has released information on Climate Action Incentive (CAI) payment amounts for 2022-23. For residents of Ontario, those amounts will be $373 for the first adult in a family, $18...
ON - Province delays release of budget for fiscal year 2022-23 In its announcement of this year’s budget consultation process, the Ontario government indicated that, as required by provincial law, the 2022–23 provincial budget would be brought down before Mar...
ON - Provincial “staycation” tax credit available during 2022 The Ontario government has issued a reminder to residents of the province that a refundable tax credit may be claimed for expenses incurred for eligible accommodation during 2022 at hotels, motels, lo...
ON - Seniors’ home safety tax credit extended to end of 2022 The Seniors’ Home Safety Tax Credit is a refundable credit of 25% of up to $10,000 per household in eligible expenses, to a maximum credit of $2,500.
The credit is provided for eligible home renovat...
ON - Personal tax credit amounts for 2022 The province of Ontario will provide the following personal tax credit amounts for 2022:
Basic personal amount ……………………………… $11,141
Spouse or equivalent to spouse amount …...
ON - Province announces third quarter financial results for 2021-22 The province of Ontario has issued the revenue, expenditure, and deficit projection figures for the third quarter (October to December 2021) of its 2021-22 fiscal year.
Overall, the fiscal picture was...
ON - 2022-23 Budget consultation process closes on February 11 In January, the provincial government announced the launch of its virtual budget consultation process leading to the release of the Ontario Budget for 2022-23. That Budget will be brought down by the ...
ON - Applications open for Ontario Business Costs Rebate program The Ontario government recently announced that, as part of pandemic relief measures, eligible businesses in the province could receive a rebate of property tax and energy costs incurred during partial...
ON - Province launches consultation process for 2022-23 Budget The province has launched the virtual consultation process leading to the release of Ontario’s 2022-23 Budget by the end of March 2022. The Budget consultation process begins on January 17 and will ...
ON - Interest and penalty relief to be provided for small businesses The Ontario government has announced that small businesses in the province will be provided with a six-month interest-free and penalty-free period with respect to late or insufficient payments of most...
ON - Interest Rates - 2022 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - CRA issues TD1 form for Ontario residents for 2022 The Canada Revenue Agency (CRA) has issued the TD1 form to be used by residents of Ontario for the 2022 tax year. On the TD1 form, an employee indicates the provincial personal tax credit amounts for ...
ON - Jobs Training Tax Credit extended to 2022 In its recent Economic Outlook and Fiscal Review, the province announced that the existing Jobs Training Tax Credit would be extended to be available throughout 2022. The credit provides eligible Onta...
ON - Seniors’ Home Safety Tax Credit extended to 2022 In its recent Economic Outlook and Fiscal Review, the province announced that the existing Seniors’ Home Safety Tax Credit would be extended to be available until the end of 2022. That Credit was sc...
ON - Province to provide “staycation” tax credit for 2022 In the 2021 Ontario Economic Outlook and Fiscal Review released on November 4, 2021, the province introduced a new, temporary Ontario Staycation Tax Credit. The refundable credit, which is available f...
ON - Provincial minimum wage to increase January 1, 2022 The Ontario government has announced that, effective as of January 1, 2022, the provincial general minimum wage will increase from $14.35 per hour to $15 per hour.
As of the same date, the lower liquo...
ON - Minimum wage increase effective October 1, 2021 Effective as of October 1, 2021, the general minimum wage payable in the province increased by 10 cents, from $14.25 to $14.35 per hour. The minimum wage increase is based on year-over-year changes in...
ON - Interest Rates - 2021 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Province announces launch of Ontario Business Registry The province has announced that, beginning on October 19, 2021, the Ontario Business Registry will be brought online. That registry will enable Ontario businesses to effect online a significant number...
ON - Minimum wage increase to take effect October 1, 2021 Effective as of October 1, 2021, the Ontario general minimum wage will increase by 10 cents, from $14.25 to $14.35 per hour. Increases to the minimum wage are based on changes to the province’s Cons...
ON - Small businesses eligible for grant to enhance online presence The provincial government has announced that eligible Ontario small business may receive a $2,500 Digital Transformation Grant. The grant can be used to purchase new technology and digital services, t...
ON - Interest Rates - 2021 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Province announces residential rent increase guideline for 2022 The government of Ontario has announced that, for the 2022 calendar year, the general rent increase guideline for residential rental premises will be 1.2%. That guideline is based on year-over-year ch...
ON - Province extends post-secondary tuition freeze The Ontario government has announced that the tuition freeze for universities and colleges which was implemented last year will be extended through the 2021-22 academic year.
The announcement of the e...
ON - Ontario Regional Opportunities Investment Tax Credit doubled The Ontario Regional Opportunities Investment Tax Credit is a 10% refundable tax credit available to Canadian-controlled private corporations that make qualifying investments in eligible geographic ar...
ON - Province announces temporary increase to CARE program As part of its 2021-22 Budget, the Ontario government announced a temporary increase in the support provided by the Childcare Access and Relief from Expenses (CARE) tax credit for 2021. That credit pr...
ON - Interest Rates - 2021 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Temporary jobs training tax credit announced in 2021-22 Budget This year’s Ontario Budget included an announcement of a new jobs training tax credit for Ontario residents.
The refundable credit, which is available only for the 2021 tax year, is equal to 50% of ...
ON - Date announced for 2021-22 provincial Budget The Ontario government has announced that the province’s Budget for the upcoming 2021-22 fiscal year will be brought down on Wednesday March 24, 2021.
When the Budget is released, the budget papers ...
ON - Province releases third quarter financial report for 2020-21 The provincial government has released the revenue, expenditure, and projected deficit figures for the third quarter (October 1 – December 31) of the 2020-21 fiscal year.
Based on those figures, the...
ON - Province launches 2021 Budget consultation process The Ontario government has launched its consultation process with respect to the upcoming 2021-22 provincial Budget. That Budget will be brought down by March 31, 2021.
The Budget consultation process...
ON - Personal tax credit amounts for 2021 The province of Ontario will provide the following personal tax amounts for 2021.
Basic personal amount ………………………………… $10,880
Spouse or common law partner amount …… $9,...
ON - Interest Rates - 2021 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Application process for Support for Learners subsidy now open In early November the Ontario government announced that a subsidy would be provided to families with children up to age of 12 (or age 21 in the case of children with special needs).The purpose of the ...
ON - Ontario Finance updates and re-issues Notice of Objection form Ontario taxpayers who disagree with an assessment of their tax liability under a range of provincial tax programs are entitled to object to that assessment.
The Ontario government has updated and re-i...
ON - Province increases exemption threshold for Employer Health Tax The Employer Health Tax (EHT) is a payroll tax paid by employers based on their total annual Ontario remuneration in excess of a remuneration threshold. The EHT has a top rate of 1.95%.
In March 2020 ...
ON - 2020-21 Budget projects current year deficit of $38.5 billion In the 2020-21 Budget brought down on November 5, the government of Ontario projected a deficit of $38.5 billion for the current fiscal year. That deficit amount is unchanged from the figure projected...
ON - Province introduces Seniors’ Home Safety Tax Credit In the 2020 Budget brought down on November 5, the province introduced a new refundable tax credit for seniors. That credit will be claimable by senior homeowners, renters, or people who live with rel...
ON - Provincial Budget to be brought down on November 5 The Ontario government has announced that the 2020-21 provincial Budget will be brought down on Thursday November 5, 2020.
In the announcement of the Budget date, which is available on the provincial ...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Province releases Public Accounts for 2019-20 fiscal year Ontario has released the province’s final fiscal results for the fiscal year ended March 31, 2020. The 2019-20 Public Accounts compare those final fiscal results with the figures projected in the 20...
ON - Province to implement residential rent freeze for 2021 The Ontario government has announced that a rent freeze will be imposed for the 2021 calendar year for most residential rental accommodation in the province.
While Ontario already has rent control leg...
ON - Interest and penalty relief period to end October 1, 2020 As part of its pandemic response measures, the Ontario government provided businesses with relief from penalties and interest charges related to late filings or remittances, for a six-month period. Th...
ON - Province extends change to temporary layoff rules Under Ontario labour laws, where a non-unionized employee is laid off for more than 13 weeks, said layoff can trigger termination and severance payment obligations for the employer. However, earlier...
ON - CRA issues warning on tax scam and Ontario tax benefits The Canada Revenue Agency (CRA) has issued a warning to taxpayers of a current tax scam relating to claims for Ontario tax benefits — specifically, claims for the Ontario Senior Homeowners Property ...
ON - Minimum wage to increase effective October 1, 2020 On October 1, 2020, the Ontario general minimum wage will increase by 25 cents, to $14.25 per hour. That increase is based on changes to the Ontario Consumer Price Index.
Different minimum wage rates ...
ON - Interest and penalty relief program extended In March 2020, the Ontario government announced that, as part of its pandemic response plan, it would provide an interest and penalty relief period for Ontario taxpayers with respect to specific tax p...
ON - Province extends commercial rent assistance program The provincial government has announced that its commercial rent assistance program — Canada Emergency Commercial Rent Assistance (CECRA) — has been extended to be available until the end of Augus...
ON - Tax penalty and interest relief period ends August 31 In March 2020 the provincial government announced that, as part of its pandemic response plan, a five-month interest and penalty relief period would be provided to Ontario businesses which failed to f...
ON - Limits to be imposed on payday loan interest rates and fees The provincial government has announced that it will be moving to impose limits on the rate of interest and certain fees which can be levied by payday loan companies.
The proposed changes would cap th...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute at the beginning of each calendar quarter. The rates set for the third quarter...
ON - Application process for commercial rent assistance program open Applications can now be made by commercial landlords in Ontario for forgivable loans to assist with pandemic-related losses of rental income.
Under the Canada Emergency Commercial Rent Assistance (CEC...
ON - Province provides temporary deferral of student loan payments As part of its pandemic response plan, the province is providing interest relief and payment deferrals on existing Ontario Student Assistance Program (OSAP) loans.
Under that plan, OSAP borrowers will...
ON - Forgivable loan program for eligible small business landlords The Ontario government will be providing forgivable loans to eligible commercial property owners in the province who are experiencing rent shortfalls due to the pandemic, through the new Ontario-Canad...
ON - Interest and penalty relief for Ontario businesses As part of its recent Economic and Fiscal Update, the province announced that interest and penalty relief would be provided to Ontario businesses with respect to their obligations under specified tax ...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province to provide interest and penalty relief for businesses In the Economic and Fiscal Update brought down on March 25 Ontario’s Minister of Finance announced that, beginning April 1, 2020, penalties and interest will not be imposed on Ontario businesses tha...
ON - Province to bring down Economic and Fiscal update on March 25 The Ontario government had announced that the province’s 2020-21 Budget would be brought down on March 25, 2020.
The Ontario Minister of Finance has indicated that, in light of recent developments, ...
ON - Province announces date for 2020-21 Budget The Ontario government has announced that the province’s Budget for the upcoming (2020-21) fiscal year will be brought down on Wednesday March 25, 2020.
Once the Budget is released, the Budget paper...
ON - Province releases third-quarter results for 2019-20 The Ontario Ministry of Finance has announced the province’s financial results for the third quarter (October to December 2019) of its 2019-20 fiscal year.
As of December 31, 2019, the government is...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Personal tax credit amounts for 2020 The province of Ontario will provide the following personal tax credit amounts for 2020:
Basic personal amount ……………………………… $10,783
Spouse or common law partner amount ...
ON - Province projects balanced budget by 2023 In the 2019 Ontario Economic Outlook and Fiscal Review released by the provincial government on November 7, the Minister of Finance confirmed the government’s commitment to balance the budget by 202...
ON - Small business income tax rate to be reduced In the fall Economic Outlook and Fiscal Review released on November 6, the Minister of Finance announced that the provincial corporate income tax rate applied to Ontario small businesses will be reduc...
ON - Date announced for 2019 Fall Economic Statement The Ontario Minister of Finance has announced that the 2019 Fall Economic Statement will be brought down on Wednesday November 6, 2019.
That economic statement will update the revenue, expenditure, an...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province releases financial results for 2018-19 The Ontario government has released the Public Accounts which summarize the province’s financial position at the end of the 2018-19 fiscal year, which ended March 31, 2019.
The related press release...
ON - Land transfer tax refund for first-time home buyers The province of Ontario levies a land transfer tax (LTT) on each purchase and sale of property in the province. The province also provides first-time homebuyers in Ontario with a refund of LTT which w...
ON - Online calculator available for 2019-20 Ontario tax credits The province of Ontario provides residents with a number of refundable tax credits, with eligibility for those credits based on age, income, and type and place of residence. The current benefit year f...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Updated bulletin issued on non-resident speculation tax (NRST) Ontario imposes a 15% non-resident speculation tax (NRST) on purchases of residential property located in the Greater Golden Horseshoe Region (GGH) by individuals who are not citizens or permanent res...
ON - Budget reduces and simplifies Estate Administration Tax The province of Ontario levies an Estate Administration Tax (EAT), which is more commonly known as probate fees. In the 2019-20 Budget, the province announced that changes would be made to the EAT, as...
