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What's New by Month in 2021
Life in the Tax Lane January 2022
Topics: COVID-19 Business Subsidy Update | Post-Assessing Corporate Reviews - Advertising And Promotions | 2021 Economic and Fiscal Update | Valuation of Shares | Parents Assisting Children With a Home Purchase.
2021/2022 Investment Income Tax Calculators
These calculators for all provinces show the big difference in taxes payable on different types of investment income. Even when the age credit and OAS are clawed back, Canadian dividends/capital gains result in the least taxes payable when compared to other types of income such as foreign dividends and interest.
RRSP contributions made from Jan 1 to Mar 1, 2021 should have been reported on your 2020 tax return last year. If not, an adjustment to your 2020 return is needed. Report contributions from Mar 2/21 to Mar 1/22 on your 2021 tax return.
Tax-Free Motor Vehicle Allowances 2022
The per-km amounts that may be paid tax-free to employees or officers will increase to 61 cents per km for the first 5,000 km and 55 cents per km for each additional km.
For the Territories, the rates are increased to 65 cents per km for the first 5,000 km and 59 cents per km for each additional km.
Automobile Operating Cost Benefit 2022
The prescribed rate used to determine the operating cost taxable benefit to an employee for an employer-owned vehicle is increased to 29 cents per km.
Automobile Sales People Operating Cost Benefit 2022
The prescribed rate used to determine the operating cost taxable benefit to an automobile sales person for an employer-owned vehicle is increased to 26 cents per km.
Passenger Vehicle Expense Limitations 2022
The 2022 expense limitations for passenger vehicles will increase for 2022 for monthly lease costs to $900, and capital cost to $59,000 for ZEVs and $34,000 for non-ZEVs.
COVID-19 Federal Benefits Expanded
A Dec 22nd announcement details expansion of eligibility for businesses and individuals in relation to lockdowns, making capacity reductions eligible for benefits.
COVID-19 Business Recovery Programs Continued
On Dec 21, 2021, CRA announced details of the new programs replacing CEWS and CERS, for October 24, 2021 to May 7, 2022.
Reduction or Deferral of Capital Gains
There are a few ways to reduce or defer tax on capital gains: Capital gains exemption; Principal residence exemption; Capital gain reserve; Donating the property; Transfer to spouse on death.
Tax Implications of Owning a Cottage or 2nd Home
Principal residence exemption and cottages; Renting out the cottage; Tracking the cost of the cottage AND of your home.
Immediate Expensing of Capital Assets for CCPCs
Because there is no draft legislation yet for this 2021 Budget proposal, it cannot be used, and CRA must reassess businesses who have claimed this accelerated CCA.
Federal Economic and Fiscal Update - December 14, 2021
No mention of a change to the capital gains inclusion rate; enhanced tax credit for teachers; small business air quality improvement tax credit; underused housing tax; pollution pricing proceeds to be returned to farmers.
2021 Canada Workers Benefit (CWB) Increases
The 2021 factors for the CWB have been updated for AB, NU and QC, with significant increases.
2021/2022 Quebec Income Tax & RRSP Savings Calculator
The detailed Quebec 2021 and 2022 calculator is now available to help you with your tax planning.
2021/2022 Canadian Income Tax & RRSP Savings Calculator
The Climate Action Incentive has been removed from the calculator, and the Canada Workers Benefit amounts for AB and NU have been updated with enhanced amounts.
No Climate Action Incentive (CAI) on 2021 Tax Returns
As proposed by the 2021 Federal Budget, the CAI will be paid quarterly starting in July 2022 with a double payment, instead of being claimed on the tax return. This affects AB, MB, ON, and SK.
Life in the Tax Lane December 2021
Great topics!: 2022 Indexation; COVID personal and business support; Falsified employment records; Rental property deductions; Disability tax credit fee restrictions; OAS clawback planning.
2021 and 2022 Canadian Income Tax & RRSP Savings Calculator
Great for tax planning! For all provinces and territories except Quebec (Quebec coming next week). Of course, 2022 budgets will probably change things.
Quebec Economic and Financial Update Nov 25, 2021
A few highlights: Enhancements of: childcare tax credit and senior assistance amount; 1-time exceptional cost of living allowance for low- and middle-income earners; Extension of enhancement to student financial assistance.
Bill C-2 Tabled for Additional COVID-19 Relief Measures
This bill extends the CRHP, CRCB and CRSB until May 7, 2022 and introduces additional business and worker supports.
Taxpayer Relief Deadline December 31, 2021
Time's running out to file requests under the taxpayer relief provisions for the 2011 tax year and any reporting period that ended in the 2011 calendar year. If a tax debt arose from an earlier tax year, penalties/interest accumulated from 2011 to 2020 could still be reduced as a result of a 2021 request for leniency.
