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What's New by Month

April 2025

Government of Canada Debt

There has been very little discussion in this federal election about the massive Canadian government debt, so we've updated our debt table.

Prince Edward Island 2025 Budget - April 10, 2025

PEI tax changes:

Attendant Care Costs

Claiming attendant care costs can be complicated, as they can be claimed as medical expenses or sometimes as disability supports deductions. The $10,000 limit for attendant care as medical expenses is per paying individual, not per patient, which makes cost sharing among supporting persons advantageous.  There are 2 options when claiming attendant care costs as medical expenses for a person who qualifies for the disability amount.

Report the Sale of Your Principal Residence!

You are required to report the sale of real estate, including your principal residence. The maximum penalty for not filing is $8,000. Did you own your principal residence less than 1 year? Possibly taxable!

Newfoundland and Labrador 2025 Budget - April 9, 2025

There are no new taxes, tax increases, or fee increases. The Seniors' Benefit and its eligibility threshold will be indexed to the CPI. The provincial fuel tax is being reduced by 50%, and the 15% retail sales tax on home insurance is being eliminated.

Phishing Scam Targeting EFILERs

On April 8, 2025, CRA provided a reminder about an email phishing scan targeting the tax preparation community.

Missing Slips in CRA Portal

April 3, 2025 - Update from CRA on the availability of tax slips in Auto-fill my return and CRA portals

Beginning in January 2025, the CRA introduced a new validation process for organizations that submit information returns (like financial institutions and employers) to ensure the accuracy of the data they submit. While this change improves data quality, some issuers have had difficulties uploading tax slips, resulting in certain slips not appearing in My Account, Represent a Client, or the Auto-fill my return service as early as in previous years.

Income Tax Refunds

Refunds can be expected in about 2 weeks for EFiled, NetFiled or TeleFiled returns, about 4 weeks for paper-filed before April 15th, 6 weeks after that. Yes, your tax refund and/or benefits can be withheld, or your wages garnished, if you have an outstanding debt to CRA or a provincial or territorial government.

March 2025

Life in the Tax Lane - April 2025

Alberta Supplemental Tax Credit

The purpose of the credit is to ensure that taxpayers with in excess of $60,000 of non-refundable tax credits do not pay more as a result of the reduction in tax rate for personal tax credits.

Canadian Election Tax Policy Updates

This is a very helpful guide to the tax policies announced by the 2 parties, which will be updated as soon as new announcements are made.

Quebec 2025 Budget - March 25, 2025

Nearly $3 billion in savings over 5 years will be achieved through tax expenditure reforms. These reforms include the January 1, 2026, elimination of the tax shield and political contribution tax credit, an increased luxury vehicle tax threshold, and the removal of EV/plug-in hybrid incentive exemptions.

Make Sure Your Tax Preparer Has All Your Tax Slips!!

Many 2024 tax slips are not yet available in CRA accounts. T3 and T5 slips are likely available online in your investment accounts, and you probably have your T4 and T4A slips. You are responsible for ensuring that all your income is reported!

Direct Deposit Changes For EFILERs and Taxpayers

Starting March 24, 2025, direct deposit registrations and changes will no longer be accepted by EFILE or by phone. My Account is the easiest way to do this, but it can also be done through your financial institution or by mail using the applicable form.

Manitoba 2025 Budget - March 20, 2025

The 2025 personal income tax thresholds and basic personal amount will not be indexed as planned, but will remain at 2024 amounts. The Homeowners Affordability Tax Credit maximum increases to $1,600 in 2026. Payroll thresholds for the Health and Post Secondary Education Tax Levy will be increased for 2026. The Volunteer Firefighter and Search and Rescue amounts are doubled for 2025 from $3,000 to $6,000.

Saskatchewan 2025 Budget - March 19, 2025

The tax measures announced were not new, having been previously detailed in the December 2024 Affordability Act, which included increases to the 2025 Basic Personal/Spousal Amounts and various other tax credits.

RRSP Contributions in 2025 up to March 3rd

Contributions made in 2025 up to March 3rd must be reported on your 2024 tax return, but do not have to be deducted for 2024. They will not be included as an overcontribution for 2024, and can be carried forward to be deducted in 2025.

Moving Expense Deductions & Tax Credits

You may be eligible for a deduction or tax credit!

New Brunswick Budget - March 18, 2025

No personal or corporate income tax changes were announced.

Canada Carbon Rebate (CCR) Final Payment April 2025

Individuals will start receiving their final payment of the CCR in April, as the carbon tax rate (fuel charge) has been reduced to zero effective April 1, 2025.

