What's New -> What's New 2010
What's New by Month in 2010
December 2010 wages, if not paid until January 2011, will be reported on a T4 for 2011, not 2010. There are some cases in which it is not necessary to prepare a T4 for an employee. Learn about filing T4 slips online - this can be done for up to 6 T4s starting January 2011, without any software required.
It's a little late, but we've finally updated our table of donation tax credit rates to show the 2010 rates, with notes to indicate which rates will change for 2011.
The expense limitations for passenger vehicles remains unchanged for 2011, with a ceiling of $30,000 (plus sales taxes) for capital cost allowance purposes, and no change in the maximum allowable deduction for interest ($300 per month) or leasing costs ($800 per month).
The limit on the amount that can be paid tax-free to employees using their own vehicles for business purposes remains unchanged for 2011, at $0.52 per km for the first 5,000 km driven, and $0.46 per km for each additional km. The rates for the Territories are slightly higher, at $0.56 and $0.50.
The operating cost taxable benefit rate will remain unchanged at $0.24 per km for 2011, and at $0.21 per km for automobile sales people.
The table of 2011 corporate income tax rates for Canada, provinces and territories is now available.
We have published the table of sales tax rates (GST, HST and provincial retail sales taxes) for 2011. Quebec's QST rate increases from 7.5% to 8.5% on January 1, 2011. The QC government website provides information on transactions which straddle the 2010 year end.
CRA has issued their annual Tax Alert regarding donation arrangements where taxpayers obtain donation receipts worth much more than the actual amount donated. Expect to be audited and your donation claim denied if you participate in one of these.
Bill C-47 received Royal Assent on December 15, 2010. It includes, among other things, changes related to Registered Disability Savings Plans (RDSPs), employee stock option changes, and indexing of the working income tax benefit (WITB).
The BC MSP premium rates will increase on January 1, 2011, by 6.14% for single people and families of 3 or more people, and by 6.86% for families of 2 people.
The 2010/2011 Income Tax Calculator for all provinces and territories except Quebec has been published. The 2010 & 2011 working income tax benefit (WITB) amounts used in the calculator have been estimated using the federal indexation factor. The WITB amounts for Alberta, BC and Nunavut differ from the other provinces, and we have not yet confirmed the 2010 or 2011 factors.
The 2010/2011 Income Tax Calculator for Quebec has been published. The 2010 & 2011 working income tax benefit (WITB) amounts used in the calculator have been estimated using the Quebec indexation factor.
The 2011 TD1 forms are now available from Canada Revenue Agency (CRA). If you are an employee, and some life changes in 2010 will result in changes to your non-refundable tax credits, you should provide updated federal and provincial TD1 forms to your employer. This will help ensure that the correct tax amounts are being withheld from your pay. The life changes could include a new baby or adopted child, getting married or divorced, turning 65, or becoming eligible for the disability tax credit (doctor certification required).
This article has been updated regarding the HST changes in 2010. Partnerships and sole proprietorships (self-employed individuals) in BC, Ontario and Nova Scotia will use the higher HST rate in the calculation of their ITCs based on capital cost allowance, even if only GST or a lower rate of HST was paid when the vehicle was purchased. There are no "interim" rates as there were when the GST rate was reduced in 2006.
The tables of non-refundable personal tax credits for 2011 for all provinces and territories except Quebec (separate table - see below) have been published.
The table of personal tax credits and deductions for Quebec has been updated with 2011 amounts. The indexation factor for Quebec for 2011 is 1.27%.
The tax rate tables have been updated for Canada and all provinces and territories, showing the combined federal and provincial/territorial personal income tax rates for 2010 and 2011 for eligible and non-eligible dividends, capital gains, and other income.
Once a trip log has been maintained for a vehicle for a continuous 12-month period, CRA has indicated they will "afford considerable weight" to a logbook maintained for a smaller sample period in subsequent years, as long as certain criteria are met.
The public is invited to provide online input prior to the preparation of the 2011 budget.
The effective date of registration is important, because it is the date that a new registrant becomes liable for collecting GST/HST on sales, and eligible to claim input tax credits on sales. If a business charges GST/HST on taxable sales before registering, the effective date of registration is the first date that GST/HST is collected. Otherwise, the effective date depends on whether the registration is mandatory or voluntary.
The government is inviting comments to be made by February 25, 2011, on their consultation paper regarding the taxation of corporate groups. This includes a discussion of different approaches to group taxation and loss utilization.