Ontario Budget 2022 Consultations
Ideas can be shared for the Ontario 2022 Budget by mail or email.
Manitoba Budget 2022 Consultations
Public meetings start Nov 29, telephone town hall Dec 7. The deadline for consultation submissions by email is January 31, 2022.
Frequent Trading in a TFSA Can Be a Problem!
If you carry on the business of day-trading in your TFSA, your gains will be income gains, with 100% of the gain subject to tax!
Ontario Seniors' Home Safety Refundable Tax Credit
This tax credit is for renovations or improvements that make homes safer and more accessible, available for 2021, proposed extension to 2022.
Ontario Refundable Jobs Training Tax Credit
Ontario residents aged 26 to 65 with a Canada Training Credit balance for 2021 can claim a maximum $2,000 provincial tax credit for 2021, based on eligible tuition fees paid in the year.
Old Age Security (OAS) Clawback
The OAS clawback threshold will increase by 2.4% to $81,761 for 2022. Capital losses carried forward won't reduce your clawback.
Lifetime Capital Gains Exemption
The exemption for qualified small business corporation shares for 2022 is $913,630, and for qualified farm or fishing property remains at $1 million.
The TFSA dollar limit for 2022 is once again $6,000, bringing the cumulative total to $81,500 for anyone born in 1991 or earlier.
Workers accumulate $250 of credit each year starting 2019. Refundable tax credit can be claimed for eligible tuition, up to CTC balance at previous year end.
2021 Ontario Economic Outlook and Fiscal Review - Nov 4, 2021
New Ontario Staycation Refundable Tax Credit for 2022, extend Jobs Training Tax Credit and Seniors' Home Safety Tax Credit, both refundable, to 2022.
Last Trading Date for 2021 Gains and Losses to be Recorded in 2021
The last trading date in 2021 for Canadian and US publicly traded stocks is Wednesday, Dec 29th. Stocks purchased or sold after this date will settle in 2022, so any capital gains or losses on sale will apply to the 2022 tax year.
Disability Tax Credit Promoters Restrictions Regulations
An injunction was granted Nov 4, 2021 stopping the implementation of the $100 fee cap for for submitting an application for the disability tax credit. It's very enlightening to read the Court's decision.
CPP and QPP Pensionable Earnings and Rates for 2022
The maximum pensionable earnings for 2022 will be $64,900, up 5.4% from 2021. The CPP contribution rate increases to 5.70%, with max per employee $3,499.80, up 10.5% from 2021. The QPP rate increases to 6.15%, with max per employee $3,776.10, up 10.2% from 2021.
2022 Non-refundable Personal Tax Credits
We've published the tables of non-refundable tax credits for 2022 for Canada and all provinces and territories except Quebec.
Quebec 2022 Tax Credits and Deductions
Our table of Quebec credits and deductions subject to indexation has been updated for 2022.
Life In The Tax Lane November 2021
As usual, a very interesting 10-minute video! Topics: New COVID-19 benefits | CPP Disability | New disability tax credit form/application tool | RESPs.
2022 Basic Tax Calculator Revised re PEI Change
The calculator has been revised to reflect the reduced PEI non-eligible dividend tax credit.
Prince Edward Island 2022 Tax Tables Revised
PEI's Bill 37 reduced the non-eligible dividend tax credit rate for 2022.
Disability Tax Credit Online Application
There is now an online application for medical practitioners to complete which should make the application process MUCH easier.
Basic Tax Calculator For 2022 & Earlier Years
This very simple calculator shows taxes payable, average and marginal tax rates for all provinces for employment/other income, capital gains, eligible and non-eligible Canadian dividends. Compare 6 years of taxes payable by province.
Combined federal and provincial/territorial marginal tax rates for capital gains, both types of Canadian dividends, and other income. Things could change with 2022 budgets.
Is Your Cryptocurrency (Bitcoin) a Foreign Asset?
If so, it may have to be reported on Form T1135. There are steep penalties for not reporting specified foreign property.
BC PST Rebate on Select Machinery and Equipment
The rebate period has been extended by 6 months to March 31, 2022. Applications must be received by September 30, 2022.
Washing Trades Can Reduce Foreign Exchange Costs
Some brokerages still don't have US$ locked-in RRIFs. Washing trades can save money when purchasing US$ investments.
Private Health Services Plans and Health Spending Accounts
These plans pay the medical expenses of employees. If set up properly, the payments are tax deductible for employers and tax-free for employees.
Motor Vehicle Expenses Related to Rental Properties
If you own one or more rental properties, the motor vehicle expenses you can deduct depend on a few factors. Keep all receipts, have a mileage log.
International Students Studying in Canada
International students studying in Canada may have to file a Canadian income tax return.