First FHSA Opened But No Contribution? File Schedule 15!

If you contributed more than $8,000 to your FHSA in 2024 because you opened the account in 2023 but did not contribute, CRA will not allow a deduction of more than $8,000 unless you filed Schedule 15 with your 2023 tax return. To correct this, file an amendment to your 2023 tax return.

GST/HST Input Tax Credits (ITCs) on Purchase of Passenger Vehicles

The ITC calculation depends on the ownership of the vehicle and the percentage the vehicle is used in commercial activities. For self-employed individuals, when the commercial use is greater than 10% and less than 90%, the ITC is based on the CCA claim for the vehicle (which depends on % of commercial use) and the GST/HST rate in effect at the end of each tax year.

2025 Sales Tax Rates

5 provinces have Harmonized Sales Tax (HST). The only 2025 change thus far is a Nova Scotia rate reduction from 15% to 14%, effective April 1, 2025. 4 provinces charge GST plus their retail sales tax. Alberta and the 3 Territories charge only 5% GST.

Pay Your Own Disability Insurance Premiums! Self-Employed - Be Insured!

If you pay your own premiums, any benefits will be tax-free. If premiums are paid by your employer, any benefits will be taxable. If you are self-employed, disability insurance is vital!

Eligible Dependant / Equivalent to Spouse Tax Credit

This tax credit may be available for an individual with a qualifying dependant. An additional amount is available for infirm dependants. A dependent child can live outside Canada. If multiple families in the same dwelling have eligible dependants, only one household member can claim this credit.

Tax Treatment of Investments in Exchange-Traded Funds (ETFs)

Income from foreign ETFs is fully taxable, while Canadian ETFs may have various income types, including eligible dividends. Tax slips (T3 and T5s) are delayed in CRA accounts this year, so check investment accounts for faster access. Ensure that your tax preparer has all your slips!

Yukon 2025 Budget - March 6, 2025

Yukon is introducing a new fertility and surrogacy tax credit beginning in 2025, and is revising its legislation to align with the changes to the federal alternative minimum tax, also effective 2025.

Reporting Canada Carbon Rebate for Small Business (CCR-B) on the Tax Return

CRA has provided information, via CPA Canada, on how to report this taxable rebate on the T2 corporate income tax return.

BC 2025 Budget - March 4, 2025

The budget predicts a tripling of the provincial debt by 2028 from when the NDP were first elected in 2017.  There were no personal income tax changes in the budget. Speculation and vacancy tax rates will increase effective January 1, 2026. Carbon tax increases 31.6% April 1, 2025. 

Free Tax Preparation Service

This free tax preparation service is available to people with a modest income and a simple tax situation.

CEBA Loans - Forgivable Portion Repaid or Not Repaid

If and when the forgivable portion of a CEBA loan is repaid, it is deducted from income in the year it is repaid. If it is not repaid, there is no deduction.

February 2025

Life in the Tax Lane - March 2025

Medical Expense Tax Credit (METC)

Topics: Who can claim?; What can be claimed?; Claims for former spouse; What if both spouse and common-law partner?; 12 month time period for expenses; Claim for deceased; Documentation; Calculation; Other eligible dependants.

Basic Canadian Income Tax Calculator

Updated for AB and NS 2025 Budgets, this super-easy calculator shows taxes payable for every province and territory. Enter eligible & non-eligible dividends, capital gains, and other income, see the marginal tax rates for each. Loved by tax professionals and financial planners for comparing 2 scenarios.

Detailed Canadian Income Tax Calculator

Updated for AB and NS 2025 Budgets, this detailed calculator will check your 2024 tax return and help with your 2025 tax planning!

Alberta 2025 Tax Rate Table

The 2025 marginal tax rates have been revised to reflect the new tax bracket with a tax rate of 8%.

Alberta 2025 Budget - February 27, 2025

The budget introduces a new 2025 tax bracket for up to $60,000 of income at a rate of 8%. A supplemental non-refundable tax credit will be added when certain tax credits exceed $60,000. Education and locomotive fuel taxes will be increased.

Filing Your Personal Tax Return

Whether you are NETFILING your own tax return, having it prepared professionally, or mailing your return, you are responsible for the accuracy of the return. Using Autofill? You must ensure that all slips are reported, even if they haven't been received in your My Account yet.

Property Rental Issues / Expenses

Are you a landlord? Learn about allowable rental expenses, renting below FMV, rental losses, CCA and the principal residence exemption, change in use, capital vs expense and many other topics!

Nunavut 2025 Budget - February 24, 2025

No income tax changes were announced.