The maximum insurable earnings for 2011 has been set at $44,200, up from $43,200 in 2010. The premium rate has been increased to 1.78% from 1.73%.
A November 17th news release announced the suspension of the proposed tax reductions for 2011. The next budget will be tabled on February 15, 2011, with no new initiatives beyond what is statutorily required.
Haven't filed your 2000 tax return yet? Taxpayers are running out of time to file requests under the taxpayer relief provisions for the 2000 tax year and any reporting period that ended in the 2000 calendar year.
Why do you sometimes pay tax on the full price when you think you're buying something on sale? Many stores have in-store coupons that they apply, without the customer having to bring the coupon to the store themselves. Often, when a coupon is applied to reduce the price, the tax is charged on the full price before the coupon. When a GST/HST registrant is able to receive an input tax credit (ITC) for an item for which a manufacturers' rebate has been received, special rules apply to the ITC. When a vendor charges GST/HST on the full price before a coupon is applied, they must remit a portion of the coupon amount as GST/HST.
Our article on the changes to the CPP retirement pension indicated that the changes would not affect those currently collecting their CPP retirement pension. It will not affect the benefits of these people, but further contributions will be required starting in 2012 for those earning pensionable earnings, unless they have reached the age of 65, at which time it is possible to elect not to pay the contributions.
Budget 2010 proposed to allow a tax-deferred rollover of a deceased individual's RRSP/RRIF or RPP proceeds to the Registered Disability Savings Plan (RDSP) of a financially dependent infirm child or grandchild. This will be effective for deaths occurring on or after March 4, 2010. The actual transfer to the RDSP, however, cannot be made until after June 2011. Transitional rules are provided for individuals who die after 2007 and before 2011. Legislation was included in Bill C-47, introduced in the House of Commons on September 30th.
The maximum Canada Pension Plan pensionable earnings for 2011 will be $48,300, as compared to $47,200 for 2010. The rate remains unchanged at 4.95%, and 9.9% for self-employed. The maximum employer and employee contribution for 2011 will be $2,216.60, and the maximum self-employed contribution will be $4,435.20.October 2010
On October 27, 2010, a 15% reduction in personal income tax rates was announced for the two lowest tax brackets, effective January 1, 2011.
Taxpayer relief provisions are in effect which would assist any individual or business unable to meet their tax obligations because of Hurricane Igor. Requests are considered on a case-by-case basis.
Bill C-47 was introduced in the House of Commons on September 30th, 2010, to implement measures introduced in the March 2010 Budget.
Effective July 2011, Quebec's solidarity tax credit replaced three other tax credits. Individuals must meet eligibility requirements to receive this tax credit, and must be registered for direct deposit to receive payment of the tax credit.
Capital gains can be eliminated by donating capital property, such as securities, to qualified donees. This should be done by November or early December to avoid the busy season and ensure the transactions are completed before year end.
100% capital cost allowance in the year of purchase is still available for computers purchased after January 27, 2009 and before February 2011.
The superficial loss rules provide a method for capital losses to be transferred to a spouse. The spouse must hold the shares for more than 30 days for this to work, so to do this for 2010 you would have to act soon.August 2010
As a result of the HST being introduced in BC and Ontario, there are many new forms and publications related to GST and HST. On our GST/HST page under the GST/HST Topics for Businesses, we have added a link to all GST/HST forms and publications.
The 2010 Tax Comparison by Province has been updated to include the tax changes in Nova Scotia and Newfoundland and Labrador. There are now 2 tables, one comparing taxes paid by a single person, and one comparing taxes paid by a married person with 2 children, with the spouse having no income.
Draft legislative proposals were released for consultation on August 27, 2010. These proposals are to implement tax measures from Budget 2010 as well as several previously announced tax initiatives.
A loan by an employer or a third party to an employee, or the subsidization of an employee loan, may result in a deemed taxable benefit being included in the income of the employee. However, when a home relocation loan to an employee results in a taxable benefit being included in the employee's income, a home relocation loan benefit deduction is available to the employee, which would partially offset the taxable benefit.July 2010
The QC My Account Online can now be used to claim the QST credit, obtain information on claiming the QST credit or the credit for individuals living in northern villages, or to claim the tax credit for home improvement and renovation, or adjust a claim.
We have added a table showing most of the Quebec tax credits and deductions that are adjusted for inflation each year. Amounts for 2010 and 2009 are included.
A gift or award given to an employee is usually a taxable benefit to the employee. Canada Revenue Agency now has an online series of questions which can be answered by an employer to determine if there is a taxable benefit for any item provided to an employee.