Conversion of RRSP to RRIF - Partial Conversion Prior to Age 71
Doing this when you turn 65 makes available the pension tax credit and pension splitting. Partial conversion of an RRSP to a RRIF is possible.
Tax-Free Savings Account (TFSA) Withdrawals
When a withdrawal is made from a TFSA, it is added back to your contribution room in the following year. Considering a withdrawal soon? Do it before Dec 31 so it increases your contribution room in January.
CEBA Payroll Stream Eligibility Reversals October 2021
Have you been contacted by your financial institution saying you're not eligible for that CEBA loan you got a long time ago?
Life in the Tax Lane October 2021
This month's 10-minute video topics:
Old Age Security (OAS) Clawback
If you have capital losses carried forward and unrealized capital gains, and are not going to be collecting your OAS pension for a year or so yet, you may be able to do something now to avoid or reduce an OAS clawback in the future.
Donating Shares or Other Capital Property Can Eliminate Capital Gains
If you donate property instead of cash, you may be able to save some tax money. Best to do this by the end of November for shares, or possibly earlier for mutual funds.
Transferring Capital Losses to a Spouse
Capital losses can be transferred to a spouse by utilizing the superficial loss rules. Your spouse must hold the shares for more than 30 days after your disposition before selling the shares.
2022 Employment Insurance (EI) Rates
2022 EI rates are frozen at 1.58%/2.212% for employees/employers, but the Maximum Insurable Earnings (MIE) has increased by 7.1% to $60,300. Employee/employer maximums increase by 7.1% to $952.74 and $1,333.84. Quebec maximums increase by 8.9% to $723.60 and $1,013.04.
Free in 30! / Financial Freedom
This is a plan to help you go from having no savings to being financially independent in 30 years or less.
Newfoundland and Labrador Dividend Tax Credits
Effective Jan 1, 2022, the non-eligible dividend tax credit is reduced from 3.5% to 3.2%, and the eligible dividend tax credit is increased from 5.4% to 6.3%.
Newfoundland and Labrador Physical Activity Tax Credit
NL has a new refundable tax credit of up to $2,000 (x 8.7% = $174) per family, started in 2021, for eligible fitness expenses.
How Much Will You Have In 50 Years If You Save $1 Per Day?
You'll have $176,123 at a 7.5% rate of return, or $880,615 if you save $5 per day.
Government of Canada Debt to 2021
When the debt of all levels of government is included, each man, woman and child in Canada owes $72,911! We need to pressure all levels of government to reduce our debt.
Life in the Tax Lane September 2021
Topics: Federal Consultations | Workspace in Home Expenses - CRA Reviews | Ensuring Audit Requests Are Answered | Medical Travel Expenses (COVID) | German Pensions | Multiple Children/One RESP Account | Fuel Cards to Independent Contractor Drivers | Wedding Costs - Tax Evasion?
Reduce Income Tax Deductions Now for Current RRSP Contributions
Made your 2021 RRSP contributions already? You can complete a CRA form for your employer to deduct less income tax. Self-employed may be able to reduce instalments.
Tax Deducted from RRSP or RRIF Withdrawals
The withholding tax rate depends on the amount withdrawn as well as other factors, including multiple lump-sum withdrawals.
School's Starting Soon - Students and Income Tax
Tax issues for students and/or their parents, such as eligibility for tuition, education and student loan interest tax credits, private school tuition fees, deducting moving expenses, and child care expenses.
What can be deducted, and what must be capitalized? Is your income property income, or business income? Learn the basics!
2021 Top Marginal Tax Rates in Canada
There are 8 provinces with a top marginal tax rate over 50%. The average tax rate for a person with $100,000 of "other income" varies from 22.4% (BC) to 30.4% (QC).
Manitoba Pension Unlocking Amendments
Effective Oct 1/21, Manitobans will have easier access to locked-in pension funds, with age 65+ able to unlock fully, and unlocking for any age with certain financial hardships.
Canada Recovery Hiring Program (CRHP) for Employers
The CRHP is available for Jun 6 to Nov 20/21 (periods 17 to 22), and provides a subsidy based on the increase in remuneration paid from the base period. For periods 17 to 21, the CRHP subsidy is claimed if it is greater than the CEWS subsidy.
CRB, CRSB and CRCB Extended to Oct 23, 2021
The recovery, sickness and caregiver benefits have been extended to Oct 23, 2021, and the CRB number of weeks is increased to 54 weeks.
The wage subsidy has been extended for 4 weeks, at a maximum rate of 20%. The maximum rate for period 20 ending Sep 25th is increased to 40%.
The rent subsidy and lockdown support have been extended for 4 weeks, at a maximum rate of 20%, with the lockdown support continuing at 25%. The maximum rate for period 20 ending Sep 25th is increased to 40%.