ON - Province to balance Budget in 2023-24 The 2019-20 Ontario Budget released on April 11, 2019 indicates that the province will not achieve a balanced budget until the 2023-24 fiscal year.
The Budget papers show that the province expects the...
ON - Province introduces new child care tax credit The 2019-20 provincial Budget brought down on April 11 included the announcement of a new refundable child care tax credit, claimable for the 2019 and subsequent taxation years.
The new credit will be...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Date announced for 2019-20 provincial Budget The Ontario government has announced that the province’s Budget for the upcoming (2019-20) fiscal year will be brought down on Thursday April 11, 2019.
Once the Budget is released, the Budget papers...
ON - Third quarter update shows reduced deficit The provincial government has issued its fiscal update for the Third Quarter of the 2018-19 year, and that update shows a $1 billion reduction in the province’s deficit. That deficit is now projecte...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province launches 2019-20 Budget consultation process The Ontario Minister of Finance has announced the start of the consultation process leading to the release of the province’s 2019-20 Budget next spring.
There are several options for Ontario residen...
ON - Payroll tax exemption level increased for 2019 In the recent Economic Outlook and Fiscal Review, the Ontario Minister of Finance announced that the annual payroll threshold for the province’s Employer Health (payroll) Tax (EHT) would be increase...
ON - Personal tax credit amounts for 2019 The province of Ontario will provide the following personal tax credit amounts for 2019:
Basic personal amount ………………………………… $10,582
Spouse or equivalent to spouse amount …...
ON - Province reverses planned 2019 minimum wage increase The Ontario government has reversed the minimum wage increase which had been scheduled to take effect on January 1, 2019. On that date, the minimum wage was scheduled to increase from $14 to $15 per h...
ON - Province offers property tax deferral program The province provides a program under which low-income seniors and low-income persons with disabilities can obtain a partial deferral of property tax and education tax. The tax deferral applies to the...
ON - Interest Rates - 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Increases to driver licensing fees cancelled The government of Ontario has announced that planned fee increases with respect to licensing fees for drivers in the province, which were to have taken effect on September 1, 2018, have been cancelled...
ON - Registering for online tax services for business The Ontario government provides an online service – ONT-TAXS, through which Ontario businesses can file and amend returns, make tax payments, and track the status of such returns and payments.
The s...
ON - Ontario Trillium Benefit amounts for 2018-19 benefit year The new benefit year for the Ontario Trillium Benefit (OTB) began in July 2018 and will run until June 2019. The OTB is a refundable tax credit which is claimed on the annual tax return and paid to ta...
ON - 2018 personal income tax rates As announced in this year’s provincial Budget, Ontario has altered its personal tax rate structure. The changes announced include the elimination of the provincial surtax and the replacement of the ...
ON - Provincial cap-and-trade system eliminated as of July 3 The Ontario government has announced that the existing cap-and-trade carbon tax system will be eliminated, effective as from July 3, and that provincial government programs which were funded under tha...
ON - Interest Rates – 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - CRA issues source deductions online calculator for Ontario The Canada Revenue Agency (CRA) has re-issued the payroll deductions online calculator to be used by Ontario employers in calculating employee source deductions starting July 1, 2018.
The updated vers...
ON - July 1st start of 2018-19 tax credit benefit year The province provides eligible Ontario residents with a number of refundable tax credits and benefits. Those benefits are paid on a monthly basis, and eligibility for most benefits is based, in part, ...
ON - Provincial R&D tax credit enhanced The Ontario Research and Development Tax Credit (ORDTC) is a 3.5% non-refundable tax credit earned on eligible R&D expenditures. As announced in this year’s provincial Budget, eligible busines...
ON - 2018-19 Budget changes affecting seniors enacted The Ontario government recently enacted legislation to implement announcements made in this year’s provincial budget. Those announcements include two changes affecting seniors in the province, as fo...
ON - Increased consumer access to credit reporting information The provincial government has announced changes that will provide Ontario residents with increased access to personal information held by credit reporting agencies.
Under the new rules, certain credit...
ON - Filing a tax return to receive provincial benefits for 2018-19 The province of Ontario provides a number of tax credits to individual residents of the province, and those benefits are paid on monthly basis. The next benefit year will start in July 2018 and run un...
ON - Province increases charitable donation tax credit In this year’s Budget, the provincial government announced that the non-refundable tax credit provided to taxpayers who make qualifying donations to charity would be increased.
The credit is a two-l...
ON - Interest Rates - 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province announces date for 2018-19 Budget The provincial government has announced that Ontario’s 2018-19 Budget will be brought down by the Minister of Finance on Wednesday, March 28 at around 4 p.m.
Once the Budget is announced, the Budget...
ON - Personal tax credit amounts for 2018 The province of Ontario will provide the following personal tax credit amounts for 2018:
Basic personal amount ………………………………… $10,354
Spouse or equivalent to spouse amount ...
ON - Province releases third-quarter fiscal results for 2017-18 The release of Ontario’s Third Quarter Finances report indicates that the province remains on track to balance the budget for the 2017-18 fiscal year, although the amount of the projected surplus ha...
ON - Personal income tax rates and brackets for 2018 For the 2018 tax year, the province of Ontario will levy personal income tax based on the following tax rates and brackets.
05% on taxable income between $10,354 and $42,960;
15% on taxable income bet...
ON - Payment dates for Ontario Trillium Benefit for 2018 The province of Ontario provides a number of refundable tax credits to individual residents of the province. Several of those credits are combined and paid as a single monthly benefit — the Ontario ...
ON - Consultation process for 2018-19 provincial Budget announced The government of Ontario has announced the launch of its pre-budget consultation process leading to the release of the province’s 2018-19 Budget.
That budget consultation process has several compon...
ON - CRA releases 2017 T1 tax return form for Ontario residents The Canada Revenue Agency has released the 2017 T1 Individual Income Tax Return and Benefit form to be used by individuals who were residents of Ontario at the end of that year. The T1 form package (w...
ON - Interest Rates – 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - 2018 Ontario TD1 Form and TD1 Worksheet released The Canada Revenue Agency has issued the Ontario TD1 form and worksheet which will be used by taxpayers resident in the province, and their employers, to determine required provincial income tax sourc...
ON - Changes enacted to provincial employment standards The Ontario government has enacted a number of changes to the province’s employment standards laws, and those changes include the following:
the Ontario minimum wage will increase to $14 per hour on...
ON - Apprenticeship training tax credit eliminated The province of Ontario provided employers who hired and trained eligible apprentices in designated construction, industrial and motive power, and certain service trades with a refundable tax credit, ...
ON - Province to reduce small business tax rate in 2018 In the 2017 Economic and Fiscal Review issued on November 14, Ontario’s Minister of Finance announced that the provincial small business tax rate would be reduced, effective as of January 1, 2018, f...
Since the beginning of the pandemic in March 2020, the federal government has provided a wide range of pandemic benefit programs for individuals. In the main, those programs have acted to replace income lost where employment income was no longer available as businesses closed during lockdowns, or individuals were unable to work because of illness or because they were at home with young children when schools closed to in-person learning.
Since the beginning of the pandemic in March 2020, the federal government has provided a wide range of pandemic benefit programs for individuals. In the main, those programs have acted to replace income lost where employment income was no longer available as businesses closed during lockdowns, or individuals were unable to work because of illness or because they were at home with young children when schools closed to in-person learning.
As the pandemic waxed and waned over the past two years, pandemic benefit programs offered by the federal government for individual Canadians have been introduced, amended, and replaced, to fit the changing circumstances. Those ongoing changes have made it difficult for individuals to know, at any given time, what benefits are available to them, what the eligibility criteria for those benefits are, and, perhaps most critically, the deadline(s) by which application for such benefits must be made.
As of April 2022, there are three major federal pandemic programs still in existence: the Canada Recovery Sickness Benefit, the Canada Recovery Caregiver Benefit, and the Canada Worker Lockdown Benefit. Each has its own eligibility criteria and benefit amount obtainable, as outlined below.
Canada Recovery Sickness Benefit
As the name implies, the Canada Sickness Recovery Benefit (CRSB) is provided to individuals who have been unable to work due to COVID-19. That inability to work can arise because the person had COVID-19, was advised to self-isolate, or had an underlying health condition that put them at higher risk of contracting COVID-19.
The CRSB provides such individuals with a flat amount of $500 per week, for a week in which the individual was unable to work at least 50% of their normal work week. The benefit amount of $500 per week does not depend in any way on the amount of income the individual normally earns; however, in order to qualify, the individual must have earned at least $5,000 in the previous 12 months, or during 2019, 2020, or 2021.
The CRSB is payable for a maximum of six weeks, such that the maximum benefit receivable is $3,000.
Canada Recovery Caregiving Benefit
Millions of Canadians, while not ill themselves, lost income during the pandemic because they were needed to stay at home to care for children or other family members who required supervised care.
The Canada Recovery Caregiving Benefit (CRCB) provides income support to such individuals who were employed or self-employed. In order to qualify for the CRCB, individuals must have been unable to work because they were at home caring for their child who was under age 12 or another family member who needed such supervised care. Such at-home care must have been required because the school, regular program, or facility attended by the individual requiring care was closed or unavailable due to the pandemic, or because the person requiring care was sick, self-isolating, or at risk of serious health complications due to COVID-19. In addition, the applicant for the CRCB must have been unable to work at least 50% of their normal work week and he or she must have earned at least $5,000 in the previous 12 months, or during 2019, 2020, or 2021.
Like the CRSB, the CRCB pays eligible individuals a flat amount of $500 per week. Unlike the CRSB, however, the CRCB program will provide a weekly benefit to eligible individuals for a period of up to 44 weeks.
Canada Worker Lockdown Benefit
The Canada Worker Lockdown Benefit (CWLB) differs in a number of ways from the CRSB and the CRCB. The latter two benefits are available in all provinces and territories, with eligibility for such benefits based entirely on personal circumstances. In the case of the CWLB, however, eligibility depends, in the first instance, on the public health situation in an individual’s province of residence (or sometimes, on their location within a province or territory) at any given time.
The reason for the difference is that the CWLB is intended to help compensate individuals who have lost income due to public health orders issued in response to current pandemic conditions, and currently in force in their particular place of residence and work. Such orders can, of course, vary widely from place to place.
In order to be eligible for the CWLB, an individual must have earned at least $5,000 in the previous 12 months or in either 2020 or 2021. In addition, an applicant must have filed a tax return for the 2020 tax year and must also commit to filing his or her returns for 2021 and 2022 by the end of 2023. Additional eligibility conditions may also apply, and a list of those conditions can be found at https://www.canada.ca/en/revenue-agency/services/benefits/worker-lockdown-benefit/cwlb-who-apply.html.
The CWLB is $300 per week and there is no limit to the number of weeks during which benefits can be received. However, such benefits are only available during time periods when the area or province or territory in which an individual lives is designated as a COVID-19 lockdown region. In addition, such lockdown must have resulted in an individual losing his or her job, or experiencing a 50% reduction in average weekly income, as compared to the previous year.
Making the application – critical dates and deadlines
It’s critical to remember that an application for benefits under the CRSB, CRCB, or the CWLB programs can be made up to 60 days after the end of a benefit week/period. Consequently, as of April 26, benefit applications still be made for any benefit period starting after February 19, 2022.
That 60-day application period is particularly important when it comes to the CWLB. As of April 26, there are no regions of Canada which are currently designated as COVID-19 lockdown regions. However, with the exception of British Columbia, Saskatchewan, Manitoba, and New Brunswick, and some areas of Québec and the Northwest Territories, all other provinces and territories were subject to such designation within the last 60 days, meaning that eligible applicants can still apply for CWLB benefits for those time periods. A listing of the COVID-19 lockdown designation periods for each province and territory (or locations within a province or territory) can be found on the federal government website at https://www.canada.ca/en/services/benefits/designated-covid-19-lockdown-regions.html.
The other critical date to be aware of is May 7, 2022: as of that date (under existing legislation), each of the CRSB, CRCB, or CWLB programs will come to an end. Notwithstanding, the 60-day rule for applications will continue, meaning that applications for benefits can still made, as long as the usual eligibility criteria are met and no more than 60 days has passed since the end of the particular benefit period for which the application is being made.
While the number and variety of benefit programs and varying eligibility and application criteria can be confusing, the federal government has provided a comprehensive summary on its website of the rules governing these programs. That summary is available at https://www.canada.ca/en/department-finance/economic-response-plan.html#individuals.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Canada’s retirement income system has three major components – private savings through registered retirement savings plans or registered pension plans, and two public retirement income plans – the Canada Pension Plan and the Old Age Security program. The last of those – the Old Age Security program – is the only aspect of Canada’s retirement income system which does not require a direct contribution from recipients of program benefits. Rather, the OAS program is funded through general tax revenues, and eligibility to receive OAS is based solely on Canadian residency. Anyone who is 65 years of age or older and has lived in Canada for at least 40 years after the age of 18 is eligible to receive the maximum benefit. For the second quarter of 2022 (April to June 2022), that maximum monthly benefit is $648.67.