Records Retention By a Business or an Individual

Every person and business must keep records and books of account for a minimum of 6 years from the end of the latest year to which they relate. For capital assets or investments, this would be 6 years after the end of the year in which those assets are sold.

Nova Scotia 2025 Table of Marginal Tax Rates

The NS tax rate tables now reflect the 2025 increase in the Basic Personal Amount and elimination of the $3,000 supplement.

CRA Grants 1 Week Reprieve From Penalties for Information Returns Due Feb 28, 2025

Due to ongoing challenges with information return filing, CRA is granting relief from late-filing penalties if information returns such as T4s are filed by March 7, 2025, for those returns normally due on February 28, 2025. Hopefully their software problems will be solved long before then.

First-Time Home Buyers' Tax Credit (HBTC)

A tax credit based on an amount of $10,000 is available to first-time home buyers or for the purchase of a home for those with disabilities. The credit can be split between spouses.

New Brunswick 2025 Pre-Budget Consultations

The NB consultations are open until February 28, 2025.

Nova Scotia 2025 Budget February 18, 2025

The 2025 basic personal and spouse/eligible dependant amounts are increased from $8,744 to $11,744. The 2025 age amount is increased to $5,734. The supplements to these amounts are eliminated. Effective April 1, 2025, the small business tax rate is being reduced to 1.5%, the threshold for the lower rate is being increased to $700,000, and HST will be reduced by 1%.

Northwest Territories 2025 Budget February 6, 2025

No income tax changes were announced.

Multiple Jobs - Why Do I Owe so Much Tax?

You might not have completed your TD1 forms correctly, so the additional employers were not deducting enough tax. Personal tax credit amounts can only be claimed for 1 job if you work multiple jobs at the same time.

Federal 2025 Pre-Budget Consultations

The 2nd set of pre-budget consultations has been launched. Have your say until March 10, 2025. Completing the questionnaire takes only a few minutes.

Problems Filing 2024 T4 Returns

There have been many problems for those trying to submit T4 returns this year, whether using payroll software or CRA's WebForms. We provide an example of how we solved a couple of the problems with WebForms. Hopefully, all the problems will be resolved soon!

CPP Retirement Pension Calculator

This calculator compares the estimated value of your future CPP retirement pension based on 3 different starting dates, using an inflation factor and a rate of return you choose. Read the article before using the calculator!

Canada Child Benefit (CCB) and Disability Benefit Annual Amounts

The CCB starting July 2025 will be a maximum of $7,997 for each child under 6, and $6,748 for each child 6 to 17. The benefit is reduced for 2024 family income over $37,487, and further reduced for 2024 family income over $81,222.

How is Income Tax Calculated in Canada?

Indexation of personal tax thresholds and tax credits helps taxpayers avoid increased tax resulting from inflation, but not all provinces index these amounts. Federal and provincial taxes are calculated separately, but based on the same taxable income, except for Quebec. Tax credits are applied in a specific order, sometimes resulting in some credits being forfeited.

US Estate Tax for Canadians

A US federal estate tax return must be filed if a deceased Canadian resident, who is not an American citizen, owned US-situated assets exceeding $60,000 US in fair market value at the time of death.  For most Canadians, the US tax payable will be zero, but the return still must be filed. Our US Estate Tax Calculator can help you estimate if you will owe any US estate tax.

Should You Contribute to Your TFSA, FHSA or RRSP?

If you're in the lowest tax bracket, use TFSAs first!  If not, read our article and then make use of the TFSA vs RRSP calculator to help you decide. If you're eligible, an FHSA might be the best choice.

TFSA: Name Your Spouse As Successor Holder, Not Beneficiary!

When a spouse is a TFSA beneficiary the TFSA does not automatically become the TFSA of the spouse in a tax-free manner. It can be transferred to their own TFSA within a certain time limit, but any increase in value after death will be 100% taxable. This is not the case if the spouse is named as the successor holder.

Canada Carbon Rebate (CCR-B) for Small Businesses is Taxable

Canada Revenue Agency has confirmed that in the absence of draft or enacted legislation to make the CCR-B tax-free, it is considered taxable when received.

Quebec Refundable Work Premium Tax Credit

People with employment or self-employment income may be eligible for the work premium, with a higher adapted work premium for those with severely limited capacity for employment.

Quebec Indexed Amounts for 2025

Quebec's 2025 tax thresholds, personal tax credit amounts and some deductions were increased by 2.85% for inflation.

January 2025

Investment Income Tax Calculators

For all provinces and territories, these easy calculators show the tax advantage of eligible Canadian dividends over other income. They have been updated to remove the increase in the capital gains inclusion rate.