Bill C-9, the Jobs and Economic Growth Act, which implements certain provisions of the 2010 Budget, received Royal Assent on July 12, 2010.
Several provinces have tax credits which are paid in combination with the GST/HST credits. Some of these are paid quarterly, and some are paid annually. The new BC HST credit is one of these, and will be paid for the first time this month.
The Nova Scotia and Newfoundland and Labrador tax rates have been updated in the Borrow to Invest Calculator, TFSA vs RRSP Calculator, and RRSP vs Mortgage Calculator. Saskatchewan enhanced dividend tax credit rates were updated in the Borrow to Invest Calculator.June 2010
A June 25th news release announced that Canada Revenue Agency acknowledges that there has been genuine confusion about the TFSA rules, and will be as flexible as possible when a genuine misunderstanding of the rules has occurred. The June 30th deadline for responding to a TFSA return letter has been extended to August 3, 2010.
A little late, but we've now added a page detailing the personal tax changes from the NL March 2010 budget.
The enhanced dividend tax credit for NL for dividends received from January to June 2010 is automatically reduced from the 2009 rate due to the reduction of the gross-up percentage. Eligible dividends received from July to December will be subject to the higher dividend tax credit rate proposed in the NL 2010 Budget.
The Canadian Tax Calculator has been updated to reflect the income tax changes in the 2010 Budgets for Nova Scotia and Newfoundland & Labrador.
The tax rate tables have been updated to reflect the changes in the 2010 Budgets for Nova Scotia and Newfoundland & Labrador.
It appears that many people did not understand that a TFSA withdrawal does not increase contribution room until the following year. This article deals with what must be done if you have an excess contribution.
Businesses which are registered to collect GST/HST can recover the GST/HST that they have paid, with certain temporary exceptions for large businesses. We have added information on these temporary restrictions, with links to detailed information on the Ontario Ministry of Finance website.
Businesses which are registered to collect GST/HST can recover the GST/HST that they have paid, with certain temporary exceptions for large businesses. We have added information on these temporary restrictions, with links to detailed information on the BC Ministry of Finance website.
See our new article on Place of Supply Rules for goods, services, and intangible personal property (IPP), some of which have changed effective May 1, 2010. Information is also included regarding HST self-assessment and rebates of the provincial component of the HST.
Cottage owners may apply to defer all or a portion of the increase in property taxes resulting from the 2010 general reassessment of property values in Manitoba.
Revenu Quebec has created My Account in order for individuals to securely access information about their provincial tax file.
The first payments of the Ontario Sales Tax Transition Benefit will be made to Ontario residents this month. A new link has been added to the OSTTB information, to a Canada Revenue Agency Questions and Answers web page.
Most rebates of the provincial component of the HST regarding residential energy will be provided to consumers on the supplier invoice. For purchases of residential energy products such as wood stove pellets and firewood, consumers can apply to the government for a residential energy rebate regarding the provincial component of the HST.May 2010
The BC Ministry of Finance web page Jobs and the Economy - Facts about the HST, includes information for businesses and individuals, and includes a document which shows in detail which items will be subject to a higher tax under the HST, and which ones will not.
This Ontario Ministry of Finance web page has tables which show in detail which items will be subject to a higher tax under the HST, and which ones will not.April 2010
The Consumption Tax Rebate and Transition Act, eliminating the Provincial Sales Tax (PST) and preparing BC for the HST, was passed in the BC Legislature on April 29th.
The Department of Finance has released the draft legislation and explanatory notes regarding proposed Tax-Free Savings Account technical changes that were announced in October 2009.
PEI tabled their 2010 budget on April 23rd, with no income tax changes announced.
The Taxpayers' Ombudsman is responsible for ensuring that Canada Revenue Agency respects the service rights in the Taxpayer Bill of Rights.
The Nova Scotia 2010 budget was tabled on April 6th, announcing a new high-income personal income tax bracket for 2010, offset by an elimination of the high-income surtax. The HST rate is being increased to 15% effective July 1, 2010. Two new refundable tax credits were introduced for low-income individuals/couples.
The Nunavut 2010 budget was tabled on March 8th. The Nova Scotia 2010 Budget will be tabled on April 6th.March 2010
The Quebec 2010 budget was tabled on March 30th, with the introduction of a health contribution as of July 1, 2010, further increase of the QST in 2012, and a new solidarity tax credit to replace 3 other tax credits.
The Yukon 2010 budget was tabled on March 25, 2010, with no new tax changes announced.