Capital Gains Exemption and Intergenerational Transfers
Bill C-208 is now law, and allows intergenerational transfers of certain corporations to utilize the Lifetime Capital Gains Exemption. Changes are expected later this year.
Transfer Shares to Your Registered Account - But Not at a Loss!
If you transfer shares or other investments on which you have a loss to a registered account, the loss will not be deductible.
If you transfer shares or other investments on which you have a gain to a registered account (or to someone else's account), you will have a taxable capital gain.
Life in the Tax Lane - August 2021
Add'l OAS pmt; CRA collections/business; tax-driven bankruptcies; Family members informal agreements; Travel allowances; Bulk taxpayer relief; TFSA excess contributions. Lots of great content as usual!
Guaranteed Income Supplement (GIS)
Low-income seniors collecting Old Age Security (OAS) can receive GIS. We've added examples of GIS clawback calculations using the increased exemption amounts.
2021 Tax Comparisons Dividends vs Interest
Taxes paid at varying levels of eligible and non-eligible dividends and interest for all provinces and territories. The lowest-tax provinces for $100K of eligible dividends are BC and NB.
2021 Seniors Tax Comparisons Dividends vs Interest
Compare taxes paid in each province/territory by a senior with eligible dividends vs other income (foreign dividends, interest, etc.) - see how the taxes (including OAS clawback) are significantly lower with eligible dividends. BC is the lowest tax province in this analysis.
2021 Tax Comparisons Employment Income
BC, Ontario, and Alberta are again the lowest tax provinces for a single person earning $50,000 or $100,000. See also comparisons for a single income family with 2 children.
Digital Assets & Estate Planning
Do you use Facebook, PayPay, Amazon Kindle, Apple iTunes, cryptocurrency wallets, OneDrive, licensed accounts or other digital assets? It's important to document passwords/private keys and other information for your executor.
Canada Workers Benefit (CWB) 2021
Our CWB 2021 tables are now available, showing the enhanced amounts for most provinces and territories. However, since the amounts for AB, NU and QC depend on provincial reconfiguration agreements which have not yet been finalized, we have used the 2020 amounts increased for inflation for their amounts.
BC's Budget 2022 consultations are now open, until Sep 30, 2021. To make a presentation to the Select Standing Committee, indicate your interest in this by Friday, Jul 16, 2021.
CERS Lockdown Support for Restricted Activities
A business may not have to be completely locked down from conducting business in order to qualify for the Canada Emergency Rent Subsidy 25% lockdown support top-up.
Information for Business Owners
Our Small Business Income Tax page has lots of helpful articles on the following topics:
Life in the Tax Lane July 2021
CEWS Audits; CERS lockdown support - restricted activities; Insurable employment; Impending US tax changes; US MLPs withholding taxes; Shareholder advances/poor records.
CPP Retirement Pension - Did You Retire Recently?
If you retired recently, you may not be getting the CPP benefit related to your contributions re enhanced CPP.
CPP Retirement Pension Splitting
You may be able to save tax by sharing your CPP retirement pension with a lower-income spouse, but clawbacks of OAS, spousal amount and age amount must also be considered.
Interest Expense re Funds Borrowed to Purchase Investments
Good record-keeping needed; Spousal attribution re joint lines of credit; Disappearing source rules; Interest paid to non-resident; Interest exceeding investment income; Income or capital - lots to learn!
Find out how to change your return through your CRA My Account, through your tax software, or by mail to CRA.
Rule of 72 Calculator - Good to Know!
Use our calculator to see how long it will take to double your investment or your savings based on your rate of return.
Child Care Costs - Summer Activities
Make sure you keep the receipts for summer activities for your children that could qualify as child care expenses. See our article for allowable expenses and limits on the deduction from income.
Election to Stop Paying CPP Contributions
An employee or self-employed person can elect to stop paying CPP contributions once they turn 65. Employees file form CPT30 with their employer. Self-employed make the election on their tax return for that year.
Newfoundland 2021 Budget - May 31, 2021
Personal tax increases for 2022 for taxable income over $135,973, with 3 additional tax brackets, highest rate increased from 17.3% to 21.8%; Physical activity tax credit will refund up to $2,000 per family; Sweetened beverage tax; Tobacco tax increase.
Successor holder vs Beneficiary - big differences! Secondary beneficiaries; Named beneficiaries and probate; No successor holder or beneficiary.
Do You Need a Tax Accountant or a Tax Lawyer?
There are different categories of tax professionals in Canada. Sometimes taxpayers may need help determining which tax professional to consult with.
Life in the Tax Lane June 2021
- Estate Planning - Millennials
TFSA Maximizer Schemes / Mortgage Investment Company (MIC)
CRA has issued a warning about this type of scheme, and Jamie Golombek has an interesting article about it.
