What's New -> What's New 2009
What's New by Month in 2009December 2009
Automobile deduction limits (passenger vehicle expense limits) remain unchanged for 2010. This includes capital cost allowance, interest expense and leasing cost limits.
The limits for allowable deductions for tax-free vehicle allowances paid to employees remain unchanged for 2010.
The prescribed rates used to calculate the operating cost benefit for the personal portion of automobile operating expenses paid by employers remain unchanged for 2010.
Taxable capital employed in Canada is used in the calculation of Capital Tax, and is used to determine eligibility for the Small Business Deduction (SBD).
We have published the Quebec Tax Calculator for 2010 and 2009, including the updated Working Income Tax Benefit (WITB) for both years.
The 2010 WITB amounts for Quebec have now been published.
We have published a table of WITB amounts for 2010 for all provinces and territories except Quebec. The amounts in the table are calculated by using the Federal indexation factor for 2010, applied to the 2009 amounts. We have revised the 2009 table, which now shows the correct amounts for Alberta, BC and Nunavut. We have created a new table for Quebec for 2009, as it is structured somewhat differently from the other provinces. The amounts for Quebec for 2010 are not yet available, as a different indexation factor is used.
We have published the Canadian Tax Calculator for 2010 and 2009, including the updated Working Income Tax Benefit (WITB) factors for 2009 and 2010 for all provinces and territories. A separate Tax Calculator for 2008 is also available.
Bill C-56, the Fairness for the Self-Employed Act, received Royal Assent on December 15, 2009. This legislation allows self-employed persons to pay EI premiums on a voluntary basis, in order to qualify for EI special benefits.
Bill C-51 received Royal Assent on December 15, 2009, implementing tax measures from the 2009 Budget, including the Home Renovation Tax Credit (HRTC), Homebuyers' Tax Credit, and enhancements to the Working Income Tax Benefit (WITB). The Bill also includes legislation for changes to the Canada Pension Plan (CPP) retirement benefits.
The Government of Canada has started pre-budget consultations, and is looking for input from Canadians. Comments can be submitted online on the Consulting with Canadians web page.
The table of Federal, provincial and territorial enhanced dividend tax credit rates has been updated to include 2010 to 2012.
The table of Federal, provincial and territorial non-eligible dividend tax credit rates has been updated to include 2010 to 2012.
The marginal tax rate tables for 2010/2009 have been expanded, to add the provincial/territorial basic tax brackets and rates, in a table above the combined Federal and provincial/territorial marginal tax rates.
The tables of non-refundable tax credits for 2010 have been published, including Federal and all provinces/territories except Quebec.
Most of the time, only 50% of the cost of meals and entertainment expenses that are incurred for a business purpose are deductible, but there are exceptions to this, including for long-haul truck drivers.
The RRSP vs Mortgage Calculator has been updated with 2010 income tax thresholds and rates. This calculator helps you to decide whether to increase your monthly mortgage payment, or contribute the extra monthly amount to an RRSP.
The Borrow to Invest calculator has been modified to apply the changing eligible dividend gross-up and dividend tax credit rates from 2010 to 2012. Years after 2012 use the 2012 rates. All years use 2010 income tax thresholds and rates. This calculator lets you see the advantages of borrowing to invest in stocks and exchange traded funds (ETFs).
The Sheltering RRSPs 2010 calculator is now available. The calculator has been modified to apply the changing eligible dividend gross-up and dividend tax credit rates from 2010 to 2012. Years after 2012 use the 2012 rates. All years use 2010 income tax thresholds and rates. This calculator shows you how to reduce your taxes while withdrawing from your RRSP.
The province is proposing to increase the threshold for the BC new housing rebate for primary residences and rental housing from $400,000 to $525,000. Where there is a written agreement for the sale of a new home prior to November 19, 2009, the sale would generally not be subject to the provincial portion of the HST, even if ownership and/or possession are transferred after June 2010.
The marginal tax rate tables for 2010, which also include the 2009 rates, are now available.