Detailed Canadian and Quebec Income Tax Calculators

These very detailed calculators have been modified to remove the increase in the capital gains inclusion rate. Check your 2024 tax return, start your 2025 tax planning!

Basic Canadian Tax Calculator

This super-simple calculator for all provinces and territories is very useful for tax practitioners and financial planners. It has been modified to remove the increase in the capital gains inclusion rate.

Capital Gains Inclusion Rate Increase Deferred to 2026

On Jan 31, 2025, the Department of Finance announced that the inclusion rate increase would not happen until January 1, 2026. The announcement indicated that the LCGE increase is still effective June 25, 2024, and that the Canadian Entrepreneur's Incentive will still be introduced for 2025.

Life in the Tax Lane February 2025

Transfer Shares to a Registered Account, But Not at a Loss!

You can make your RRSP, TFSA, or FHSA contribution with an in-kind transfer of shares.  However, if you transfer shares with 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.

Provincial Budget 2025 Consultations in Progress

Manitoba and Quebec budget consultations are underway, with a deadline of February 21, 2025 for Manitoba, but no deadline indicated for Quebec. The deadline for Quebec's consultation last year was February 2, 2024.

Transfers From LIF to RRIF - More Unlocking!

One can "unlock" funds in a LIF each year by transferring the difference between the maximum and minimum withdrawals to a RRIF of the same annuitant, with no tax withheld. Some provinces use the previous year investment returns in the LIF to calculate the maximum withdrawal. If you had significant returns last year you may be able to unlock a significant amount!

Election to Stop Contributing to Canada Pension Plan (CPP)

The process to stop contributions to CPP differs for employees and self-employed individuals. Employees must complete and submit form CPT30. Self-employed make the election on Schedule 8 of their tax return. The election can be made by CPP retirement benefit recipients after age 65, even if the person is still working.

2024 Donation Tax Credit Deadline Extended to February 28, 2025

Donations made up to and including February 28, 2025 by individuals or corporations will be eligible for a 2024 tax credit. Draft legislation has been released by the Department of Finance, and CRA has confirmed it will administer the extension. Donations of shares are not eligible for the extension.

Saskatchewan Affordability Measures

SK recently passed legislation to increase most personal tax credits, and cancel the 2025 and later changes to the non-eligible dividend tax credit.

My Business Account - Is Your Email Address Up To Date?

CRA will transition to online mail, to replace paper mail, in spring of 2025.

BC Home Flipping Tax Now in Effect

Someone who sells a housing unit or a residential property in BC within 2 years of the purchase must file a Home Flipping Tax Return within 90 days of the sale of the property, with some exceptions.

Employee Operating Cost Benefit

For employees using an employer-provided automobile the operating cost benefit will increase to $0.34 per km for 2025, and to $0.31 per km for those employed principally in selling or leasing automobiles.

Passenger Vehicle Expense Limitations

The CCA ceiling for non-ZEVs increases to $38,000 for 2025, with the ceiling for ZEVs unchanged at $61,000. Deductible leasing costs increase to $1,100 per month, with the maximum allowable interest deduction unchanged at $350 per month.

2025 Tax-Free Motor Vehicle Allowances

The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes will increase to $0.72 per km for the first 5,000 km, and to $0.66 per km for each additional km. For the territories, the limits will be $0.76 and $0.70. This does not apply to self-employed persons, who must track all vehicle expenses and keep a trip log.

2025 Provincial/Territorial Budget Consultations

Consultations are in progress for Alberta (Jan 12 deadline), Manitoba (no deadline noted), Newfoundland and Labrador (Jan 6 deadline), and Ontario (Feb 3 deadline). Follow our Provincial/Territorial Budgets page for future updates.

December 2024

Historical Returns on Investments - Stocks, Bonds, T-Bills

2024 was another great year for stocks, with the TSX up 21.7% and the S&P 500 up 36% in Cdn$. See returns for 1 to 75 years. $1,000 Cdn invested in the S&P 500 50 years ago would be worth $503,480 Cdn today.  If invested in Cdn 3-month T-bills it would be worth $13,424.

Year End and Average Annual US Exchange Rates 1997 to 2024

The Canadian dollar fell 7.5% in 2024 compared to the US dollar, which contributes to inflation for almost everything. The Dec 31, 2024 rate was 0.6950, compared to 0.7561 at Dec 31, 2023.

Life in the Tax Lane January 2025

2024 Donation Tax Credit For Donations Until February 28, 2025

Donations made up to February 28, 2025 will be eligible for a 2024 tax credit, according to a December 30, 2024 Department of Finance announcement.