Shareholder/Employees Wages Credited to S/H Loan Acct - Not CEWS Eligible
A CRA technical interpretation states that wages paid to a shareholder loan account, or wages paid and then returned to the corporation with a credit to a s/h loan account are not eligible remuneration for CEWS.
CEWS: Salary Paid Retroactively to an Employee
A CRA technical interpretation concludes that wages paid to an employee retroactively in respect of a week in prior qualifying periods can be considered eligible remuneration for CEWS.
Govt to Reimburse Self-Employed Who Repaid CERB
Those who received CERB based on gross self-employment income of $5,000 or more and have repaid benefits can apply for a refund.
Unlocking Your Locked-In Pension Accounts
Under some circumstances, all or a portion of locked-in retirement accounts can be unlocked.
Can A Spousal RRSP be Combined With a Non-Spousal RRSP?
A taxpayer can combine their spousal and non-spousal accounts, but after the combination the account is a spousal RRSP. Attribution rules will apply to withdrawals made by the taxpayer for recent contributions made by the spouse.
We apologize for the feed problems lately. Feedburner will be discontinuing email subscriptions in July, so we've been trying to find a replacement for this, and subsequently making changes to the feed, which has obviously caused problems. We've gone back to the old feed format now, which still seems to be a problem. Hopefully you'll be patient while we work out the bugs. We won't be replacing the email version of the feed which sends updates more often than monthly. If you're using the email version, please see other options above.
Retention of Books and Records
Make sure you're aware of how long you must retain source documents (receipts, invoices, tax slips, investment trade confirmations, etc) and other records for your personal tax return and for your business.
2021 Sales Tax Rates - GST/HST, PST, RST, QST
There are no changes to sales tax rates so far in 2021.
New Brunswick Personal Tax Changes
On May 11, 2021, New Brunswick tabled Bill 48 to reduce their lowest personal tax rate to 9.40%, and increase the Low Income Tax Reduction threshold.
Newfoundland and Labrador 2021 Budget Date
Newfoundland and Labrador's 2021 budget will be delivered on Monday, May 31, 2021.
Do you know your rights and responsibilities as an employee or employer? Learn about minimum wages rates, vacation and statutory holiday entitlement. New information on COVID-19 changes for many provinces.
Detailed Canadian Tax Calculator 2021 and 2020
Updated for 2021 budget changes including enhanced Canada Workers Benefit, ready for your 2021 tax planning.
Start Your Tax Planning for 2021
Plan ahead so that you are prepared to file your 2021 tax return next year without too much difficulty. Most important to do during the year: store all tax-related documents in one place. If your tax situation is getting more complicated, find a tax professional now, not next tax season!
Disability Supports Deduction for 2020 and 2021
Bill C-30 includes Disability Supports Deduction adjustments for 2020 and 2021 for individuals who have received COVID-19 benefits.
Temporary Automobile Standby Charge Adjustment for 2020 and 2021
Bill C-30 includes provisions to allow employees to use their 2019 automobile usage in order to access the reduced standby charge in 2020 or 2021.
Temporary Automobile Operating Cost Benefit Adjustment for 2020 and 2021
Bill C-30 includes provisions to allow employees to use their 2019 automobile usage in order to access the reduced operating cost benefit in 2020 or 2021.
Bill C-30 Budget Amendment Act, 2021, No. 1
This Bill includes provisions proposed in Budget 2021 as well as proposals made earlier regarding COVID-19.
Barter and Cryptocurrency Transactions
These can result in taxable income and sales taxes payable. CRA investigations; taxpayer responsibilities.
Immediate Expensing of Capital Assets for CCPCs
The 2021 Federal Budget proposed to allow the purchase by CCPCs of certain capital assets to be immediately expensed, if available for use by Dec 31, 2023.
- Federal Budget 2021
COVID-19 2020 Benefits Repaid in 2021
If you repaid 2020 COVID benefits in 2021, this can be deducted on your 2020 tax return, as proposed in the Federal 2021 Budget.
Medical Expense Tax Credit (METC)
We've added information re: claiming medical expenses for a former spouse; defining the 12-month time period; and what if there is a spouse and a common-law partner?
Late-Filed CEWS and CERS Amendments
It is possible to amend a CEWS or CERS claim after the deadline, in certain circumstances, but this must be done within 30 days after the later of April 21, 2021 and the applicable filing deadline.
BC 2021 Budget - April 20, 2021
PST exemption electric bicycles;
Federal 2021 Budget - April 19, 2021
No projected end to deficits;
Superficial Losses on Sale of Shares or Other Capital Property
The loss on the sale of shares can be disallowed if shares were purchased in the period 30 days prior to or 30 days after the date of sale. See CRA's superficial loss calculation for when fewer items are bought than were sold during the period.