Newfoundland & Labrador's 2010 budget was tabled on March 29th, with reductions in the top 2 personal tax rates, increases to the age amount tax credit and Low Income Senior's Benefit, increase to the enhanced dividend tax credit, and reduction of the small business corporate income tax rate.
Ontario's 2010 budget was tabled on March 25th, with no new income tax changes announced.
Ontario will table their 2010 budget on March 25th, Newfoundland & Labrador on March 29th, and Quebec on March 30th.
Manitoba's 2010 budget was tabled on March 23rd, announcing a new Tuition Fee Income Tax Rebate Advance, expansion of the Fitness Tax Credit, and a new refundable Fertility Treatment Tax Credit.
Saskatchewan's 2010 budget was tabled on March 24th, with no new income tax changes announced.
The table of historical returns on stock markets and other investments has been updated to December 31, 2009.
A GST registrant in BC or Ontario should not be invoicing or collecting the provincial portion of the HST prior to May 1, 2010, for goods or services provided in BC or Ontario, even if the goods or services are to be provided on or after July 1, 2010. Some non-consumers may have to self-assess the provincial portion of the HST.
We have added links to several information sheets published by CRA regarding the transition to HST, and point-of-sale rebates for various categories such as books, newspapers, prepared food and beverages, feminine hygiene products and children's goods.
We have added links to several information sheets published by CRA regarding the transition to HST, and point-of-sale rebates for various categories such as books, motor fuels, feminine hygiene products and children's goods.
The caregiver tax credit may be available to you if a parent or grandparent over 65 lives with you, even if they are not your dependent. This credit may also be available if certain other dependent relatives live with you. When you are able to claim the caregiver credit (or could have, if the relative had no income) for a relative who is eligible for the disability amount tax credit, you may also be able to transfer to yourself any unused portion of their disability tax credit.
In order to avoid doing an adjustment to your 2009 tax return later, RRSP contributions made in the first 60 days of 2010 should be reported on Schedule 7 of your 2009 tax return, even if you are not claiming the deduction for 2009.
Budget 2010 includes expansion of CCA Class 43.1 and Class 43.2, which provide accelerated capital cost allowance at the rate of 30% or 50% per year. The Budget also includes proposals to enhance and clarify the special GST/HST accounting method available for the direct selling industry. The Government is creating the Vehicle and Equipment Financing Partnership to increase the availability of credit at market rates for dealers and users of vehicles and equipment.
There were no new changes announced to the amount of personal tax credits or tax brackets, or to tax rates. Changes are being made to the way Universal Child Care Benefits (UCCB) are included in income by single parents. Some beneficial changes are proposed related to Registered Disability Savings Plans (RDSPs). The tax deferral election for stock options is repealed, and provisions are proposed to assist taxpayers who previously used this election.
The 2010 Budget includes the change to HST. There will be a refundable BC HST credit of $230 per person for low and modest income individuals and families. MSP premiums will be increased for 2011. A property tax deferment program is being introduced for 2010 for families with children. The PST on private sales of vehicles, which are not subject to HST, will increase to 12% effective July 1, 2010. See details on these and other changes in the BC Budget documents.February 2010
Most of the time, the amount that can be deducted for food, beverages and entertainment is 50% of the lesser of the actual cost, or a reasonable amount under the circumstances. This article has been revised to add information on what constitutes a reasonable amount.
See the comparison of taxes paid on various levels of employment income for all provinces and territories for 2009 and 2010.
No new tax changes were announced in the Alberta 2010 Budget.January 2010
We have finally completed the much more sophisticated Quebec Tax Calculator, similar to the Canadian Tax Calculator. It now calculates the tax for taxpayer and spouse, with choice of the year 2009 or 2010. It includes the most common Quebec tax credits.
The TFSA vs RRSP Calculator, which helps a person decide if it is better to contribute to a TFSA or to an RRSP, has been updated to include 2010 income tax rates.
There is no need for tax return preparation with Telefile for Seniors. Using this service, eligible seniors can make a phone call and answer some yes/no questions in order to file their tax return for 2009.
Updated rates are available for 2010 limits for Money Purchase RPPs, DPSPs and Defined Benefits, and for 2011 limits for RRSP contributions.
The table of 2010 corporate income tax rates has been published, including the general and small business rates, and small business deduction limits.
From a tax perspective, certain types of investments are better to be held in a non-registered account than in an RRSP/RRIF or TFSA. This depends mostly on the tax treatment of the income from the investments. We have summarized our opinions on where to place different types of investments.
See also Prior Years:
Revised: December 20, 2022
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