BC Home Flipping Tax Starts January 1, 2025

This tax will imposed on a residential unit, even if it is your principal residence, if it is sold within 2 years, for homes sold on or after January 1, 2025.

RRSP Contributions First 60 Days of 2024

Did you report your 2024 RRSP contributions for Mar 2, 2023 to Feb 29, 2024 on your 2023 tax return? If not, you need to adjust your 2023 tax return.

Maximum LIF Withdrawal Amounts for 2025

2025 percentages are now available on the OSFI website for calculating maximum withdrawals from federally regulated LIFs, RLIFs and variable benefit accounts.

CRA Proceeding With Capital Gains Changes Despite Legislation Not Passed

Although there is still no Bill tabled for the capital gains inclusion rate increase, and there is a possibility that the government will fall, CRA is proceeding with the changes unless the government falls on a non-confidence vote directly related to the capital gains proposals.

RRSP Contribution Deadline for 2024

The deadline for making contributions to your RRSP in order to use the contribution in the 2024 tax year is Monday, March 3, 2025. However, it's best to do your contribution well in advance!

First Home Savings Account Deadline for 2024

The contribution deadline for your FHSA is always December 31st, or the last business day in December, whichever comes first. This year the deadline is Tuesday, December 31, 2024.

BC 2024 Fall Economic & Fiscal Update - December 17, 2024

There were no personal or corporate income tax changes in the Fall Update. By March 31, 2025, BC's debt will have doubled from the debt 7 years earlier, to $130 Billion from $64.9 Billion. This is $90,388 for a 4-person family.

2024 Fall Economic Statement (FES) - December 16, 2024

2024 Deficit $61.9 Billion, Debt $1.2 TRILLION.

Proposals: Exempt the Canada Disability Benefit from tax; Expand eligibility for the Carbon Rebate Rural Supplement; Reclassify Haida Gwaii's zone for the Northern Residents Deduction; Extend the Accelerated Investment Incentive and Immediate Expensing Measures; SRED changes. Other proposed measures are also noted in our article, with direct links to the topics in the Tax Measures Supplementary Information.

2024 Ontario Economic Outlook and Fiscal Review

Bill 216 lowers the Ontario additional tax for minimum tax purposes from 33.67% to 24.63%, starting with the 2024 tax year. This change is included in the Detailed Canadian Income Tax Calculator.

GST/HST 2-month "Vacation" - How to Get a Rebate

Some retailers might find it difficult or impossible to offer the temporary zero GST/HST rate for eligible items at the point of sale because their systems may be too complex to reprogram. If a retailer charges the GST/HST at the time of purchase, you can claim a rebate from the Canada Revenue Agency (CRA) by keeping your detailed receipts and submitting an application.

2025 Non-Refundable Tax Credits

Our table lists most of the personal tax credits for all provinces and territories except Quebec, as well as their 2025 indexation rates.

2024/2025 Investment Income Tax Calculator

This calculator requires very little input, and illustrates the tax efficiency of Canadian dividends versus interest and other income. Most 2025 amounts have been confirmed to CRA factors. PEI 2025 spousal and age amounts have been corrected.

2024/2025 Detailed Canadian Tax Calculator

Most 2025 amounts have been confirmed to CRA factors, with a few $1 rounding revisions. The only more significant change was for PEI, where we missed the spousal and age amount updates.

Quebec 2024/2025 Investment Income Tax Calculator

This calculator has been updated for 2025. Input OAS, QPP, capital gains, Canadian eligible and non-eligible dividends, RRSP/RRIF withdrawals, eligible pension income and other income to get tax results. then shift some income, or change the tax year, to see the difference in tax by moving "other income" to Canadian dividends.

TaxTips.ca December 2024 Newsletter

Catch up on all the updates - lots of information in this month's newsletter!

November 2024

GST/HST "Vacation"

The Federal government proposed a temporary zero-rate for GST/HST for certain items, from Dec 14, 2024 to Feb 15, 2025. This poorly planned move won't offer significant taxpayer savings and requires retailers to adjust point-of-sale systems twice, burdening small retailers who may need to outsource these costly changes.

The Working Canadians Rebate

Another poorly thought-out measure proposes to provide a tax-free $250 rebate to each Canadian who worked in 2023 and earned $150,000 or less individual net income, if they meet certain requirements.

Quebec 2024/2025 Income Tax Calculator

The 2024 Quebec Income Tax Calculator now includes 2025. It's a great planning tool, can help you determine the best RRSP or FHSA contributions, pension splitting amounts, or donations for 2024. Of course, it's never too early to start 2025 tax planning!