Quebec Tax Return/Payment Deadline Extended to May 31st
Although Quebec has extended the due date for tax returns, federal tax returns still have a due date of April 30th.
There are tax consequences if a principal residence or cottage is rented out, or if a rental property becomes a principal residence or personal-use property.
Service Canada Retirement Income Calculator
We've determined a work-around for this calculator's problem of not allowing input of the monthly CPP/QPP income in some circumstances.
Generally, the tax credit for the first $200 of donations is at the lowest tax rate, and the remainder at the highest tax rate, but there are some exceptions to this. Donations to a U.S. charity might also be eligible for the tax credit.
Capital gains on the sale of Qualified Small Business Corporation (QBC) shares or Qualified Farming or Fishing Property can be reduced or eliminated by the up to $1 million exemption.
What Investments Can Be Held in a Registered Plan?
Many investments are "qualified" investments for registered plans, but some are non-qualified, or even prohibited. The plan holder/beneficiary could be penalized for holding these investments.
BC 100% PST Rebate for Certain Capital Assets
This rebate is available for certain asset purchases made by a corporation from Sep 17, 2020 to Sep 30, 2021.
Manitoba 2021 Budget - April 7, 2021
No personal or corporate income tax rate changes; New Teaching Expense Tax credit and Education Property Tax Rebate; RST changes; Business - health/education tax levy changes; Revisions to Interactive Digital Media Tax Credit and Small Business Venture Capital Tax Credit.
Saskatchewan 2021 Budget - April 6, 2021
Active Families Benefit restarted; Home Renovation Tax Credit; Small Business corporate tax rate to be increased 2022 and 2023; Non-eligible dividend tax credit reduced for 2021; Road use fee electric vehicles; changes to sales tax and education property tax.
What Kinds of Income are Not Taxable?
Some non-taxable income is not reported on tax returns. Some must be reported and later deducted, affecting some tax credits, clawbacks, and income-tested benefits.
Disability Tax Credit (DTC) Promoters Restrictions Act
This Act will come into force on November 15, 2021. Revised regulations coming soon, may still cap fees at $100 for DTC requests.
2020 Recipients of COVID-19 Relief Benefits - Due Date for Tax Payment
Tax returns must still be filed by April 30th, but some (NOT ALL) taxpayers who received COVID relief benefits will not be required to pay interest on outstanding tax debt for the 2020 tax year until April 30, 2022.
Canada Emergency Business Account (CEBA)
The deadline for applications for a $60,000 CEBA loan or the $20,000 expansion is now June 30, 2021. Apply online with your financial institution.
Life in the Tax Lane April 2021
- CERS/CEWS update
Accommodations and parking are sometimes included as eligible medical expenses, as is cannabis. Check the list of eligible expenses.
If your business is incorporated, you must file a separate corporate income tax return. If not, the business income is included on specific forms in your personal income tax return. A professional accountant can help to ensure that you claim all allowable expenses.
Capital or Expense - Rental Property / Business Assets
Should a cost be capitalized or expensed? There are general guidelines that can be followed to determine the answer. This article also deals with expense and capital items that are used both for business and personal use.
Withdrawals For Home Buyer's Plan (HBP) or Lifelong Learning Plan (LLP)
Withdrawals from your RRSP from Jan 1 to Dec 31, 2020 for the HBP or LLP will be on a 2020 T4RSP, and must be reported on Schedule 7 of your 2020 tax return, even though they don't affect your income.
Repayments to Home Buyer's Plan (HBP) or Lifelong Learning Plan (LLP)
If you made repayments to your RRSP for the HBP or LLP from Mar 3/20 to Mar 1/21, make sure you report them properly on your 2020 tax return in order to not lose RRSP contribution/deduction room.
Do you have a worthless investment? Can't sell shares because they've been delisted? There may be a way to claim the capital loss.
Tax Treatment of Income From Shares in Corporations
Canadian vs foreign investments; What the Income Tax Act says about the exchange rate; Trade date vs settlement date; Superficial losses; Transfer capital losses to a spouse.
A deduction may be available for tools purchased in order to earn employment income as a tradesperson (e.g. hairdresser, cook, plumber, electrician, mechanic, apprentice tradesperson, etc.). Let our calculator help with the calculation.
Quebec 2021 Budget - March 25, 2021
Tax credit for seniors' home support services enhanced; Small business tax rate reduced; non-eligible dividend tax credit rate reduced; many other measures.
Nova Scotia 2021 Budget - March 25, 2021
No tax measures were announced other than the 10-year extension of the Equity Tax Credit for investments in Community Economic Development Investment Funds (CEDIFs).
Ontario 2021 Budget - March 24, 2021
20% increase to 2021 CARE credit; Refundable jobs training tax credit 2021 only; Employee Health Tax (EHT) exemption increase made permanent, threshold amount for instalments doubled; and more.