Canada’s retirement income system has three major components – private savings through registered retirement savings plans or registered pension plans, and two public retirement income plans – the Canada Pension Plan and the Old Age Security program. The last of those – the Old Age Security program – is the only aspect of Canada’s retirement income system which does not require a direct contribution from recipients of program benefits. Rather, the OAS program is funded through general tax revenues, and eligibility to receive OAS is based solely on Canadian residency. Anyone who is 65 years of age or older and has lived in Canada for at least 40 years after the age of 18 is eligible to receive the maximum benefit. For the second quarter of 2022 (April to June 2022), that maximum monthly benefit is $648.67.
For many years, OAS was automatically paid to eligible recipients once they reached the age of 65. However, beginning in July 2013 Canadians who are eligible to receive OAS benefits have been able to defer receipt of those benefits for up to five years, to when they turn 70 years of age. For each month that an individual Canadian defers receipt of those benefits, the amount of benefit eventually received increases by 0.6%. The longer the period of deferral, the greater the amount of the monthly benefit eventually received. Where receipt of OAS benefits is deferred for a full 5 years, until age 70, the monthly benefit received is increased by 36%.
It can, however, be difficult to determine, on an individual basis, whether and to what extent it would make sense to defer receipt of OAS benefits. Some of the difficulty in deciding whether to defer – and for how long – lies in the fact there are no hard and fast rules, and the decision is entirely dependent on each individual’s financial circumstances. Fortunately, however, there are a number of factors which each individual can consider when making that decision.
The first such factor is how much total income will be required, at the age of 65, to finance current needs. By that age many (although not all) Canadians are no longer making mortgage payments or saving for retirement and so the amount of income needed is reduced. It’s also necessary to determine what other sources of income (employment income from full- or part-time work, Canada Pension Plan retirement benefits, employer-sponsored pension plan benefits, annuity payments and withdrawals from registered retirement savings plans (RRSPs) and registered retirement income fund (RRIFs)) are available to meet those needs, both currently and in the future, and when receipt of those income amounts can or will commence or cease. Once income needs and the sources and possible timing of each is clear, it’s necessary to consider the income tax implications of the structuring and timing of those sources of income. The ultimate goal, as it is at any age, is to ensure sufficient income to finance a comfortable lifestyle while at the same time minimizing both the tax bite and the potential loss of tax credits.
In making those calculations, the following income tax thresholds and benefit cut-off figures (for 2022) are a starting point.
Income in the first federal tax bracket is taxed at 15%, while income in the second bracket is taxed at 20.5%. For 2022, that second income tax bracket begins when taxable income reaches $50,197.
The Canadian tax system provides a non-refundable tax credit of $7,898 for taxpayers who are age 65 or older at the end of the tax year. The amount of that credit is reduced once the taxpayer’s net income for the year exceeds $39,826.
Individuals can receive a GST/HST refundable tax credit, which is paid quarterly. For 2022, the full credit is payable to individual taxpayers whose family net income is less than $39,826.
Taxpayers who receive Old Age Security benefits and have income over a specified amount are required to repay a portion of those benefits, through a mechanism known as the “OAS recovery tax”, or “clawback”. Taxpayers whose income for 2022 is more than $81,761 will have a portion of their future OAS benefits “clawed back”.
What other sources of income are currently available?
More and more, Canadians are not automatically leaving the work force at the age of 65. Those who continue to work at paid employment and whose employment income is sufficient to finance their chosen lifestyle may well prefer to defer receipt of OAS. Similarly, a taxpayer who begins receiving benefits from an employer’s pension plan when he or she turns 65, may be in a financial position which enables him or her to postpone receipt of OAS benefits.
Is the taxpayer eligible for Canada Pension Plan retirement benefits, and at what age will those benefits commence?
Nearly all Canadians who were employed or self-employed after the age of 18 paid into the Canada Pension Plan and are eligible to receive CPP retirement benefits. While such retirement benefits can be received as early as age 60, receipt can also be deferred and received any time up to the age of 70. As is the case with OAS benefits, CPP retirement benefits increase with each month that receipt of those benefits is deferred. Taxpayers who are eligible for both OAS and CPP will need to consider the impact of accelerating or deferring the receipt of each benefit in structuring retirement income.
Does the taxpayer have private retirement savings through an RRSP?
Taxpayers who were not members of an employer-sponsored pension plan during their working lives generally save for retirement through a registered retirement savings plan (RRSP). While taxpayers can choose to withdraw amounts from such plans at any age, they are required to collapse their RRSPs by the end of the year in which they turn 71, and to then begin receiving income from those savings. There are a number of options available for structuring that income, and, whatever the option chosen (usually, converting the RRSP into a registered retirement income fund or RRIF, or purchasing an annuity) will mean that the taxpayer will begin receiving income amounts from those RRSP funds in the following year. Taxpayers who have significant retirement savings in RRSPs should, in determining when to begin receiving OAS benefits, consider that they will have an additional (taxable) income amount for each year after they turn 71.
The ability to defer receipt of OAS benefits does provide Canadians with more flexibility when it comes to structuring retirement income. The price of that flexibility is increased complexity, particularly where, as is the case for most retirees, multiple sources of income and the timing of each of those income sources must be considered, and none can be considered in isolation from the others.
Individuals who are facing that decision-making process will find some assistance on the Service Canada website. That website provides a Retirement Income Calculator, which, based on information input by the user, will calculate the amount of OAS which would be payable at different ages. The calculator will also determine, based on current RRSP savings, the monthly income amount which those RRSP funds will provide during retirement. To use the calculator, it is necessary to know the amount of Canada Pension Plan benefit which will be received, and the taxpayer can obtain that information by calling Service Canada at 1-800 277-9914.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The difficulties faced by younger Canadians in buying a first home almost anywhere in Canada, owing to both the spiraling cost of real estate and, more recently, increases in interest rates, is a major concern for those individuals and their families. Not surprisingly, then, the issue of housing affordability was a major focus of the recent federal budget, and the following measures to address that problem were announced.
The difficulties faced by younger Canadians in buying a first home almost anywhere in Canada, owing to both the spiraling cost of real estate and, more recently, increases in interest rates, is a major concern for those individuals and their families. Not surprisingly, then, the issue of housing affordability was a major focus of the recent federal budget, and the following measures to address that problem were announced.
Tax-Free First Home Savings Account
The most significant housing affordability measure announced in the budget was the creation of a new program – the Tax-Free First Home Savings Account (FHSA) which, as the name implies, allows first time home buyers to save (within prescribed limits) toward the purchase of a first home.
Under the program terms, any resident of Canada who is at least 18 years of age and who has not lived in a home which he or she owns in any of the current or four previous years can open an FHSA and contribute to that plan annually.
Beginning in 2023, planholders will be able to contribute up to $8,000 per year to their plan, regardless of their income for that year. The $8,000 per year contribution limit cannot be carried over to future years – in other words, if a planholder makes less than the maximum allowable contribution in any year, his or her contribution limit for subsequent years is still $8,000. As well, there is a lifetime limit of $40,000 in contributions for each individual.
The real benefit of the FHSA program lies in the tax treatment of contributions. Individuals who contribute any amount in a year can deduct that amount from income, in the same manner as a registered retirement savings plan contribution. As well, investment income of any kind which is earned by contributed funds held in the plan is not taxed as it is earned. Finally, when the planholder withdraws funds from the plan to purchase a first home, those withdrawal amounts – representing both original contributions and investment income earned by those contributions – are not taxed.
Given the generous tax treatment accorded contributions to an FHSA, there are inevitably some qualifications and restrictions placed on the use of the plans. First, amounts withdrawn from an FHSA are received tax-free only if those funds are used to make a qualifying home purchase. Amounts withdrawn and used for any other purpose are fully taxable.
Individuals who open an FHSA have 15 years from the date the plan is opened to use the funds for a qualifying home purchase. While this does place some pressure on planholders with respect to the timing of their home purchase, there is some flexibility. Specifically, planholders who have not made a qualifying home purchase within the required 15-year time frame must then close the FHSA plan, but are allowed to transfer funds held in the FHSA to their RRSP. Significantly, the amount which is transferred from an FHSA to an RRSP isn’t reduced or limited in any way by the individual’s RRSP contribution room. However, transfers made to an RRSP in these circumstances do not replenish FHSA contribution room – in other words, each eligible individual gets only one opportunity to save for a first-time home purchase using an FHSA. And, of course, any amounts transferred from an FHSA to an RRSP will be taxable on withdrawal, in the same way as any other RRSP withdrawal.
Finally, individuals who have managed to accumulate funds within an RRSP will be allowed to transfer (subject to the $8,000 annual and $40,000 lifetime contributions limits) such funds to an FHSA on a tax-free basis, where they would then be subject to the usual rules governing an FHSA. Such individuals would not, however, be entitled to replace those funds within the RRSP.
Our tax system already provides a means to save for home ownership on a tax-assisted basis – the Home Buyers’ Plan (HBP). Under that Plan, an individual can withdraw up to $35,000 from his or her RRSP and use those funds for the purchase of a first home. Any such funds withdrawn must then be repaid to the RRSP over the next 15 years. The Home Buyers’ Plan will continue to be available to Canadians – however, an individual will not be permitted to make both an FHSA withdrawal and an HBP withdrawal in respect of the same qualifying home purchase.
First-Time Home Buyers’ Tax Credit
First time home buyers in Canada can already claim a non-refundable federal tax credit of up to $750 (which can be shared between spouses) when purchasing a home which they will occupy as a principal residence.
The budget proposes to increase the amount of that Home Buyers’ Tax Credit to $1,500, and spouses and common-law partners will continue to be able to split the value of the credit.
The increase applies to acquisitions of a qualifying home made after 2021.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
For the majority of Canadians, the due date for filing of an individual tax return for the 2021 tax year was Monday May 2, 2022. (Self-employed Canadians and their spouses have until Wednesday June 15, 2022 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and tax result obtained by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.
For the majority of Canadians, the due date for filing of an individual tax return for the 2021 tax year was Monday May 2, 2022. (Self-employed Canadians and their spouses have until Wednesday June 15, 2022 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and tax result obtained by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.
By April 11, 2022, just over 13 million individual income tax returns for the 2021 tax year had been filed with the Canada Revenue Agency. And, inevitably, some of those returns contain errors or omissions that must be corrected.
Over 93% of the returns which have already been filed for the 2021 tax year were filed through online filing methods, meaning that they were prepared using tax return preparation software. The use of such software significantly reduces the chance of making a clerical or arithmetic error, like entering an amount on the wrong line or adding a column of figures incorrectly. However, no matter how good the software, it can work only with the information that is provided to it. Sometimes taxpayers prepare and file a return, only to later receive a tax information slip that should have been included on that return. It’s also easy to make an inputting error when transposing figures from an information slip (a T4 from one’s employer, for instance) into the software, such that $69,206 in income becomes $62,906. Whatever the cause, where the figures input are incorrect or information is missing, those errors or omissions will be reflected in the final (incorrect) result produced by the software.
When the error or omission is discovered in a return which has already been filed, the question which immediately arises is how to make things right. The first impulse of many taxpayers is to file another return, in which the complete and correct information is provided, but that’s not the right answer. There are, however, several ways in which a mistake or omission on an already filed tax return can be corrected, including online options.
Essentially, taxpayers whose returns have been filed online (through NETFILE or EFILE) can make a correction using the same tax return preparation software that was used to prepare the return. Those taxpayers who used NETFILE to file their return can file an adjustment to a return filed for the 2018, 2019, 2020, and 2021 tax years. Where the return was filed using EFILE, the EFILE service provider can similarly file adjustments for returns filed for the 2018, 2019, 2020, or 2021 tax years.
There are limits to the ReFILE service. Regardless of who is using the service (i.e., the taxpayer or an EFILE service provider) the online system will accept a maximum of nine adjustments to a single return, and ReFILE cannot be used to make changes to personal information, like the taxpayer’s address or direct deposit details. There are also some types of tax matters which cannot be handled through ReFILE, like applying for a disability tax credit or child and family benefits.
It’s also possible to make a change or correction to a return using the CRA’s “My Account” service (through the “Change My Return” feature), but that choice is available only to taxpayers who have already become registered for My Account. Taxpayers who opt to become registered for My Account in order to access the broader options available through Change My Return should be aware that the registration process takes a few weeks, in order to satisfy the CRA’s security measures.
While using the CRA’s online services, whether through ReFILE or My Account, is certainly the fastest way to make a correction on an already-filed return, taxpayers who don’t wish to use an online method do still have a paper option. The paper form to be used is Form T1-ADJ E (20), which can be found on the CRA website at T1-ADJ T1 Adjustment Request – Canada.ca. Those who are unable to print the form off the website can order a copy to be sent to them by mail by calling the CRA’s individual income tax enquiries line at 1-800-959-8281. There is no limit to the number of changes or corrections which can be made using the T1-ADJ E (20) form.
Hard copy of a T1-ADJ (20) (or a letter) is filed by sending the completed document to the appropriate Tax Center, which is the one with which the tax return was originally filed. A listing of Tax Centres and their addresses can be found on the reverse of the TD-ADJ (20) form. A taxpayer who isn’t sure which Tax Centre their return was filed with can go to https://www.canada.ca/en/revenue-agency/corporate/contact-information/tax-services-offices-tax-centres.html on the CRA website and select their location from the drop-down menu found there. The address for the correct Tax Centre will then be provided.