Life in the Tax Lane December 2024

Taxpayer Relief Deadline December 31, 2024

Haven't filed your 2014 tax return yet? Taxpayers are running out of time to file requests under the taxpayer relief provisions for the 2014 tax year and any reporting period that ended in the 2014 calendar year. If a tax debt arose from before the 2014 tax year, penalties and interest accumulated from 2014 to 2024 could still be reduced as a result of a 2024 request for leniency.

Converting RRSPs to RRIFs

If you turned 71 this year, your RRSP must be converted to a RRIF, or used to purchase an annuity, by December 31st, 2024. If you turned 65 this year, you may want to convert some of your RRSP to a RRIF before December 31st, to take advantage of the pension income tax credit, and perhaps pension splitting with your spouse.

Tax-Free Savings Account (TFSAs) Withdrawals

There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year. However, a withdrawal in any year increases the TFSA room in the following calendar year. Thus, if you are thinking of making a withdrawal soon, make sure it is done by December 31st, in order to have your TFSA room increased by the withdrawal amount on January 1, 2025.

Last Trading Date for 2024 Gains & Losses to be Recorded in 2024

The last trading date for 2024 for Canadian and US publicly traded stocks that settle 1 day after trading date is Monday, December 30th.  Stocks purchased or sold after this date are settled in 2025, so any capital gains or losses on sale apply to the 2025 tax year.

Alberta 2025 Tax Rate Tables

Our tax rate tables have been revised to reflect Alberta's recent decision to lower the indexation rate for personal tax brackets and credits from 2.9% to 2% for 2025. Bill 32 also caps all future annual increases at 2%.

2024/2025 Detailed Canadian Tax Calculator

The calculator now incorporates Alberta's recent decision to lower the indexation rate for personal tax brackets and credits from 2.9% to 2% for 2025.

2024/2025 Investment Income Tax Calculator

The calculator includes Alberta's indexation revision, requires very little input, and illustrates the tax efficiency of Canadian dividends versus interest and other income.

2025 and Earlier Basic Income Tax Calculator

This super-quick calculator displays taxes payable and marginal tax rates for all provinces and territories in one table. It allows comparison of 2 different scenarios by varying the income, province, or tax year. Input Canadian dividends, capital gains (pre- and post-Jun 25/24), and other income.

Canada Child Benefit (CCB) - Annual Amounts 2016 to Present

The CCB is a tax-free benefit for families with children, providing up to $7,787 annually per child under 6 and $6,570 per child 6 to 17.  Families may receive up to an additional $3,411 for a child with disabilities. These amounts decrease when income exceeds certain thresholds. Payment amounts and thresholds are adjusted for inflation each year, and retroactive benefits can be obtained when a child's Disability Tax Credit is approved.

Filing Tax Returns When You Have A Spouse / Marital Status

Tax returns for spouses are filed separately. However, some tax credits can be claimed by either spouse or shared between them, and some unused credits can be transferred to the other spouse. Much of this process is automated with tax software. Marital status and your spouse's net income are reported on your tax return, and changes in marital status must be reported to CRA.

Capital Gains Inclusion Rate Implementation - Interest Relief

CRA is proceeding with implementing the capital gains inclusion rate increase, based on the Notice of Ways and Means Motion (NWMM) that was tabled in Parliament in September, although it has not yet reached the stage of a bill. They have announced that interest relief will be provided for corporations and trusts that have a filing due date on or before March 3, 2025.

TFSA Excess Contribution Examples - Timing is Important!

You cannot rely on CRA's My Account amount to determine your available TFSA contribution room. The information in My Account will not include any contributions made in the current year. It's your responsibility to track your TFSA contributions during the year, to avoid the tax on excess contributions!

Spousal RRSPs and RRIFs

Spousal RRSPs are a good way for a higher-income spouse to contribute to the RRSP of a lower-income spouse. One must be careful of attribution rules if any spousal contributions were made in the year of a withdrawal or the preceding 2 years.

Prescribed Interest Rate Drops to 4% Jan 1, 2025

The prescribed rate for loans to spouses/children and for employees or shareholders will drop to 4% January 1, 2025 based on the 3-month treasury bills sold at auction in October 2024.

October 2024

2025 CPP Contribution Rates

2025 Maximum Pensionable Earnings (YMPE) increases by 4.1% to $71,300, with the Additional Maximum Pensionable Earnings (YAMPE) increasing by 10.9% to $81,200. Maximum contribution for employee/employer is $4,430.10, and for self-employed is $8,860.20. This is an increase of 9.2%.