Should You Borrow to Contribute to RRSPs?
Let our article and our calculator help you with this decision. However, if you have never invested, don't start by borrowing for your RRSP!
The 2021 Budget will be tabled on Monday, April 19, 2021.
This calculator may help you decide between contributing to TFSAs or RRSPs. If you're in the lowest tax bracket (federally up to $49,020 in 2021), use TFSAs first!
Recording Foreign Transactions
If you have purchased an investment in a non-registered account, it is your responsibility to keep records which will allow you to calculate the adjusted cost base (ACB) of that investment, in Canadian dollars, even for investments held in US$. Your brokerage statements will not provide the Cdn$ ACB for investments held in US$.
Refundable Medical Expense Supplement
If you have employment or self-employment income exceeding $3,714 in 2020, have claimed a disability supports deduction or medical expenses and have family net income less than $53,604, you may be able to claim a refundable amount of up to $1,272.
Filing With a Spouse / Marital Status
Joint investment income; tax credits and deductions; how to report your marital status and when to update CRA on a change in your marital status.
New Brunswick 2021 Budget - March 16, 2021
No personal or corporate tax changes were announced. Carbon tax increases to $40 per tonne from $30 effective April 1, 2021.
RRSP Excess Contributions - You Are Responsible
Each taxpayer is responsible for overcontributions to their RRSP - not their accountant or financial planner. Your notice of assessment will show your contribution limit. If this is negative, you likely have an excess contribution which will result in a costly tax.
Prince Edward Island 2021 Budget - March 12, 2021
Tax measures effective Jan 1, 2022: Personal exemption increases to $11,250; Low-income tax reduction threshold increases to $20,000; Small business tax rate reduced to 1%.
T4A Tax Slip Errors re COVID Benefits
If you feel there is an error on your T4A for CERB or other COVID benefits you should contact CRA as soon as possible. Make sure you file your return on time!
Expenses of a 40km+ move to attend post-secondary school may be deducted against taxable scholarship or award income or from employment income earned while at school. The move home might be deductible from employment income earned there, if conditions are met.
Yukon 2021 Budget - March 4, 2021
There were no new tax measures announced in the Yukon 2021 budget.
Canada Emergency Wage Subsidy (CEWS) Mar 14 to Jun 5
The subsidy will continue with the current structure, with maximum 75% subsidy for active employees. Subsidy structure for furloughed employees will also continue unchanged.
Canada Emergency Rent Subsidy (CERS) Mar 14 to Jun 5
The subsidy will continue with the current structure, with maximum 90% subsidy for businesses locked down due to COVID, and maximum 65% for other businesses.
Life in the Tax Lane March 2021
- COVID-19 Benefit Recipients - Interest Relief
Alberta 2021-22 Budget February 25, 2021
There were no personal or corporate tax changes in the Alberta budget. COVID-19 recovery spending continues; tourism levy abatement continues, property tax reductions oil/gas properties.
RRSP Contribution Deadline March 1, 2021
If you received COVID benefits with little or no tax withheld in 2020, you'll probably have tax owing, which could be reduced by an RRSP contribution.
Nunavut 2021-2022 Budget - February 22, 2021
Nunavut tabled their 2021 Budget, with no tax changes announced.
So far, we only know the dates for upcoming 2021 budgets for 3 provinces: Alberta on Feb 25th, Saskatchewan April 6th and BC April 20th.
Prescribed Interest Rate Remains at 1%
The prescribed rate for 2021 Q2 starting April 1st will remain at 1%, for spousal loans as well as for shareholder and employee loans.
New 2020 T4 Codes Required for ALL Employers
All employers are required to provide data for 4 new codes on the 2020 T4, for employment income paid from Mar 15 to Sep 26, 2020. T4 due date this year is Mar 1/21.
BC PST - New Registration Requirements
Effective April 1, 2021 there are new registration requirements for businesses located outside of BC.
Self-employed individuals who received CERB and would have qualified based on gross income will not be required to repay the benefit if they met all other eligibility requirements.
2021 Corporate Income Tax Rates
The small business corporate income tax rate has been reduced for 2021 in Northwest Territories, Prince Edward Island, Quebec, and Yukon.
Northwest Territories 2021 Budget February 4, 2021
The NT budget includes a reduction of the small business corporate tax rate to 2% from 4%, increases to carbon tax, property tax rates and some fees, and increased Cost of Living Offset.
Working From Home - Internet Access Fees
CRA has modified Guide T4044 to add that starting in 2020, reasonable monthly home internet access fees can be an eligible work-space-in-home expense for employees.
Investment Return Calculator - How did your Investments do in 2020?
Calculate your returns for an investment, investment account, or entire portfolio, for any period. New print function added.