Where a taxpayer discovers an error or omission in a return already filed, the impulse is to correct that mistake as soon as possible. However, no matter which method is used to make the correction – ReFILE, My Account, or the filing of a T1-ADJ in hard copy – it’s necessary to wait until the Notice of Assessment for the return already filed is received. Corrections to a return submitted prior to the time that return is assessed simply can’t be processed by the CRA.
Once the Notice of Assessment is received, and an adjustment request is made, it will take at least a few weeks, usually longer, before the CRA responds. The CRA’s goal is to respond to such requests that are submitted online within about two weeks, while those which come in by mail currently (as of April 2022) take about ten to twelve weeks. Not unexpectedly, requests which are submitted during the CRA’s peak return processing period between March and July will likely take longer.
Sometimes the CRA will contact the taxpayer, even before a return is assessed, to request further information, clarification, or documentation of deductions or credits claimed (for example, receipts documenting medical expenses claimed, or child care costs). Whatever the nature of the request, the best course of action is to respond promptly, and to provide the requested documents or information. The CRA can assess only on the basis of the information with which it is provided, and it is the taxpayer’s responsibility to provide support for any deduction or credit claims made. Where a request for information or supporting documentation for a claimed deduction or credit is ignored by the taxpayer, the assessment will proceed on the basis that such support does not exist. Providing the requested information or supporting documentation can usually resolve the question to the CRA’s satisfaction, and its assessment of the taxpayer’s return can then be completed.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
It is a sad fact that, every year, thousands of Canadians become the victims of scams in which fraud artists claim to be representatives of the federal government. Equally sadly, in most cases the money lost is never recovered.
It is a sad fact that, every year, thousands of Canadians become the victims of scams in which fraud artists claim to be representatives of the federal government. Equally sadly, in most cases the money lost is never recovered.
While fraud has always and will always exist, this time of year provides a perfect opportunity for scams, particularly those involving our tax system, for a number of reasons. First, of course, it’s tax-filing season, a time of year when receiving communications from the tax authorities wouldn’t strike most Canadians as being out of place, or suspicious – and when, in fact, the tax authorities do communicate with taxpayers for valid reasons. Second, most tax returns filed by individual Canadians result in the payment of a tax refund. Consequently, receiving an email or other communication indicating that the CRA has funds which are owed to you wouldn’t necessarily strike most recipients as a scam. As well, over the course of the past two pandemic years, many day-to-day financial dealings have had to be managed online or by phone, opening up opportunities for fraudsters to misrepresent themselves as government officials or government websites. All in all, it’s a perfect storm of opportunity for scammers and fraudsters.
Generally, there are two basic ways in which tax fraud artists prey on taxpayers. In a scam which has been around for years, if not decades, a telephone caller falsely informs the taxpayer that he or she owes money to the Canada Revenue Agency and that immediate payment must be made. A failure to pay, the taxpayer is told, will mean seizure of his or her assets, cancellation of his or her passport and/or social insurance card or other government-issued identification, deportation, or imprisonment. Further, such payment must be made only by wire transfer or pre-paid credit card or cryptocurrency. In a second type of scam, which is more common at this time of year, the taxpayer is contacted by e-mail or text and advised that he or she is owed money by the federal government. In order to receive the money owed, the taxpayer must click on a link in that e-mail or text. The link leads, not to a federal government website, but to a “dummy” site very closely resembling the actual Canada Revenue Agency website. The taxpayer must then, in order to have his or her “refund” processed, provide personal and financial information which can then be used by the tax scammer. A taxpayer may also be contacted by phone, told falsely that he or she is owed money by the CRA and asked to provide details – like a bank account number – so that the “refund” can be deposited to the taxpayer’s account.
There are, in fact, several things about such communications that should alert the recipient to the fact that they are not legitimate. First of all, if a taxpayer does owe money to the CRA, or is owed money by the CRA, he or she will be first advised of that fact in the Notice of Assessment issued by the CRA for every tax return that is filed – and never by telephone, email, or text. Second, the CRA would never suggest or require that a taxpayer send funds to the Agency by wire transfer or by using a prepaid credit card or cryptocurrency, and would never ask a taxpayer to click on a link in an email or text, or to provide financial details over the phone. Payments of money owed to the CRA are made online, through the CRA website, through the taxpayer’s financial institution (in person or online), or by mailing a cheque to the Agency. Any payment by the CRA to the taxpayer is made by direct deposit to a taxpayer’s bank account (using an already existing direct deposit arrangement), or by cheque, which is sent to the taxpayer by regular mail. Finally, any suggestion that the CRA would (or could) cancel a taxpayer’s passport or other government-issued ID for failure to make payment is simply ludicrous.
Although these scams are well known (and new ones appear frequently and are noted on the CRA website at https://www.canada.ca/en/revenue-agency/corporate/security/protect-yourself-against-fraud.html), many such scams originate outside Canada, limiting the ability of the CRA and law enforcement authorities to monitor or stop them. For the most part, therefore, the onus will fall on individual taxpayers to protect themselves through a healthy degree of caution, even skepticism. At the end of day, the best protection from being scammed is being aware of the methods by which the CRA will (and, more importantly, will not) contact a taxpayer – in other words, being able to recognize when a scam attempt is being made.
The CRA suggests that, in order to avoid becoming a victim of such scams, taxpayers should keep the following general guidelines in mind.
A legitimate CRA employee will identify themselves when they contact you. The employee will give you their name and a phone number. Make sure the caller is a CRA employee before you give any information over the phone.
If you’re suspicious, this is how you can make sure the caller is from the CRA:
Tell the caller you would like to first verify their identity.
Request and make a note of their name, phone number, and office location.
End the call. Then check that the information provided during the call was legitimate by calling the CRA’s individual income tax enquiries line at 1-800-959-8281.
Similarly, where a caller claiming to be from the CRA leaves a voice mail the taxpayer should, instead of returning that call, call the 1-800 number above. Service agents at that line will be able to access the taxpayer’s tax records and provide accurate information on whether the Agency is indeed seeking to contact the taxpayer and, if so, for what reason.
Taxpayers should note as well that seeing a CRA 1-800 number or an Ottawa area code on their call display does not necessarily mean that the call is from the CRA. Scammers have been able to use technology to show false numbers on call display, as part of their attempt to seem legitimate.
Red flags that suggest a caller is a scammer include (but are not limited to):
The caller does not give the taxpayer proof that the caller works for the CRA – for example, their name, phone number, and office location.
The caller pressures the taxpayer to act now or uses aggressive language.
The caller asks the taxpayer to pay with prepaid credit cards, gift cards, cryptocurrency, or some other unusual form of payment.
The caller asks for information that the taxpayer would not enter on a tax return or that is not related to money which the taxpayer owes to the CRA – for instance, a credit card number.
The caller says that he or she can help the taxpayer apply for government benefits. Such applications are made directly on Government of Canada websites or by phone – no one should give information to callers offering to apply for benefits on the taxpayer’s behalf.
Ironically, the extent to which most individuals are now comfortable transacting their tax and financial affairs online or over the phone, and the speed and anonymity of such transactions, has made it easier in many ways for fraud artists to succeed. As ever, the best defence against becoming a victim of such fraud artists is by refusing to provide personal or financial information, and especially never to make any kind of payment, whether by phone, e-mail, or online, without first verifying the legitimacy of the request.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
Most taxpayers are, of course, hoping for a refund – the bigger the better. A lot would be happy to find that at least nothing is owed to the Canada Revenue Agency, or that an amount owing is not significant.
The worst-case scenario, for all taxpayers, is to find out that they are faced with a large tax bill and an imminent payment deadline, and that they just don’t have the money to make the required payment by that deadline. For those who don’t have the means to pay a tax bill out of existing resources, that likely means borrowing the needed funds. And, while that will mean paying interest on the borrowing, the interest cost incurred will likely be less than that which would be levied by the Canada Revenue Agency on the unpaid tax bill.
However, if a tax bill can’t be paid in full out of either current resources or available credit, the Canada Revenue Agency is open to making a payment arrangement with the taxpayer. While, like most creditors, the CRA would rather get paid on time and in full, its ultimate goal is to collect the full amount of taxes owed. Consequently, the Agency provides taxpayers who simply can’t pay their bill for the year on time and in full with the option of paying an amount owed over time, through a payment arrangement.
There are two avenues available to taxpayers who want to propose such a payment arrangement. The first is a call to the CRA’s automated TeleArrangement service at 1-866-256-1147. When making such a call, it is necessary for the taxpayer to provide his or her social insurance number, date of birth, and the amount entered on line 150 of the last tax return for which the taxpayer received a Notice of Assessment. For taxpayers who are up to date on their tax filings, that will be the Notice of Assessment for the return for the 2020 tax year. The TeleArrangement Service is available Monday to Friday, from 7 a.m. to 10 p.m., Eastern time.
Taxpayers who would rather speak directly to a CRA employee can call the Agency’s debt management call centre at 1-888-863-8657 or can complete an online form (available at https://apps.cra-arc.gc.ca/ebci/iesl/showClickToTalkForm.action) requesting a callback from a CRA agent.
The CRA also provides on online tool, in the form of a Payment arrangement calculator (available at Payment Arrangement Calculator - Canada.ca), which allows the taxpayer to calculate different payment proposals, depending on his or her circumstances. That calculator includes interest charges since, no matter what payment arrangement is made, the CRA levies interest charges on any amount of tax owed for the 2021 tax year which is not paid on or before May 2, 2022. Interest charges levied by the CRA tend to add up quickly, for two reasons. First, the interest charged by the CRA on outstanding tax amounts is, by law, higher than current commercial rates – the rate charged from April 1 to June 30, 2022 is 5.0%. Second, interest charges levied by the CRA are compounded daily, meaning that each day interest is levied on the previous day’s interest charges. It is for these reasons that a taxpayer is, where at all possible, likely better off arranging private borrowing in order to pay any taxes owing by the May 2, 2022 deadline.
Unfortunately, this year many taxpayers may be facing what might be termed a “tax hangover”. During 2020, millions of Canadian taxpayers applied for and received pandemic-related benefits. And, although those benefits represent taxable income to the recipients, no tax was deducted from the payments when they were made. Consequently, many benefit recipients, on filing their returns for the 2020 tax year in the spring of 2021, faced a larger than expected tax bill for 2020. In recognition of that fact, and the ongoing economic dislocation resulting from the pandemic, the Canada Revenue Agency provided some relief in the form of a one-year interest holiday. Specifically, taxpayers who received pandemic-related benefits during 2020, and whose income for that year was $75,000 or less, were not assessed interest charges on 2020 tax amounts which were owed but not paid in full by the deadline. Unfortunately for such taxpayers, that interest holiday ends on April 30, 2022. If outstanding tax amounts owed for 2020 are not paid by that date, the CRA will begin assessing interest charges on the debt. And, as outlined above, those interest charges will be levied at a rate of 5% – with interest compounded daily. Details of the interest holiday program and how outstanding amounts owed will be treated after April 30, 2022 can be found on the CRA website at https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/covid19-taxes/interest-relief.html.
Finally, regardless of the taxpayer’s circumstances, there is one strategy which is, in all circumstances, a bad one. Taxpayers who can’t pay their tax bill by the deadline sometimes conclude that there is no point in filing if payment can’t be made. Those taxpayers are wrong. Where an amount of tax is owed and the return isn’t filed on time, there is an immediate tax penalty imposed of 5% of the outstanding tax amount – and interest charges start accruing on that penalty amount (as well as on the outstanding tax balance) immediately. For each month that the return isn’t filed, a further penalty of 1% of the outstanding tax amount is charged, to a maximum of 12 months. Higher penalty amounts are charged, for a longer period, where the taxpayer has incurred a late-filing penalty within the past three years. In a worst-case scenario, the total penalty charges can be 50% of the tax amount owed – and that doesn’t count the compound interest which is levied on all penalty amounts, as well as on all unpaid taxes. In all cases, no matter what the circumstances, the right answer is to file one’s tax return on time. This year, for most taxpayers, that means filing on or before Monday May 2, 2022. For self-employed taxpayers (and their spouses) the filing deadline is Wednesday June 15, 2022. However, for all taxpayers, the payment deadline for all 2021 income tax amounts owed is Monday May 2, 2022.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Our tax system is complex and, understandably, its myriad rules and exceptions are a mystery to most Canadian taxpayers – and most are happy to leave it that way. There is however, one rule in the Canadian tax system which doesn’t really have any exceptions and of which most Canadian taxpayers are all too well aware. That is the rule that says individual income tax amounts owed for any tax year must be paid – in full – on or before April 30 of the following calendar year. This year, that means April 30, 2022 – although, since April 30, 2022 falls on a Saturday, the Canada Revenue Agency is providing an administrative concession by allowing taxpayers until Monday May 2 to pay their taxes without incurring any interest charges.