Bill 218 was introduced in the Legislative Assembly on November 16, 2009, and includes remaining income tax changes from the 2009 Budget, as well as legislation related to the HST implementation. The personal income tax surtax thresholds in Bill 218 differ from those presented in the Budget.
BC will retain a provincial sales tax on the private sale of used vehicles, aircraft and boats. These sales are currently subject to PST, but not GST, and will not be subject to HST.
The Employment Insurance rate remains unchanged for 2010, but the maximum insurable earnings amount has increased to $43,200 from $42,300.
Ontario has announced that newspapers and qualifying prepared food and beverages costing $4.00 or less will also qualify for a point-of-sale exemption for the provincial portion of the HST.
We have expanded the article on the tax treatment of investments in non-interest paying bonds, or strip bonds, and include a link to a Canada Revenue Agency technical interpretation.
Bill C-56, the Fairness for the Self-Employed Act, was introduced in the House of Commons and passed first reading on November 3, 2009. This proposed legislation would allow self-employed persons to pay EI premiums on a voluntary basis, in order to qualify for EI special benefits.
The maximum pensionable earnings is increased to $47,200 from the 2009 level of $46,300. The contribution rate remains at 4.95%.October 2009
On October 16, 2009 the Minister of Finance announced proposed amendments to the Income Tax Act to strengthen the rules applicable to Tax-Free Savings Accounts.
We have added the Home Renovation Tax Credit and the First-Time Homebuyers' Tax Credit to the Canadian Tax Calculator. We have also added links within the calculator to information on some of the non-refundable tax credits. The links open in the same window, replacing the calculator, but when the browser Back button is clicked, the previously entered information is still available in the calculator. To open the links in a new window, right-click on the link, and select "Open in New Window".
Quebec Tax Credit for Home Improvement and Renovation
The Quebec Revenue Ministry has published new information regarding this refundable tax credit, including definitions for qualifying work, qualified contractor, eligible residential units, and eligible expenses.
There is normally no requirement to withhold tax from interest paid to an arm's length non-resident, but Part XIII withholding tax must usually be deducted when interest is paid to a non-arm's length non-resident.
My Business Account is an online service provided by Canada Revenue Agency (CRA), that allows you to manage tax-related information for your business.
The Ontario Ministry of Finance has published proposed HST Transitional Rules, which are required to determine which tax - RST or the Ontario component of the HST - would apply to transactions that straddle the July 1, 2010 implementation date.
The BC Ministry of Finance has published proposed HST Transitional Rules, which are required to determine which tax - PST or the BC component of the HST - would apply to transactions that straddle the July 1, 2010 implementation date.
We have added more detail to our article on the equivalent to spouse tax credit, which is available to a single person for a dependent child or other eligible dependent. The Canadian Tax Calculator has been modified to include the ability to claim this tax credit for other eligible dependents.
We have expanded our article on borrowing to invest in stocks and ETFs, to include information on what to do with the dividends, and how things work when leveraged investments are sold.
On October 5th, Canada Revenue Agency started a new online service that allows individuals and businesses to make payments to CRA directly from their bank accounts. This applies to income tax, GST/HST remittances, payroll deductions and many other types of payments.
Think you may have forgotten about some money on deposit somewhere? In our article on unclaimed property, we have added links to databases of unclaimed property for Alberta and Quebec.
Bill C-51 passed first reading in the House of Commons on September 30th. As well as containing proposed legislation regarding the 2009 Budget, it also includes proposed changes to the Canada Pension Plan, and a change to the Broadcasting Act that increases the borrowing limit of the CBC to $220 million from $25 million.September 2009
There are several changes proposed for the CPP retirement pension. The proposed changes will not affect anyone who is currently collecting the CPP retirement, disability or survivor benefits. It will also not affect anyone who starts to collect their pension prior to 2012.
Selling goods on eBay may result in taxable income. CRA has obtained a court order which requires eBay to disclose information on certain eBay sellers.
Much has been said against the implementation of HST in BC. We believe that the elimination of PST in favour of HST will increase the productivity of businesses and will be good for the BC economy.
The May 2009 budget was not passed before the NS government was defeated in June. The September 24 budget is substantially the same as the May budget. The budget includes a new Graduate Retention Rebate, and expanded HST rebates on household electricity and new home construction.