CERB Class Action Lawsuit Re Net vs. Gross Income Requirement
A proposed class action lawsuit has been filed in Federal Court against the federal government on behalf of self-employed pensioners, although if it is successful it may affect all self-employed people affected by this issue.
Life in the Tax Lane February has an additional link to information on the new refundable Canada Training Credit, available for 2020 tax returns.
Prepare Ahead For Your Tax Return
See our checklist of items to have on hand prior to preparing your own tax return or taking information to a professional tax preparer.
CPP, OAS and EI Tax Slips Online
This year your CPP OAS and EI tax slips will be available in your My Service Canada Account as early as February 1st.
Donation Tax Credit Rates 2020/2021
The only change to donation tax credit rates for 2020 was the higher BC tax rate of 20.5% for donations over $200 to the extent that income is taxed at this rate. 2021 tax credit rates remain unchanged, but budgets could change that.
Life In the Tax Lane February 2021
- Canada Training Credit
Provincial Budget Consultations
Budget 2021 consultations are underway for a few provinces - earliest closing date is next week.
CRA and Tax Templates Inc. calculators are available up to period 13 ending Mar 13/21. Video Tax News/Punchard Systems CEWS Estimator is also available up to period 13 - easy to use, excellent for planning.
Both NETFILE and EFILE will be available starting Monday, February 22, 2021, for filing 2020 and earlier tax returns. Make sure you have all your tax slips before filing!
Transfer Shares to a Registered Account, But Not at a Loss!
You can make your RRSP contribution with an in kind transfer of shares. However, if you transfer shares on which there is a loss, the loss will not be deductible. If you transfer shares on which there is a gain, you will have a taxable capital gain.
For 2020 and 2021, "earned income" will include COVID relief payments for which you receive a T4A or T4E, as well as EI benefits and QPIP benefits.
Federal 2021 Budget - Pre-Budget Consultations - Have Your Say!
How much can be earned in Canadian dividends (when there is no other income) before regular income taxes are payable, and before alternative minimum tax applies?
Highly Affected Sectors Credit Availability Program (HASCAP)
Business loans @ fixed 4% interest rate with flexible terms of up to 10 years with up to a 1 year postponement on repayments at start of loan, guaranteed by Canada.
Due to the COVID-19 pandemic, there will be no revocations of farm status for the 2021 assessment roll. For future reference: There is no deadline for achieving gross annual value requirements for a developing farm, despite the "projected" date for doing this.
Basic Tax Calculator for 2021 and Earlier Years
Shows taxes payable, average and marginal tax rates for all provinces for employment/other income, capital gains, eligible and non-eligible Canadian dividends. Compare 6 years of taxes payable by province.
Investment Income Tax Calculators - All Provinces
See the big difference in taxes payable on different types of investment income. Print a 1 page summary of results with no ads, in colour.
2020/2021 Canadian Tax and RRSP Savings Calculator
This detailed calculator now includes political contribution tax credits. Check your 2020 tax return, do your 2021 tax planning!
Working From Home Expenses Calculators
Both CRA and Revenue Quebec have calculators to help you determine the best method to use for claiming home office expenses.
Bitcoin and Barter Transactions
These can result in taxable income, and in sales taxes collectible/payable. Gain on Bitcoin is also taxable.
When is CEWS Included in Income?
Both CEWS and the Canada Emergency Rent Subsidy (CERS) are included in taxable income immediately before the end of the qualifying period to which they relate. If not done, tax return amendments will be needed.
Disability Insurance Premiums Paid by a Business
These premiums are not deductible by a sole proprietor. They are deductible by an employer as wages expense, but are included as a taxable benefit to the employee.
CEWS Periods and Application Deadlines
The deadline for periods 1 to 5 (ending Aug 1/20) wage subsidy applications is Jan 31/21. See our article for when CEWS is included in income.
Web Forms will be available for employers to file up to 100 T4 slips starting Jan 11/21. Don't forget about the extra codes for 2020.
RRSP/RRIF Withdrawal Calculator
Use our calculator to determine your 2021 minimum annual withdrawal, and to estimate your earnings and withdrawals for the next 40 years. Works for non-registered also!
Historical Returns on Investments - Stocks, Bonds, T-Bills
2020 was a good year for stocks. See returns for 1/5/10/20/41/50 & 71 years, and the growth of $1,000 invested. Over the past 10 years one would be losing money after inflation by investing in Canadian 3-month T-bills or Canadian government 1-3 year bonds.
Use our calculator to determine your returns for 2020 or any time period for a particular investment or investment account, or your entire portfolio.
Reporting Foreign Income and Expenses on the Tax Return
All income and expenses must be reported on your tax return in Canadian dollars. The average US exchange rate for 2020 is 1.3415, which can be used for dividends, but not for purchases and sales.
See also Prior Years:
Revised: May 01, 2023
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