Our tax system is complex and, understandably, its myriad rules and exceptions are a mystery to most Canadian taxpayers – and most are happy to leave it that way. There is however, one rule in the Canadian tax system which doesn’t really have any exceptions and of which most Canadian taxpayers are all too well aware. That is the rule that says individual income tax amounts owed for any tax year must be paid – in full – on or before April 30 of the following calendar year. This year, that means April 30, 2022 – although, since April 30, 2022 falls on a Saturday, the Canada Revenue Agency is providing an administrative concession by allowing taxpayers until Monday May 2 to pay their taxes without incurring any interest charges.
It is very much in the CRA’s interest to make paying taxes as simple and as straightforward as it can be and so the Agency offers individual taxpayers a wide range of choices when it comes making that payment. There are, in fact, no fewer than seven separate options available to individual residents of Canada in paying their taxes for the 2021 tax year. The first four options outlined below involve payment by electronic means, while the last three describe those available to taxpayers who would prefer to make their payments in person, or by sending a cheque to the CRA.
Pay using online banking
Millions of Canadians transact most or all of their banking using the online services of their particular financial institution. The list of financial institutions through which a payment can be made to the Canada Revenue Agency is a lengthy one (available at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-online-banking.html), and includes all of Canada’s major banks and credit unions.
The specific steps involved in making that payment will differ slightly for each financial institution, depending on how their online payment systems are configured. What’s important to remember is that the nature of the payment – i.e., current year tax return, as distinct from current year tax instalment payments – must be specified, and the taxpayer’s social insurance number must be provided, in order to ensure that the payment is credited to the correct account, for the correct taxation year.
It’s not necessary to access any particular CRA form in order to make an online payment of taxes through one’s financial institution.
Using the CRA’s My Payment
The CRA also provides an online payment service called My Payment. There is no fee charged for the service, and it’s not necessary to be registered for any of the CRA’s other online services in order to use My Payment.
What is necessary is that the taxpayer have an activated debit card with an Interac Debit, VISA Debit, or Debit MasterCard logo from a participating Canadian financial institution, as My Payment is set up to accept payment using only those cards. Anyone intending to use My Payment should also confirm that the amount of any payment to be made is within the transaction limits imposed by the particular financial institution.
Payment by credit card, PayPal, or Interac e-transfer
While it’s possible to pay one’s taxes using a credit card, PayPal, or Interac e-transfer, such payments can only be made through third-party service providers (that is, payments by those methods cannot be made directly to the Canada Revenue Agency), and such third party service providers will impose a fee for the service.
It’s possible to set up a pre-authorized debit (PAD) arrangement with the CRA, authorizing the Agency to debit the account for an amount of taxes owed, on dates specified by the taxpayer.
Individuals who make instalment payments of tax throughout the year may already have such an arrangement in place and can certainly use that existing arrangement to arrange a PAD of any balance of taxes owed for the 2021 tax year. However, any such arrangement must be made at least five business days before the payment due date of May 2. A taxpayer who makes a payment of taxes only once a year is likely better off using another of the available payment methods.
There is also another option for taxpayers who have their return prepared and E-FILED by an authorized electronic filer. Such taxpayers can have that E-FILER set up a PAD agreement on their behalf in order to make a “one-time” payment for a current year tax amount owed. Such an arrangement is only for the payment of a current year tax balance, and can’t be used for other payments like instalment payments of tax. Details on how to set up a pre-authorized debit arrangement, whether for a single payment or for recurring payments, are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.
Paying in person at your financial institution
For those who don’t use online banking, or simply prefer to make a payment in person, it’s possible to pay a tax amount owed at the bank. Doing so, however, requires that the taxpayer have a specific personalized remittance form – the T7DR, Amount owing Remittance Voucher
All Canada Post outlets can receive payments of individual income tax balances owed, in cash or by debit card. Once again, however, it’s necessary to have a specific form to do so.
In this case, the taxpayer must have a QR code which contains the information needed for the CRA to credit the amount paid to the taxpayer’s account.
Such cheques are made payable to the Receiver-General of Canada, and are mailed, together with the required remittance form, to the Canada Revenue Agency, using the address found on the back of the payment remittance form. As is the case with payments made at a financial institution, the taxpayer can print such a remittance form from the CRA’s website. Instructions on how to do so can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.
The CRA also suggests that, where payment of taxes owing is made by cheque, the taxpayer should include his or her social insurance number on the memo line found on the front of the cheque. Doing so will help ensure that the payment is credited to the correct account.
A decision on what method to use to pay one’s taxes includes another important consideration of which most taxpayers are unaware. Under longstanding Canada Revenue Agency policy, the CRA considers that a payment is actually made on the date on which it is received by the Agency. However, depending on the payment method chosen, that date of receipt often isn’t the same day the payment is made by the taxpayer, and it can be as much as several days later. And, of course, where payment is made close to the payment deadline, that delay can mean the difference between a timely payment and one that is late and incurs interest charges.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Most Canadians don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2021 ahead of the May 2, 2022 filing deadline.
Most Canadians don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2021 ahead of the May 2, 2022 filing deadline.
While that approach leaves plenty of time to get the return prepared and filed, it also means that the most significant opportunities to reduce or minimize the tax bill for 2021 are no longer available. Almost all such tax planning or saving strategies, in order to be effective for 2021, must have been implemented by the end of that calendar year.
The fact that the clock has run out on most major tax planning opportunities for 2021 doesn’t, however, mean that there are no tax-saving strategies left. At this point, there are a couple of ways to minimize the tax hit for 2021 – by claiming all available deductions and credits on the return and also by making sure that those deductions and credits are structured and claimed in the way which will give the taxpayer the greatest tax benefit.
In some cases, a claim for a tax deduction or credit can only be made on the return for the year in which the expense is incurred, while in other cases claims can be made for expenses incurred in the previous tax year or even as far back as five years previously. Consequently, getting the best tax result on one’s return requires an assessment of which deductions and credits are available to claim in the current year, whether some or all of them can be carried forward and claimed in a future year, and whether it makes sense to do so. It may seem counterintuitive, or even illogical, to not claim every available deduction and credit in order to obtain the best possible tax result for the year. However, in some cases (albeit for different reasons) there are situations in which it makes sense to defer an available claim to a future year, or to transfer the claim to another family member.
Political contribution tax credit
The federal government provides a non-refundable tax credit for contributions made to registered political parties and to candidates in federal elections. As a federal election was held in 2021, many Canadians may have made contributions which are eligible for that political contribution tax credit.
The restriction, however, is that a claim for that political contribution tax credit can only be made on the return for the year in which the contribution was made. Consequently, taxpayers who made qualifying contributions in 2021 must claim the credit for those contributions on the return for 2021: if that is not done, no credit can be claimed for that contribution on any future return. There is some flexibility, however, in that where one spouse has made a contribution which qualifies for the federal political contribution tax credit, that contribution, and the resulting credit, can be claimed instead by the taxpayer’s spouse on his or her tax return for that year.
Charitable donations
Taxpayers are entitled to make a claim on the annual tax return for charitable donations made in the current (2021) year or any of the previous five years. The reason it can sometimes makes sense not to claim a charitable donation in the year it was made arises from the way in which the charitable donations tax credit is structured to encourage higher donations.
That credit, at both the federal and provincial/territorial levels, is a two-tier credit. Federally, the first $200 in donations receives a credit of 15% of the total donation, or $30. However, donations above the $200 level receive a credit equal to 29% of the donation amount over $200.
Take, for example, a taxpayer who makes a regular contribution to a favourite charity of $100 each month, or $1,200 per year. Where he or she claims that donation on the annual return each year, that claim will result in a federal credit of $320 ($200 times 15%, plus $1,000 times 29%). Where, however, the same taxpayer defers the claim to the following year and claims a total of $2,400 in donations on a single return, he or she will receive a federal credit of $668. ($200 times 15%, plus $2,200 times 29%). Where the donations are accumulated and claimed once every five years, the federal credit received will be $1,712 ($200 times 15%, plus $5,800 times 29%). Under each scenario, the total charitable donation made is the same, but the amount of credit received increases with each year that the claim is deferred. Since each of the provinces and territories provides a two-tier credit (at different rates, depending on the jurisdiction), the same result will be seen when calculating the provincial/territorial credit.
It's important to note as well that charitable donations made by either spouse can be combined and claimed on the return for one of those spouses, thereby increasing the amount of charitable donations available to claim and possibly the amount of credit which can be received.
Medical expenses
Notwithstanding our publicly funded health care system, there are a great (and increasing) number of medical and para-medical expenses for which coverage is not provided and which must be paid on an out-of-pocket basis. In many instances, it’s possible to claim a medical expense tax credit for those out-of-pocket costs.
The federal credit for such expenses is 15% of allowable expenses. As is usually the case, the provinces and territories also provide a credit for the same expenses, albeit at different rates.
Many taxpayers, with some justification, find the rules on the calculation of a medical expense tax credit claim confusing. First, there is an income threshold imposed. Medical expenses eligible for the credit are qualifying expenses which exceed 3% of net income, or (for 2021) $2,421, whichever is less. Put more practically, for 2021 taxpayers who have net income of $80,700 or more can claim medical expenses incurred over $2,421. Those with lower incomes can claim medical expenses which exceed 3% of that lower net income. For instance, a taxpayer having $35,000 in net income could claim qualifying medical expenses incurred over $1,050 (3% of $35,000).
The other aspect of the medical expense tax credit which can be confusing is the calculation of the optimal time period. Unlike most credit claims, the medical expense tax credit can be claimed for qualifying expenses which were paid in any 12-month period ending during the tax year. While confusing, this rule is beneficial, in that it allows taxpayers to select the particular 12-month period during which medical expenses (and therefore the resulting credit claim) is highest. The only restrictions are that the selected 12-month period must end during the calendar year for which the return is being filed and, of course, any expenses which were claimed on a previous return cannot be claimed again.
While only expenses which exceed the $2,421/3% threshold may be claimed, it’s also possible to aggregate expenses incurred within a family and make a single claim for those expenses on the return of one spouse. Specifically, the rules allow families to aggregate medical expenses incurred for each spouse and for all children born in 2004 or later. While medical expenses incurred by a single family member might not be enough to allow him or her to make a claim, aggregating those expenses is very likely (especially for a family that does not have private medical insurance coverage) to mean that total expenses will exceed the applicable threshold.
In determining who will make the medical tax credit claim for a family, there are two points to remember. Since total medical expenses claimable are those which exceed the 3% of net income/$2,421 threshold, whichever is less, the greatest benefit will be obtained if the spouse with the lower net income makes the claim for total family medical expenses. However, the medical expense credit is a non-refundable one, meaning that it can reduce tax otherwise payable, but cannot create (or increase) a refund. Therefore, it’s necessary that the spouse making the claim have tax payable for the year of at least as much as the credit to be obtained, in order to make full use of that credit.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Each year, the Canada Revenue Agency (CRA) publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. Those statistics for last year show that the vast majority of Canadian individual income tax returns — just over 90%, or just over 28 million returns — were filed online, using one or the other of the CRA’s web-based filing methods. About 2.8 million returns — or just over 9% — were paper-filed.
Each year, the Canada Revenue Agency (CRA) publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. Those statistics for last year show that the vast majority of Canadian individual income tax returns — just over 90%, or just over 28 million returns — were filed online, using one or the other of the CRA’s web-based filing methods. About 2.8 million returns — or just over 9% — were paper-filed.
Clearly, electronic filing is the overwhelming choice of Canadian taxpayers, and those who choose electronic filing this year have two choices — NETFILE and E-FILE. The first of those — NETFILE (used last year by just under 33% of tax filers) — involves preparing one’s return using software approved by the CRA and filing that return on the Agency’s website, using the NETFILE service. The second method, E-FILE, involves having a third party file one’s return online. Almost always, the E-FILE service provider also prepares the return which they are filing. It seems that most Canadians want to have little to do with the preparation of their own returns, as last year just over 58% of all the individual income tax returns filed came in by E-FILE.
Those who are able and willing to prepare their own tax returns and file online can use the CRA’s NETFILE service (which is available as of February 21, 2022), and information on that service can be found at http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html. While there are some kinds of returns which cannot be filed using NETFILE (for instance, a return for a non-resident of Canada, or for someone who declared bankruptcy in 2020 or 2021), the vast majority of Canadians who wish to do so will be able to NETFILE their return.
At one time, it was necessary to obtain and provide an access code in order to NETFILE. While such a code is no longer a requirement, the CRA has provided tax filers with a taxpayer-specific code which can be included with the return for 2021. That eight-character alpha-numeric code is found (in very small type) in the top right hand corner of the first page of the 2020 Notice of Assessment, just under the Date Issued line for that Notice of Assessment. Including the code with your return is not mandatory; however, the taxpayer will be able to use information from the 2021 return when confirming their identity with the CRA only if the code was provided on that return.
A return can be filed using NETFILE only where it is prepared using tax return preparation software which has been approved by the CRA. While such software can be found for sale just about everywhere at this time of year, approved software which can be used free of charge, or for a nominal charge, is also available. A listing of free and commercial software approved for use in preparing individual returns for 2021 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/certified-software-netfile-program.html.