We have published the table of factors for the enhanced WITB for 2009, using the amounts in the recently tabled Notice of Ways and Means Motion. The enhanced WITB amounts for AB, BC, NU and QC are not yet available, and will be updated in the table when they are known. The Canadian Tax Calculator has been updated with the revised WITB amounts.
Canada Revenue Agency has published a Notice re Harmonization of the Ontario Retail Sales Tax with the GST, with Questions and Answers on Housing Rebates, Transitional Rules for Housing and Other Real Property Situated in Ontario.
We have created a new page which talks about capital gains and losses and links to related articles, including those articles which discuss methods of reducing, eliminating, and deferring capital gains.
When proceeds from the sale of capital property are received over a number of years, a reserve may be claimed to spread the gain over up to 5 years, or up to 10 years for dispositions of certain property to a child. The capital gain on donations of non-qualifying securities to a qualified donee can be deferred for up to 5 years, and sometimes eliminated.
When capital property is donated, the taxpayer can reduce the capital gain (and the eligible donation amount) by electing to designate an amount lower than fair market value as the proceeds of disposition.
Usually contest and raffle prizes are not considered taxable income, unless the circumstances in which they are received cause them to be considered employment, business or property income, or a prize for achievement. For instance, the prizes from an employer-promoted contest or draw could, in some circumstances, be considered employment income.
The Federal government tabled a Notice of Ways and Means Motion on September 14th to implement items remaining from the February 2009 Budget, including the Home Renovation Tax Credit (HRTC) and enhancements to the Working Income Tax Benefit (WITB).
We have published a table showing the 2009 Federal and Provincial/Territorial tax rates applicable for the donations tax credit. The table also shows the total combined tax credit amount for a donation of $1,000 in each province and territory.
This rebate is available for eligible rental accommodation and for land leased for a residence. The rental accommodation or land must be intended for long-term use as a residence.
BC presented their Budget Update on September 1st. There are increases to personal income tax credits effective January 1, 2010. Medical Services Plan (MSP) rates will increase effective January 1, 2010, but adjusted net income thresholds are also increased. This results in lower premiums for individuals and families with adjusted net income of $30,000 or less. The small business threshold for corporate income tax is increased to $500,000 effective January 1, 2010. The plan to have a provincially administered HST exemption for residential energy use was also announced.August 2009
If all conditions to participate in the HBP are satisfied, the funds withdrawn can be used for any purpose.
If a transaction would have tax implications if money changes hands, it will have the same tax implications if it is a barter transaction. These transactions can result in taxable income or tax-deductible expenses, or can result in the acquisition or disposition of capital property, eligible capital property, personal-use property, listed personal property, or inventory. GST/HST may be payable, and input tax credits may be available.
Most intangible assets are considered eligible capital property, as are incorporation costs. These costs are not fully deductible, but can be partially deducted through the cumulative eligible capital deduction.
The LiveSmart program has reached its target, and is no longer available to homeowners unless the pre-retrofit assessment was completed before August 16th. The Federal EcoEnergy incentives are still available.
For Quebec residents, we have added more information to our article on getting back CPP or QPP overpayments.
Taxpayers were able to make a recontribution to their RRIF in order to take advantage of the minimum withdrawal being reduced by 25% for 2008. This had to be done by April 14, 2009. If the tax return was filed without claiming the recontribution on line 232, an adjustment should be requested.June/July 2009
The table of historic returns on stock markets and other investments has been updated to December 31, 2008.
BC proposes to harmonize its 7% PST with the 5% GST to result in 12% HST, effective July 1, 2010. Many items that are currently PST exempt will not be subject to the provincial 7% portion of the HST.
On June 19, 2009, regulatory changes were filed which increased the amount of unlocking permitted from Ontario Life Income Funds (LIFs) from 25% to 50%. Changes were also made for old LIFs. Rules were also changed to provide pension plans with solvency funding relief.
Filing a return is the easiest way to establish your contribution room for a Tax-Free Savings Account (TFSA), even though the contribution room is not affected by taxable income.