2025 QPP Contribution Rates

Quebec YMPE and YAMPE are the same as those for the CPP, but the contribution rate is higher. 2025 QPP maximum contributions for employee/employer will be $4,735.20, and $9,470.40 for self-employed. This is an increase of 8.9%.

Life in the Tax Lane November 2024

Topics in this month's fast-paced 10 minute video for Canadian Tax and Financial Professionals (but useful for everyone!):

Bare Trusts - No T3 Returns For 2024 Tax Year

Canada Revenue Agency has announced that bare trusts will not be required to file the T3 return or Schedule 15 for 2024, unless requested to do so by CRA.

2025 Detailed Canadian Tax & RRSP Savings Calculator

The 2024 calculator now includes 2025, for all provinces and territories except Quebec. It's a great planning tool, can help you determine the best RRSP or FHSA contributions, pension splitting amounts, or donations for 2024. Of course, it's never too early to start 2025 tax planning!

Massive CRA Data Breaches, More Than $6 Million Paid in Bogus Refunds

Apparently, more than $6 million was paid out in bogus refunds by imposters using confidential taxpayer credentials to get unauthorized access into hundreds of Canadians' personal CRA accounts.

Ceasing/Selling Your Short-Term Rental or Airbnb = GST/HST Payable on Property Value!

We first shared about this in July, but wanted to share it again because of its importance!

If a short-term rental property is sold, or changed to long-term rental or personal use (principal residence or cottage), GST/HST may be payable on the property's market value. If it is changed to personal use this is a deemed disposition with income tax consequences.

2020 to 2025 Basic Income Tax Calculator

Super-simple calculator shows taxes payable and marginal tax rates for all types of income for all provinces and territories, for years 2020 to 2025. Easily compare 2 different scenarios by changing the tax year, income amounts or province.

2025 TFSA Contribution Limit

The limit for 2025 will be $7,000. In 2025, the total contribution limit for anyone born in 1991 or earlier who has never contributed will be $102,000.

CRA Proceeding With Implementation of Capital Gains Measures

CPA Canada has shared correspondence from CRA regarding the reporting of capital gains realized on or after June 25, 2024, for T1 (personal), T2 (corporation) and T3 (trust) tax returns.

2025 Tax Rate Tables

Our 2025 tax rate tables show combined federal and provincial/territorial marginal tax rates for capital gains, both types of Canadian dividends, and other income. Federal indexation for 2025 is 2.7% - this has not yet been confirmed to CRA information.

TFSA Successor Holder vs Beneficiary

Your spouse should be named as your TFSA successor holder, not beneficiary, to pass on the TFSA tax-exempt status automatically on death. Secondary beneficiaries can be named for TFSAs, so that if the successor holder or primary beneficiary passes away, the account can be transferred to another beneficiary or beneficiaries, avoiding probate (except in Quebec).

Taxation of Short-Term Rentals is Very Complicated!

This article links to a very helpful video discussing GST and income tax on Airbnbs and other short-term rentals, and to a LinkedIn post that adds some complications to watch out for.

Canada Carbon Rebate For Small Businesses

Eligible CCPCs with fewer than 500 employees in designated provinces should automatically receive their carbon rebate refundable tax credits by the end of 2024. A CCPC with 100 employees in SK from 2019 to 2023 will receive a total of $115,600. For 100 employees in ON, the total would be $40,100, based on CRA's Carbon Rebate Estimator.

Adding Secondary Suites - Mortgage Insurance Rule Changes - Principal Residence Exemption - GST on Market Value

On October 8, 2024, Finance Canada announced changes to make it easier for homeowners to add secondary suites. The suites must be fully self-contained units, so it is quite likely they would not be eligible for the principal residence exemption. If a laneway home is built and then rented long term, GST/HST will be payable on the value of the new home when it is first rented, less credits for tax paid on the construction.

Principal Residence Exemption When Moving Into Residential Care

What happens to the principal residence exemption if a homeowner leaves their home to move to residential care? It depends on the circumstances. It is also important to know about the vacant home tax rules, if you live in the province of BC, the City of Vancouver, or some Ontario municipalities.

September 2024

Life in the Tax Lane October 2024

Topics in this month's fast-paced 10 minute video for Canadian Tax and Financial Professionals (but useful for everyone!):

BC Provincial Debt

Our table of BC Provincial Debt has been updated to March 31, 2024.  The table includes debt-to-GDP ratios and debt per person from 1997 to 2024. The debt per person (for every man, woman and child) grew by 15.9% in 2024, to $19,471.