Taxpayers who want to obtain hard copy of the tax return and guide package for 2021 can order that package online, at https://apps.cra-arc.gc.ca/ebci/cjcf/fpos-scfp/pub/rdr?searchKey=ncp%20, to be sent to the taxpayer by regular mail. Taxpayers can also download and print hard copy of the return and guide from the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html. Finally, the CRA will have sent, by regular mail, hard copy of the 2021 tax return and guide package to anyone who paper-filed a return for 2020 before November 12, 2021. That package should have arrived by February 21, 2022; taxpayers who should have received such a package but did not can call the CRA Individual Income Tax Enquiries line at 1-800-959-8281 to follow up and, if necessary, to request that a package be sent by mail.
A minority of taxpayers will have the option of filing their returns using a touch-tone telephone. That option, called File my Return service will be available to eligible lower-income Canadians whose returns are relatively simple and whose tax situation remains relatively unchanged from year to year. For such taxpayers, it is important to file, even if there is no income to report, so that they receive the benefits and credits to which they are entitled. The telephone filing option is, however, available only to taxpayers who are advised by the CRA of their eligibility for the File my Return service, and letters advising those individuals of their eligibility were sent out by the CRA in mid-February 2022.
Finally, taxpayers who are not comfortable preparing their own returns, but for whom the cost of engaging a third party to do so is a financial hardship, have another option. During tax filing season, there are a number of Community Volunteer Tax Preparation Clinics where taxpayers can have their returns prepared free of charge by volunteers. Once again this year, most such clinics have had to change their usual in-person operation and adopt alternate methods. Volunteers can prepare an individual’s return, for free, by videoconference, by phone, or through document drop-off. A listing of the available clinics (which is updated regularly throughout the filing season) and their method of operation this tax season can be found on the CRA website at https://www.canada.ca/en/revenue-agency/campaigns/free-tax-help.html.
While there are a number of filing options available to Canadian taxpayers, there’s no element of choice when it comes to the filing and payment deadlines for tax returns for 2021. The deadline for payment of any balance of taxes owed for 2021 is April 30, 2022. As April 30 falls on a Saturday this year, the CRA has announced that payments of 2021 taxes owed will be considered to have been made on time if they are made on or before Monday May 2, 2022. There are no exceptions to this deadline and, absent very unusual circumstances, no extensions are possible.
For the majority of Canadians, the tax return for 2021 must also be filed on or before April 30. Here again, the CRA has extended that deadline to provide that returns will be considered filed on time if they are filed on or before Monday May 2, 2022. Self-employed taxpayers and their spouses have until Wednesday June 15, 2022 to file their returns for 2021 (but they too must pay any balance of 2021 taxes owing on or before May 2, 2022).
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Canadian tax system provides individual taxpayers with a tax credit for out-of-pocket medical and para-medical expenses incurred during the year. Given that such expenses must be incurred at some time by virtually every Canadian, that credit is among the most frequently claimed on the annual return. Unfortunately, however, the rules governing such claims are detailed, somewhat complex, and frequently confusing.
The Canadian tax system provides individual taxpayers with a tax credit for out-of-pocket medical and para-medical expenses incurred during the year. Given that such expenses must be incurred at some time by virtually every Canadian, that credit is among the most frequently claimed on the annual return. Unfortunately, however, the rules governing such claims are detailed, somewhat complex, and frequently confusing.
Taxpayers who wish to make a claim for the cost of medical expenses must make the following determinations. Which, if any, of the medical expenses incurred qualify for the medical expense tax credit? For what time period should the claim be made? What documentation, if any, is required to support the claim(s) being made? And, finally, which family member should make the claim?
Even the basic “formula” with respect to the amount of medical expenses which may be claimed is not straightforward. That basic rule is that a taxpayer can make a claim for qualifying medical expenses incurred in any 12-month period which ends during the taxation year, to the extent that the amount of such expenses exceeds 3% of net income or $2,421, whichever is less. Each component of that formula clearly requires some explanation.
Qualifying medical expenses
While Canada has a publicly funded medical care system, there is nonetheless a large (and growing) number of medical and para-medical expenses which must be paid for by the individual on an out-of-pocket basis. The more common such expenses include the costs of prescription drugs, dental care, physiotherapy, medical equipment, and ambulance transport.
However, it’s not the case that all such expenses can be claimed for tax purposes, or can be claimed in all circumstances. Where an expense does qualify, additional requirements may be imposed before a claim for such expense can be made. Finally, the question of whether an expense is claimable for tax purposes, and the requirements which must be met, aren’t necessarily intuitive.
What documentation is required to support claims made?
It’s obvious that the number and kind of different medical expenses which might be incurred by individuals over the course of the year is virtually limitless. In all cases, whatever the expense, the taxpayer must be prepared to support and document the nature and cost of each such expense, as well as the date on which it was incurred, with receipts. While such documentation does not have to be filed with the return, the CRA can request it from the taxpayer. And, where the supporting documentation cannot be provided, the expense claim will be denied.
For what time period should the claim be made?
While it might seem logical that only medical expenses incurred during 2021 could be claimed on the return for that year, the rules are actually more flexible than that. Specifically, those rules allow a claim to be made on the return for 2021 for qualifying medical expenses which are incurred in any 12-month period which ends during 2021.
Taking advantage of that rule requires the taxpayer to identify the 12-month period ending sometime in 2021 during which the greatest amount of qualifying medical expense was incurred.
It’s sometimes the case that it makes better sense, from a tax perspective, to not make a claim in the first year that that claim is available. Take, for instance a taxpayer who must incur significant costs for dental care, with such costs being incurred between November 2021 and March 2022. In order to maximize the claim to be made, it could make sense not to make a claim for the expenses incurred in the fall of 2021 on the 2021 return, but instead to wait and make a claim on the return for 2022 for all costs incurred between November 2021 and March 2022.
There is, unfortunately, no formula or rule of thumb which can be used to determine the optimal 12-month period for a medical expense claim in all circumstances. Rather, the taxpayer must determine, on a case-by-case basis, the optimal time period in their particular circumstances. Tax return preparation software can be helpful in this regard, by running what-if scenarios to determine the optimal tax result.
Who will make the claim?
Medical expenses incurred by either spouse or any of their minor children can be combined and claimed on a single return. In some circumstances, medical expenses paid by the taxpayer for other relatives may also be combined and included in the taxpayer’s claim.
Since only the amount of medical expenses which exceeds 3% of net income or $2,421 (whichever is less) can be claimed, it usually makes the most sense to combine family medical expenses and for a single claim for those combined expenses to be made by the lower income spouse, as long as that spouse has tax payable equal to at least the amount of the credit to be claimed.
It’s readily apparent that determining, calculating, and claiming the medical expense tax credit for a particular tax year isn’t an easy or straightforward process. To assist taxpayers in that process, the CRA publishes a guide to the rules which govern medical expense claims, and the most recent issue of that Guide — RC 4065, Medical Expenses — can be found on the CRA website at https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4065/rc4065-21e.pdf.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
While the requirement that Canadians file an income tax return each year never changes, the actual content of that return is never the same year to year. While many of the changes — like inflation-related increases to income tax brackets and credit amounts — happen automatically and don’t require any particular awareness or action on the part of the taxpayer, this is not the case with all tax changes. In some cases, taxpayers who aren’t aware of the changes can miss out on newly available or expanded tax deductions or credits, even if they are using tax preparation software to prepare their return. While the Canada Revenue Agency (CRA) will usually catch arithmetic errors made on a return, the Agency does not (and cannot) ensure that a taxpayer has made all of the claims which are available to him or her. And perhaps the only thing worse than having to pay a tax bill is paying one that is higher than it needs to be because available deductions or credits were missed.
While the requirement that Canadians file an income tax return each year never changes, the actual content of that return is never the same year to year. While many of the changes — like inflation-related increases to income tax brackets and credit amounts — happen automatically and don’t require any particular awareness or action on the part of the taxpayer, this is not the case with all tax changes. In some cases, taxpayers who aren’t aware of the changes can miss out on newly available or expanded tax deductions or credits, even if they are using tax preparation software to prepare their return. While the Canada Revenue Agency (CRA) will usually catch arithmetic errors made on a return, the Agency does not (and cannot) ensure that a taxpayer has made all of the claims which are available to him or her. And perhaps the only thing worse than having to pay a tax bill is paying one that is higher than it needs to be because available deductions or credits were missed.
This year, there are three tax or tax-related changes on the return for 2021 which are likely to affect a broad range of Canadians, and they are explained below.
Home office expenses
During the 2021 tax year, millions of Canadians continued to work from home, at least some of the time, for pandemic-related reasons. It has always been the case that employees who work from home and who meet certain criteria can deduct a portion of certain expenses related to the use of a home office — including internet usage fees and a portion of utilities costs and rent. In order to make such a claim, the employee must provide a specified form (the T2200 or T2200S) signed by his or her employer, indicating that the employee works from home and bears those costs, without reimbursement by the employer. To make the claim, the employee was also required to calculate the specific costs incurred and be prepared to provide documentation of those costs, if asked.
In view of the fact that millions of Canadians have been working from home for the first time during the past two years, and recognizing the somewhat onerous extent of record-keeping required to claim home office expenses, the federal government offered employees a choice in the form of a flat rate deduction. Using that method, an employee can claim a deduction of $2 for each day that he or she worked from home, to a maximum of $500 (for 2021), without the need to provide receipts or to obtain a T2200 from the employer. In order to qualify for the flat rate deduction, an employee must have worked more than 50% of the time from home for a period of at least four consecutive weeks for pandemic-related reasons. An employee who was offered the option of working from home and chose to do so will also qualify for the flat rate deduction.
Employees who worked from home during 2021 and meet the eligibility criteria under both the new flat rate and older detailed method can choose which one to use. Those who want to determine which method gives a better tax result can calculate their actual costs on a T777 (available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t777.html) and then decide which is the better option for them.
In this case, the change is not a change to the tax rules, but rather the means by which, and the schedule on which, the tax benefit is delivered. Eligible taxpayers who live in Alberta, Saskatchewan, Manitoba, or Ontario can receive a tax-free Climate Action Incentive (CAI) payment, which is intended to help offset the impact of federal pollution pricing. For 2022, the basic amount of that incentive is $360, with higher amounts available to taxpayers who live in rural areas.
On the return for 2020, the CAI was claimed, and the payment delivered, as part of the tax filing process, with eligible taxpayers claiming the incentive by completing Schedule 14 of the return. Any incentive amount to which the taxpayer was entitled would then create or increase the refund owed to the taxpayer. Conversely, where the taxpayer owed money on filing, that tax bill would be reduced by the amount of any CAI to which the taxpayer was entitled.
On the return for 2021, most taxpayers do not need to complete Schedule 14 or make a specific claim for the CAI. The exception is taxpayers who live in rural areas, who must complete Schedule 14 in order to indicate their eligibility for the CAI rural supplement. For taxpayers who are not eligible for that rural supplement, the CRA will determine a taxpayer’s eligibility, and the amount of any CAI payable, based solely on information contained in the taxpayer’s return for the year. The major change, however, is that payment of the incentive to eligible taxpayers is not delivered as part of the tax filing process – in other words, it won’t create or increase a tax refund and it will not reduce any tax payment required on filing. That’s because, starting in 2022, the federal government intends to deliver the CAI as a quarterly benefit payment. Under that new system, one-quarter of the CAI for the year will be paid to eligible taxpayers in each of April, July, October, and December of the year. Since the information needed to determine a specific taxpayer’s eligibility will not be available until the return for 2021 is filed, the July 2022 payment will include a retroactive payment for April 2022 — it will, in effect, be a “double-up” payment, covering the first six months of 2022.
The CWB is a refundable tax credit provided to lower income working Canadians. The CWB is not new, but changes have been made for the 2021 tax year which both increase the amount of the benefit and expand its availability.
The CWB is claimed by completing and filing Schedule 6 of the annual tax return. And, while the calculations to be made on that Schedule are somewhat complex, the amounts which are available to eligible taxpayers (as set out on the CRA website) are:
$1,395 for single individuals — the amount is gradually reduced if your adjusted net income is more than $22,944; no basic amount is paid if your adjusted net income is more than $32,244.
$2,403 for families — the amount is gradually reduced if your adjusted family net income is more than $26,177; no basic amount is paid if your adjusted family net income is more than $42,197.
An additional amount (the CWB disability supplement) is also provided to taxpayers who are eligible for the federal disability tax credit.
The changes made to the CWB for 2021 will expand the number of taxpayers who are eligible for the credit. Consequently, taxpayers who were not eligible for the CWB in previous years would be well advised to complete Schedule 6 this year to determine whether, as the result of the change in the rules, they can now receive it.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The list of financial assistance programs that have been provided by the federal government to support individual Canadians through two years of the pandemic is lengthy, detailed, and sometimes confusing. Unfortunately for the Canadian taxpayer, however, every one of those programs has one thing in common — benefits received are taxable income which must be reported on the return for the year in which they were received, and on which tax must be paid.