Nunavut presented their budget on June 4, 2009. The Business Training Tax Credit is being implemented in 2009 to provide support for enhancing education. There were no other income tax changes announced, either personal or corporate.
When an individual earns income from the rental of real property, it may be considered business income instead of property income. When it is considered business income, the due date of the tax return is June 15th instead of April 30th.
Some vehicles, such as certain pickup trucks, do not fit the definition of an automobile (passenger vehicle). When company-owned vehicles such as this are used by an employee for personal use, a taxable benefit usually must be included in the employee's income. This calculation differs from the usual standby charge and operating cost benefit calculation done for automobiles. Effective for 2009, a reduced taxable benefit will be allowed for these types of motor vehicles in certain circumstances.May 2009
Federal Business Credit Availability Program (BCAP)
The Federal Government is providing assistance for Canadians and Canadian businesses to obtain financing.
We have added the Federal Children's Fitness Tax Credit to the calculator, as well as the Manitoba and Yukon Children's Fitness Tax Credit, and the Nova Scotia Healthy Living (Sport and Recreation) Tax Credit.
Nova Scotia presented their 2009 budget on May 4th. The small business tax rate will be cut in half over 3 years starting in 2011. Tobacco taxes have been increased by $10 per carton, the extension of the Healthy Living Tax Credit to include expenses of adults has been deferred, and the implementation of a provincial Transit Tax Credit has been deferred.April 2009
PEI presented their 2009 budget on April 16th. There were no income tax changes. The only tax measure announced was an increase in tobacco tax, of $5 per carton.
Premiums paid for private health plans, such as extended health benefits and dental plans, are eligible medical expenses for purposes of the medical expense tax credit. If you are an employee, part or all of these premiums are often deducted from your pay. Make sure you include them when calculating your total medical expenses.
Losses on shares and other capital property may be considered superficial losses and disallowed if they are repurchased within 30 days by the taxpayer or persons affiliated with the taxpayer, which includes the spouse, or an RRSP, TFSA, or RRIF of which the taxpayer or the taxpayer's spouse is the beneficiary. However, this rule can also create the transfer of a capital loss from a taxpayer to the taxpayer's spouse.
We have added the disability tax credit and public transit tax credit to the tax calculator, as well as the option of choosing whether the taxpayer or the spouse claims any dependent children. Previously, the calculator would have the dependent children claimed by the lower income spouse, and any unused amount was transferred to the higher income spouse. This worked in most situations, but there were cases where the claim for dependents was not properly utilized. We have also added comments that appear when the user hovers over certain input fields, to provide explanations for those items.
Cash rebates are available for energy efficiency improvements by homeowners, and for taxi operators who are transitioning their fleet to hybrid vehicles. This program ended March 31, 2012.
We have reorganized the dividend tax credit articles, and updated all tables with 2009 dividend tax credit rates.
Our tables compare taxes payable by province in 2009 for three different types of income - dividends eligible for the enhanced dividend tax credit, small business (non-eligible) dividends, and interest income.
Alberta presented their 2009 Budget on April 7, 2009, forecasting a large deficit for 2009-2010. There were no new income tax changes announced.March 2009
The Quebec government provides information (in French only) on government assistance offered if you are buying or renovating a house.
We have added links to information on housing and property in Ontario, as well as on the land transfer tax refund for first-time home buyers.
Manitoba has many programs to help homeowners, renters and landlords, including assistance with home repairs/renovations, rent, co-operative housing, and much more.
Saskatchewan has many programs to assist homeowners, including landlords, with home repairs and renovations.
We have added a link to the Residential Access Modification Program (RAMP), which provides grants of up to $5,000 for eligible wheelchair users to modify their home to be more wheelchair accessible.
Ontario presented their 2009 budget on March 26, 2009, announcing a tax reduction for the lowest personal tax bracket, and corporate income tax reductions. They also propose to combine their retail sales tax with the GST for a single value-added tax.
NL presented their 2009 budget on March 26, 2009, announcing enhancements to their low-income tax reduction, increases to their enhanced dividend tax credit, and an increase to the corporate income tax small business threshold.
