Ontario 2013 Budget - May 2, 2013
All proposals are subject to legislative approval.
The Ontario 2013 Budget proposes to modify the OTB so that, beginning with 2014 benefits, each recipient can choose to receive the benefit either monthly or in a single payment at the end of the benefit year.
Tax filers would choose which option they want when they file their 2013 income tax return in 2014. However, those receiving an annual benefit of $360 or less will be paid in a single payment in July 2014 - they cannot opt for monthly payments. Others opting for a single payment would receive the single payment for 2014 benefits in June 2015. Those opting for monthly payments would receive the payments from July 2014 through to June 2015.
Employer Health Tax (EHT)
The budget proposes to eliminate the EHT exemption of $400,000 for private-sector employers, including groups of associated employers, with annual Ontario payrolls over $5 million. For small employers, including small businesses, charities and not-for-profit organizations, the exemption would be increased from $400,000 to $450,000. These changes would take effect January 1, 2014. The exemption would be adjusted for inflation every 5 years using the Ontario Consumer Price Index. At projected inflation rates the exemption would increase to $500,000 in 2019.
Apprenticeship Training Tax Credit
The budget proposes, effective for expenditures incurred after March 31, 2014, that the following apprenticeship trades will not be eligible for ATTC:
Accelerated Capital Cost Allowance for Manufacturing and Processing Machinery and Equipment
Ontario proposes to parallel the 2013 federal budget proposal to extend the accelerated CCA for this equipment acquired in 2014 or 2015, subject to federal implementation.
Ontario will parallel the federal changes to the non-eligible dividend tax credit for Canadian dividends. For dividends paid after 2013, the gross-up factor will be reduced from 25% to 18%, and the federal non-eligible dividend tax credit will be revised from 2/3 of the gross-up amount to 13/18 of the gross-up amount. This reduces the DTC rate from 13 1/3% of the grossed-up dividend to 11%.
Other federal tax measures will be adopted under the terms of the Canada-Ontario Tax Collection Agreement.
The government will be proposing legislation to introduce new disclosure rules for aggesssive tax avoidance transactions, similar to the rules included in the federal Bill C-48 in November 2012. Under this legislation, taxpayers would be required to report aggressive tax avoidance transactions that attempt to avoid Ontario tax.
The above items are a very small part of a lengthy budget document. For the complete budget see the Ontario Department of Finance 2013 Budget. See also Section A Tax Measures for information on the proposed tax changes.
Revised: September 19, 2017
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