The list of financial assistance programs that have been provided by the federal government to support individual Canadians through two years of the pandemic is lengthy, detailed, and sometimes confusing. Unfortunately for the Canadian taxpayer, however, every one of those programs has one thing in common — benefits received are taxable income which must be reported on the return for the year in which they were received, and on which tax must be paid.
While fewer Canadians claimed and received such benefits during 2021 (as compared to 2020) there are still millions of taxpayers who will need to report pandemic benefits received during the year. It is possible, as well, that an individual taxpayer would have received pandemic benefits under more than one program during 2021, as the Canada Recovery Program (which included multiple types of benefits) ended in the fall of 2021 and was replaced by the Canada Worker Lockdown Benefit. The possible benefit programs from which benefits might have been received during 2021 therefore include the Canada Emergency Response Benefit (CERB), the Canada Emergency Student Benefit (CESB), the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB), the Canada Recovery Caregiving Benefit (CRCB), and the Canada Worker Lockdown Benefit (CWLB). And, while tax was withheld from payments made under some (but not all) of these benefit programs, the amount withheld was a flat amount of 10% of the benefit, which was likely less than the amount of tax which will ultimately be payable on the benefit amount. The rules on how to determine the amount in taxable benefits received and how to report them on the return for 2021 are outlined below.
The good news is that those who received pandemic benefits of any kind during 2021 will not have to remember which benefit(s) they received or how much the payments were. Rather, such individuals will receive T4A slips from the Canada Revenue Agency (CRA), and those slips will summarize the amount in benefits received from each program.
Taxpayers who are registered to use the CRA’s online services will be able to access their T4A slips on the CRA website. Those who do not will have paper copies of the T4A slips mailed to them by the end of February 2022.
T4A slips issued will show, in separate boxes, the amount of benefit received during 2021 under each pandemic relief program. As a practical matter, however, the specific type of benefit doesn’t really matter when it comes to taxation of those benefits, since taxpayers must add up all of the benefit amounts listed on the T4A and report the total amount as a single figure on line 13000 of the 2021 income tax return.
It's somewhat confusing that line 13000 on the return doesn’t actually refer to pandemic benefits; rather, it is a line on which “other income” is reported. While there is a space on Line 13000 of the return on which taxpayers can specify the type(s) of “other income” being reported, filing instructions provided on the CRA website state only that taxpayers should “[E]nter the total amount you received on line 13000 of your tax return. If you are filing a paper return, specify the type of income you are reporting. Attach a list if you received more than one benefit.”
Among all of the benefit programs provided, tax was withheld from all benefits under the CRB, the CRSB, the CRCB, and the CWLB. Taxpayers who received such benefits will find an amount listed in Box 22 on the T4A. That number, which represents the amount of tax which the benefit recipient has already paid on those benefits, should be entered on Line 43700 of the return.
Taxpayers who received the Canada Recovery Benefit during 2021 and who had net income for the year of more than $38,000 may find themselves in the unenviable position of having to repay some of the CRB amounts received. The repayment rate is 50 cents of benefits received for every dollar of net income over the $38,000 threshold, to a maximum amount of total CRB benefits received. Where a taxpayer is preparing his or her return using tax preparation software, that software should do any required repayment calculation automatically and include any repayment amount in the total of tax payable for the year. Taxpayers completing a paper return will need to calculate any required repayment amount using a Worksheet (in the section under Social Benefits Repayment), which can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/5000-d1.html.
While the number of different benefit programs under which benefits might have been received during 2021 is numerous, and the rules governing eligibility were certainly complex, reporting those benefits for tax purposes is really just a two-step process for taxpayers. First, add up all benefit amounts which appear in Boxes 197 to 199, Box 200, Box 211, and Boxes 202 to 204 on the T4A slip which was received. Take the total amount of such benefits and enter it on Line 13000 of the return. Next, if there is an amount appearing in Box 22 of the T4A, that number should be entered on Line 43700 of the return.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Sometime during the month of February, millions of Canadians will receive mail from the Canada Revenue Agency (CRA). That mail, a “Tax Instalment Reminder”, will set out the amount of instalment payments of income tax to be paid by the recipient taxpayer by March 15 and June 15 of this year.
Sometime during the month of February, millions of Canadians will receive mail from the Canada Revenue Agency (CRA). That mail, a “Tax Instalment Reminder”, will set out the amount of instalment payments of income tax to be paid by the recipient taxpayer by March 15 and June 15 of this year.
Receiving an Instalment Reminder from the CRA won’t be a surprise for many recipients who have paid tax by instalments during previous tax years. For others, however, the need to make tax payments by instalment is a new and unfamiliar concept. That’s because for most Canadians — certainly most Canadians who earn their income through employment — the payment of income tax throughout the year is an automatic and largely invisible process, requiring no particular action on the part of the employee/taxpayer. Federal and provincial income taxes, along with Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums, are deducted from each employee’s income and the amount deposited to an employee’s bank account is the net amount remaining after such taxes, contributions, and premiums are deducted and remitted on the employee’s behalf to the CRA. While no one likes having to pay taxes, having those taxes paid “off the top” in such an automatic way is, relatively speaking, painless. Such is not, however, the case for the sizeable minority of Canadians who pay their income taxes by way of tax instalments.
The CRA’s decision to send an Instalment Reminder to certain taxpayers isn’t an arbitrary one. Rather, an Instalment Reminder is generated when sufficient income tax has not been deducted from payments made to that taxpayer throughout the year. Put more technically, an instalment reminder will be issued by the CRA where the amount of tax which was or will be owed when filing the annual tax return is more than $3,000 in the current (2022) tax year and either of the two previous (2020 or 2021) tax years. Essentially, the requirement to pay by instalments will be triggered where the amount of tax withheld from the taxpayer’s income throughout the year is at least $3,000 less than their total tax owed for 2022 and either 2020 or 2021. For residents of Quebec, that threshold amount is $1,800.
Such obligation arises on a regular basis for those who are self-employed, or course, and generally for those whose income is largely derived from investments. The group of recipients of a tax instalment reminder often also includes retired Canadians, especially the newly retired, for two reasons. First, while most employees have income from only a single source — their paycheque — retirees often have multiple sources of income, including Canada Pension Plan (CPP) and Old Age Security (OAS) payments, private retirement savings and, sometimes, employer-provided pensions. And, while income tax is deducted automatically from one’s paycheque, that’s not the case for most sources of retirement income. Relatively few new retirees realize that it’s necessary to make arrangements to have tax deducted “at source” from either their government source income (like CPP or OAS payments) or private retirement income like pensions or registered retirement income fund withdrawals, and to make sure that the total amount of those deductions is sufficient to pay the total tax bill for the year. It is that group of individuals, who may be surprised and puzzled by the arrival of an unfamiliar “Instalment Reminder” from the CRA. However, no matter what kind of income a taxpayer has received, or why sufficient tax has not been deducted at source, the options open to a taxpayer who receives such an Instalment Reminder are the same.
First, the taxpayer can pay the amounts specified on the Reminder, by the March and June payment due dates. Choosing this option will mean that the taxpayer will not face any interest or penalty charges, even if the amount paid by instalments throughout the year turns out to be less than the taxes actually payable for 2022. If the total of instalment payments made during 2022 turn out to more than the taxpayer’s total tax liability for the year, they will of course receive a refund when the annual tax return is filed in the spring of 2023.
Second, the taxpayer can make instalment payments based on the amount of tax which was owed for the 2021 tax year. Where a taxpayer’s income has not changed significantly between 2021 and 2022 and their available deductions and credits remain the same, the likelihood is that total tax liability for 2022 will be slightly less than it was in 2021, as the result of the indexation of both income tax brackets and tax credit amounts.
Third, the taxpayer can estimate the amount of tax which they will owe for 2022 and can pay instalments based on that estimate. Where a taxpayer’s income will decrease significantly from 2021 to 2022, such that their tax bill will also be substantially reduced, this option can make the most sense.
A taxpayer who elects to follow the second or third options outlined above will not face any interest or penalty charges if there is no additional tax payable when the return for the 2022 tax year is filed in the spring of 2023. However, should instalments paid have been late or insufficient, the CRA will impose interest charges, at rates which are higher than current commercial rates. (The rate charged for the first quarter of 2022 — until March 31, 2022 — is 5%.) As well, where interest charges are levied, such interest is compounded daily, meaning that on each successive day, interest is levied on the previous day’s interest. It’s also possible for the CRA to levy penalties for overdue or insufficient instalments, but that is done only where the amount of instalment interest charged for the year is more than $1,000.
Most Canadian taxpayers are understandably disinclined to pay their taxes any sooner than absolutely necessary. However, ignoring an Instalment Reminder is never in the taxpayer’s best interests. Those who don’t wish to involve themselves in the intricacies of tax calculations can simply pay the amounts specified in the Reminder. The more technical-minded (or those who want to ensure that they are paying no more than absolutely required, and are willing to take the risk of having to pay interest on any shortfall) can avail themselves of the second or third options outlined above.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Income tax is a big-ticket item for most retired Canadians. Especially for those who are no longer paying a mortgage, the annual tax bill may be the single biggest expenditure they are required to make each year. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And, in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.
Income tax is a big-ticket item for most retired Canadians. Especially for those who are no longer paying a mortgage, the annual tax bill may be the single biggest expenditure they are required to make each year. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And, in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.
There is, however, another income tax saving strategy which is not nearly as well-known. Even more unfortunate is the fact that the benefits of that strategy (and the ease with which it can be accomplished) aren’t readily apparent from either the tax return form or the annual income tax guide. That tax saving strategy is pension income splitting and it’s likely the case that many taxpayers who could benefit aren’t familiar with the strategy, especially if they are not receiving professional tax planning or tax return preparation advice.
That’s a particularly unfortunate reality because pension income splitting has the potential to generate more tax savings among taxpayers over the age of 65 (and certainly those over the age of 71, for whom RRSP contributions are no longer possible) than just about any other tax planning strategy available to retirees. In addition, it’s one of the very few tax planning strategies which requires no expenditure of funds on the part of the taxpayer, and which can be implemented after the end of the tax year, at the time the return for that tax year is filed.
When described in those terms, pension income splitting can sound like one of those “too good to be true” tax scams, but that’s not the case. Essentially, what pension income splitting offers is a government-sanctioned opportunity for Canadian residents who are married (and, usually, where recipient spouse is aged 65 or older) to make a notional reallocation of private pension income between them on their annual tax returns, and to benefit from a lower overall family tax bill as a result.
Pension income splitting, like all forms of income splitting, works because Canada has what is called a “progressive” tax system, in which the applicable tax rate goes up as income rises. For 2021, the federal tax rate applied to about the first $49,000 of taxable income is 15%, while the federal rate applied to approximately the next $49,000 of such income is 20.5%. So, an individual who has $98,000 in taxable income would pay federal tax of about $17,395: if that $98,000 was divided equally between such individual and their spouse, each would have $49,000 in taxable income and federal tax payable of $7,350 each. The total federal family tax bill would be $14,700.
The general rule with respect to pension income splitting is that a taxpayer who receives private pension income during the year is entitled to allocate up to half that income (without any dollar limit) to their spouse for tax purposes. In this context, private pension income means a pension received from a former employer and, where the income recipient is age 65 or older, payments from an annuity, a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF). Government source pensions, like the Canada Pension Plan, Quebec Pension Plan, or Old Age Security payments do not qualify for pension income splitting, regardless of the age of the recipient.
The mechanics of pension income splitting are relatively simple. There is no need to transfer funds between spouses or to make any change in the actual payment or receipt of qualifying pension amounts, and no need to notify a pension administrator. Taxpayers who wish to split eligible pension income received by either of them must each file Form T1032, Joint Election to Split Pension Income for 2021, with their annual tax return. That form, which is not included in the annual tax return package, can be found on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1032.html, or can be ordered by calling 1-800-959-8281.
On the T1032, the taxpayer receiving the private pension income and the spouse with whom that income is to be split must make a joint election to be filed with their respective tax returns for 2021. Since the splitting of pension income affects the income and therefore the tax liability of both spouses, the election must be made and the form filed by both spouses — an election filed by only one spouse or the other won’t suffice. In addition to filing the T1032, the spouse who is actual recipient of the pension income to be split must deduct from income the pension income amount allocated to their spouse. That deduction is taken on Line 21000 of their 2021 return. And, conversely, the spouse to whom the pension income amount is being allocated is required to add that amount to their income on the return, this time on Line 11600. Essentially, to benefit from pension income splitting, all that’s needed is for each spouse to file a single form with the CRA and to make a single entry on their 2021 tax return.
By the end of February or early March, taxpayers will have received (or downloaded) the information slips which summarize the income received from various sources during 2021. At that time, couples who might benefit from this strategy can review those information slips and calculate the extent to which they can make a dent in their overall tax bill for the year through a little judicious pension income splitting.
Those wishing to obtain more information on pension income splitting than is available in the 2021 General Income Tax and Benefit Guide should refer to the CRA website at http://www.cra-arc.gc.ca/pensionsplitting/, where more detailed information is available.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
If there is one invariable “rule” of financial and retirement planning of which most Canadians are aware, it is the unquestioned wisdom of making regular contributions to one’s registered retirement savings plan (RRSP). And it is true that for several decades the RRSP was only tax-sheltered savings and investment vehicle available to most individual Canadians.