We have added a table of 2009 corporate income tax rates, including business limits for small business deduction. This table will be updated as provincial budgets are released.
Manitoba presented their 2009 budget on March 25, 2009, announcing a reduction of the small business tax rate to zero effective December 1, 2010.
Yukon presented their 2009 budget on March 19, 2009.
New Brunswick presented their 2009 budget on March 17, 2009, announcing both personal and corporate tax reductions.
Quebec Refundable Home Renovation Tax Credit
Quebec residents, besides being eligible for the Federal home renovation tax credit, can also benefit from the new provincial refundable home renovation tax credit (for 2009 only), for eligible spending in excess of $7,500.
The Economic Statement announced two tax measures, including the provincial home renovation tax credit, as well as an increase in the minimum wage, and three other measures to help stimulate the economy.
Quebec presented their 2009 budget on March 19, 2009. They announced improvements to the refundable tax credit for child care expenses, introduction of a 10-year income tax holiday for certain new corporations, and an increase in the rate of the Quebec sales tax (QST).
Saskatchewan presented their 2009 budget on March 18, 2009
The information on the principal residence exemption has been expanded, and moved from the Glossary to its own page.
This article discusses the tax implications of owning a cottage or second home.
US estate tax may be payable by Canadian residents who own assets situated in the United States at the time of death. These assets could include real estate, stocks in US corporations, or personal property.
On our BC Government Benefits page, we have added a link to Rebates and Incentives for your Home on the LiveSmart BC website.
On our Ontario Government Benefits page, we have added a link to the OSCA website. The OSCA members are not-for-profit health and social service organizations that help people live at home.
Bill C-10, which includes many of the provisions of the 2009 Budget, received Royal Assent on March 12, 2009.
QuickBooks EasyStart Free Starter Edition software
Intuit is offering free accounting software for new and home-based businesses - no longer available.
We have posted a list of dates for upcoming budgets.February 2009
Just a reminder that there are many tax shelter gifting schemes, for which the donations claimed are being reassessed and denied by Canada Revenue Agency. A "tax shelter number" does not guarantee that the donation amount will be allowed.
If you earned employment income and paid taxes in two provinces, you would file a tax return for your province of residence on December 31. We have updated this article with more detail regarding those who have worked and paid taxes in Quebec, but do not reside there.
The Canadian Tax Calculator has been modified to allow the user to indicate that they are or are not eligible to receive the WITB. In the calculator, a link has been provided to our article on the WITB. The article explains eligibility requirements for this refundable tax credit.
The British Columbia 2009 Budget announced further reduction of the general corporate tax rate, reduction of the small business dividend tax credit rate, extensions of some temporary PST exemptions and introduction of some new PST exemptions.
The HRTC is a proposed tax credit which will only be available for the 2009 tax year, for eligible expenditures made after January 27, 2009 and before February 1, 2010.
Bill C-10, which includes many of the items from the Budget, passed First Reading on February 6.
We have added a new glossary item on self-employment income, discussing how it is reported on the tax return, with links to articles which will help you determine if your income is from self-employment, employment, or property.January 2009
Both tax calculators have been updated for 2009 tax changes from the January 27 Federal Budget. The Quebec Tax Calculator has been modified to include provision for the age amount and disability amount tax credits.
The Marginal Tax Rate Tables and Non-refundable Personal Tax Credit Tables for 2009 have been updated for tax changes from the January 27 Federal Budget.
We have updated the table of WITB factors for amounts that will apply on the 2008 tax return. A 2009 table will be prepared once the changes resulting from the 2009 Federal Budget have been finalized.
The January 27, 2009 Federal Budget includes several personal income tax reductions, and some corporate tax reductions.
CRA is not yet able to provide an answer as to whether there will be tax withheld from US dividends received in a TFSA.
The PEI 2008 and 2009 dividend tax credit rates for small business dividends have been revised as per legislation passed in 2008. The tables of marginal tax rates have also been revised, as has the Canadian Tax Calculator.
Check out our new Tax-Free Savings Account (TFSA) vs RRSP calculator to help determine which type of account is best for you.
Revised: December 20, 2022
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