If there is one invariable “rule” of financial and retirement planning of which most Canadians are aware, it is the unquestioned wisdom of making regular contributions to one’s registered retirement savings plan (RRSP). And it is true that for several decades the RRSP was only tax-sheltered savings and investment vehicle available to most individual Canadians.
In 2009, however, that reality changed with the introduction of Tax-Free Savings Accounts (TFSAs). Since then, taxpayers have had a choice of which savings and investment vehicle better meets their short-term and long-term tax and personal finance objectives, and this is the time of year when most Canadians must make that choice.
It should be said that there’s nothing wrong, and a lot right, with making the maximum allowable contribution to both of one’s TFSA and RRSP every year. However, doing both assumes the availability of a level of discretionary income that just isn’t the financial reality in which most Canadians live and plan. In addition, there are circumstances in which making a contribution to one type of plan or the other is clearly the better choice, and sometimes the only choice. Some of those circumstances are as follows.
For Canadians over the age of 71, there is no choice. All individual Canadians must collapse their RRSPs by the end of the year in which they turn 71, and no RRSP contributions can be made after that time. A TFSA is the only tax-sheltered savings vehicle to which taxpayers over age 71 can contribute. Many of those taxpayers, however, have transferred their RRSP savings to a registered retirement income fund (RRIF) and are required to withdraw a specified percentage of funds from that RRIF each year. For taxpayers who are in the fortunate position of having such income in excess of current cash flow needs, that excess can be contributed to a TFSA. While the RRIF withdrawals must still be included in income and taxed in the year of withdrawal, transferring the funds to a TFSA will allow them to continue compounding free of tax and no additional tax will be payable when and if the funds are withdrawn. And, unlike RRIF or RRSP withdrawals, monies withdrawn in the future from a TFSA will not affect the planholder’s eligibility for Old Age Security benefits or for the federal age credit.
The minority of working taxpayers who are members of registered pension plans (RPPs) will also likely find savings through a TFSA the better or even the only option. The maximum amount which can be contributed to an RRSP in a given year is generally 18% of the previous year’s income, to a specified dollar amount ceiling. However, any allowable contribution is reduced, for members of RPPs, by the amount of benefits accrued during the year under their pension plan. Where the RPP is a particularly generous one, RRSP contribution room may be minimal, or even non-existent, and a TFSA contribution the logical alternative.
At the other end of the age spectrum, younger Canadians whose savings goals are likely more short-term are usually better off saving through a TFSA. Where savings are being accumulated for an expenditure which is likely to occur within the next five years (e.g., putting together money for a new car or for a down payment), the TFSA is clearly the better choice. Taxpayers in that situation are sometimes tempted to make an RRSP contribution instead, in order to get a tax refund, and then to withdraw the funds when the planned expenditure is to be made. However, while choosing that option will provide a deduction on this year’s return and probably generate a tax refund, tax will still have to be paid when the funds are withdrawn from the RRSP a year or two later. And, more significantly from a long-term point of view, using an RRSP in this way will eventually erode one’s ability to save for retirement, as RRSP contributions which are withdrawn from the plan cannot be replaced. While the amounts involved may seem small, the loss of compounding on even a relatively small amount over 25 or 30 years can make a significant dent in one’s ability to save for retirement.
The greatest tax benefit of contributing to an RRSP is realized when contributions are made when income (and therefore tax payable) is high, and the intention is to withdraw those funds when both income and the rate of tax payable on that income is lower. Where that’s not the case, saving through a TFSA can make more sense, as in the following situations.
Taxpayers who are expecting their income to rise significantly within a few years — e.g., students in post-secondary or professional education or training programs — can save some tax by contributing to a TFSA while they are in school and their income (and therefore their tax rate) is low, allowing the funds to compound on a tax-free basis, and then withdrawing the funds tax-free once they’re working, when their tax rate will be higher. At that time, the withdrawn funds can be used to make an RRSP contribution, which will be deducted against income which would be taxed at the much higher rate, generating a tax savings. And, if a need for funds should arise in the meantime, a tax-free TFSA withdrawal can always be made.
Lower income taxpayers, for whom there isn’t likely to be a great difference between pre-retirement and post-retirement income are likely better off saving through a TFSA. That’s especially the case where those taxpayers may be eligible in retirement for means-tested government benefits like the Guaranteed Income Supplement or tax credits like the GST/HST credit or age credit. Withdrawals made from an RRSP or RRIF during retirement will be included in income for purposes of determining eligibility for such benefits or credits, and lower-income taxpayers could find that such withdrawals have pushed their income to a level which reduces or eliminates their eligibility. On the other hand, monies withdrawn from a TFSA are not included in income for the purpose of determining eligibility for any government benefits or tax credits, so saving through a TFSA will ensure that receipt of such benefits is not put at risk.
As is the case with most tax and financial planning questions, there isn’t a universal right or wrong answer when it comes to decisions on contributing to a TFSA and/or an RRSP. What is certain, however, is that the best choice for any individual is the one which takes account of their particular tax and financial realities and prospects — both current and future.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
As the pandemic continued past 2020 and through 2021, it is likely that employees who were able to work from home spent at least part of the 2021 tax year doing just that. And, as was the case in 2020, those workers may be entitled to claim a deduction on their 2021 tax return for home office expenses incurred.
As the pandemic continued past 2020 and through 2021, it is likely that employees who were able to work from home spent at least part of the 2021 tax year doing just that. And, as was the case in 2020, those workers may be entitled to claim a deduction on their 2021 tax return for home office expenses incurred.
Employees who work from home have always, assuming the requisite criteria are satisfied, been able to claim a portion of household expenses incurred. Doing so required the employee to obtain certification from the employer of the work from home arrangement, calculate household expenses incurred, determine the portion of such expenses which were attributable to the home office, and to claim that amount on the annual return. For 2020, however, the Canada Revenue Agency (CRA), recognizing the greatly increased number of taxpayers who would be claiming home office expenses for the first time, provided a new, temporary “flat rate” method of calculating the deduction for such expenses. The CRA has indicated that that flat rate method will continue to be allowed for both 2021 and 2022.
Although the flat rate method is widely available, taxpayers who wish to do so and who qualify are still entitled to use the pre-existing detailed method under which actual eligible expenses incurred during the year are tallied and a percentage of those expenses claimed on the 2021 tax return.
In order to claim a deduction for costs related to a work from home space using the detailed method, an employee must meet at least one of the following conditions:
the employee worked from home during 2021 as a consequence of the pandemic (including employees who were given a choice and elected to work from home); or
the employee was required by their employer to work from home during 2021.
In addition, at least one of the following criteria must also be satisfied in order to claim work from home costs under the detailed method:
the work at home space is where the individual mainly (more than 50% of the time) did their work for a period of at least four consecutive weeks during 2021; or
the individual uses the workspace only to earn their employment income; they must also use it on a regular and continuous basis for meeting clients, customers, or other people in the course of their employment duties.
Once these threshold criteria are met, a broad range of costs become deductible by the employee. Specifically, a salaried employee can claim and deduct the part of specified costs that relate to their work space, such as rent, utilities costs like electricity, heating, water (or the portion of a condo fee attributable to such utilities costs), home maintenance, and minor repair costs and internet access (but not internet connection) fees.
Once total expenses are tallied, the taxpayer must determine the percentage of those expenses which can be deducted as home office expenses, and the CRA provides detailed information on its website of how such determination is made. Generally, the employee determines that percentage based on the square footage of the workspace as a percentage of the overall square footage of the home. Where the work space is not a separate room but is a shared space like a dining room, the employee must also calculate the number of hours for which that space is dedicated to work from home activities. Detailed information on how to make those calculations (including an online calculator) can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses/work-space-home-expenses/work-space-use.html.
In all cases, the CRA can ask the taxpayer to provide documentation and support for claims made using the detailed method.
There is one further requirement for employees who seek to deduct costs incurred in relation to a home office using the detailed method. Each such employee must obtain either a Form T2200S, Declaration of Conditions of Employment for Working at Home Due to COVID-19, or Form T2200, Declaration of Conditions of Employment. On those forms, the employer must certify the work from home arrangement and confirm that the employee is required to pay their own home office expenses and is not being reimbursed for any such expenses incurred. Where there is any kind of reimbursement provided, the employer must specify the type of expense reimbursed, and the amount of reimbursement. And, of course, the employee cannot claim a deduction for any expenses for which reimbursement was received.
While the detailed method outlined above can create substantial deductions for employees who work from home, it is apparent that making such a claim involves considerable record keeping and paperwork. Taxpayers who would prefer not to undertake that task can instead avail themselves of the flat rate method.
Conversely, in order to claim a deduction for costs related to a work from home space using the flat rate method, an employee must meet the following conditions:
the employee worked from home during 2021 as a consequence of the pandemic (including employees who were given a choice and elected to work from home); and
the employee worked from home for more than 50% of the time for a period of at least four consecutive weeks during 2021.
In addition, the following criteria must both be satisfied:
the employee is not claiming any employment expenses other than home office expenses; and
the employer did not reimburse all of the employee’s home office expenses for the year; where the employer reimburses only a portion of such expenses, the employee may still make a claim under the flat rate method, assuming the other criteria are met.
A taxpayer who meets all of the criteria for using the flat rate method can claim $2 for each day they worked from home during the four-consecutive-week qualifying period. They can then claim $2 per day for any additional days of working from home during the year. However, there is an overall cap on the amount of home office expenses which can be claim under the flat rate method. For 2021 the maximum which can be claimed is $500. There is no requirement that the employee obtain a T2200 or a T2200S from the employer in order to make a flat rate claim, and no requirement that the employee keep or provide receipts for any costs incurred.
There is no general rule of thumb which can be used to determine whether the flat rate method or the detailed method will give a better tax result — that determination can only be made where the available deduction is calculated under each method and a comparison made of the result. Taxpayers who don’t want to undertake that effort (or don’t have the records needed to calculate or support such a claim using the detailed method) and who meet the required criteria for the flat rate method can simply multiply the number of work-from-home days (up to a maximum of 250 days, or $500.) and claim the resulting figure on line 22900 of the 2021 tax return.
While calculating the expenses which qualify for a home office expense deduction isn’t particularly complicated, the eligibility criteria for the deduction and determining the percentage of expenses eligible for that deduction can be detailed, especially as the range of work from home arrangements and work from home work spaces is almost limitless. The CRA has provided on its website a very helpful summary of both the general rules for claiming home office expenses for 2021, as well as guidance with respect to particular situations — e.g., where two spouses share the same home office space. That information and guidance (including an FAQ document) can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses/work-space-home-expenses.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Employment Insurance premium rate for 2022 is unchanged at 1.58%.
The Employment Insurance premium rate for 2022 is unchanged at 1.58%.
Yearly maximum insurable earnings are set at $60,300, making the maximum employee premium $952.74.
As in previous years, employer premiums are 1.4 times the employee premium. The maximum employer premium for 2022 is therefore $1,333.84.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Quebec Pension Plan contribution rate for 2022 is set at 6.15% of pensionable earnings for the year.
The Quebec Pension Plan contribution rate for 2022 is set at 6.15% of pensionable earnings for the year.
Maximum pensionable earnings for the year will be $64,900, and the basic exemption is unchanged at $3,500.
The maximum employer and employee contributions to the plan for 2022 will be $3,776.10 each.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Canada Pension Plan contribution rate for 2022 is set at 5.7% of pensionable earnings for the year.
The Canada Pension Plan contribution rate for 2022 is set at 5.7% of pensionable earnings for the year.
Maximum pensionable earnings for the year will be $64,900, and the basic exemption is unchanged at $3,500.
The maximum employer and employee contributions to the plan for 2022 will be $3,499.80 each, and the maximum self-employed contribution will be $6,999.60.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Dollar amounts on which individual non-refundable federal tax credits for 2022 are based, and the actual tax credit claimable, will be as follows:
Dollar amounts on which individual non-refundable federal tax credits for 2022 are based, and the actual tax credit claimable, will be as follows:
Credit amount Tax credit
Basic personal amount* 14,398 2,159.70
Spouse or common law partner amount* 14,398 2,159.70
Eligible dependant amount* 14,398 2,159.70
Age amount 7,898 1,184.70
Net income threshold for erosion of age credit 39,826
Canada employment amount 1,287 193.05
Disability amount 8,870 1330.50
Adoption expenses credit 17,131 2,569.65
Medical expense tax credit
Income threshold amount 2,479
*For taxpayers having net income for the year of more than $155,625, amounts claimable for the basic personal amount, the spousal amount, and the eligible dependant amount for 2022 may differ.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The indexing factor for federal tax credits and brackets for 2022 is 2.4%. The following federal tax rates and brackets will be in effect for individuals for the 2022 tax year.
The indexing factor for federal tax credits and brackets for 2022 is 2.4%. The following federal tax rates and brackets will be in effect for individuals for the 2022 tax year.
Income level Federal tax rate
$14,398 – $50,197 15%
$50,198 – $100,392 20.5%
$100,393 – $155,625 26%
$155,626 – $221,708 29%
Over $221,708 33%
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.