Share Your Ideas For Service Improvements From Canada Revenue Agency

From September 25 to December 2, 2024, individuals, non-professional representatives, and tax intermediaries have the opportunity to share feedback on their experiences interacting with CRA services through an online questionnaire. The CRA will also hold both in-person and virtual consultation sessions with members of these groups by invitation, allowing for more in-depth discussions.

Uncertainty About Capital Gains Inclusion Rate Change - Will it Happen??

No legislation has been tabled in Parliament for the inclusion rate changes in effect on June 25, 2024. Taxpayers, tax professionals, tax software providers (including TaxTips.ca), executors, financial planners, and even the CRA are in a state of uncertainty. Jay Goodis, CPA, CEO of Tax Templates Inc., has written an insightful article on the issues many are facing because of this.

Interest and Other Investment Expenses

Generally, interest is deductible if the borrowed funds are used to earn income from a business or property. Interest on funds borrowed to purchase shares that pay dividends or MAY pay them is deductible.

Alberta Moving Bonus (Attraction Bonus)

Alberta is offering a $5,000 incentive to 2,000 eligible skilled tradespeople, whether employed or self-employed, who relocate to the province between May 1 and December 31, 2024. Applicants must be at least 18 years old and have lived in Alberta for at least 365 days by the time of application.

2024 Donation Tax Credit Rates

There were no changes to donation tax credit rates for 2024, but with no PEI surtax for 2024, the effective tax rate for donations is reduced for PEI individuals that used to be subject to the surtax.

2024 Canada Workers Benefit (CWB) Refundable Tax Credit Amounts

We've published the 2024 CWB tables, using 2023 factors increased for 2024 indexation. These are the amounts used in the Detailed Calculator. The amounts may change slightly when available from CRA.

2025 Employment Insurance Rates Canada Except Quebec

The maximum premiums employers and employees pay will increase 2.7% in 2025. Maximum insurable earnings is up 3.96% to $65,700. The employee maximum for 2025 is $1,077.48 and the employer maximum is $1,508.47.

2025 Employment Insurance Rates Quebec

The Quebec employee & employer maximums for 2025 are up 3.17%, to $860.67 for employees, and $1,204.94 for employers. Quebec EI rates are lower because they provide their own parental benefits.

Disability Supports Deduction

An individual with an impairment in physical or mental functions may be able to claim this deduction, even if not able to claim the disability tax credit. The need for the supports being claimed must be certified in writing by a medical practitioner.

Donating Shares or Other Capital Property Can Eliminate Capital Gains

Donations of certain types of capital property to qualified donees can eliminate capital gains.  High income individuals may want to seek professional advice regarding the alternative minimum tax changes for 2024.  Best to donate shares by the end of November.

Transferring Capital Losses to a Spouse

Capital losses can be transferred to a spouse using superficial loss rules.  Your spouse must hold the shares for more than 30 days after your disposition for this to work.

TFSA Excess Contributions are Common, and Costly!

YOU are responsible for tracking your TFSA contribution limits, NOT CRA. The taxpayer in the latest court case will be paying the 1% per month tax for approximately 10 years.  The investment decreased in value so much that the excess amount was still significant when a complete withdrawal was eventually done.

August 2024

Life in the Tax Lane September 2024

Topics this month:

Canadian Dividends No Tax

How much can be earned in Canadian dividends in 2024 (when there is no other income) before regular federal or provincial income taxes are payable. Alternative minimum tax (AMT) is not incurred at any level of these dividends in 2024 when there is no other income.

2024 Tax Comparison of Canadian 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 $120K of eligible dividends are BC, NB and SK, with the territories all less than this.

2024 Seniors Tax Comparisons Canadian 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 these analyses, as it was in 2023.

2024 Top Marginal Tax Rates by Province/Territory

There are 2 provinces (AB and SK) with a top marginal tax rate under 50%. NL has the highest rate, followed by NS, then ON and BC. The highest provincial average rate at $100k of other income is 28.21% for NS, and the lowest is 20.98% for BC.

How To Start Investing With A Large Cash Amount

If you have a significant amount of cash and wish to start investing, you should NOT invest it in stocks/ETFs all at once. Depending on the amount, gradual purchases over a number of years would be advisable, with the amount not invested in stocks/ETFs left in bonds or T-Bills until they mature.

Canada Disability Benefit (CDB) Proposed Regulations Consultation

Provide your comments until Sep 23, 2024. Payments will begin in July 2025 based on 2024 tax returns, for eligible individuals age 18 to 64 with a disability tax credit certificate. The proposed maximum payment amount will be $2,400, depending on family income. Up to $10,000 ($14,000 if in a couple) of working income can be earned with no CDB reduction.

Budget 2024 Draft Legislation re Capital Gains Inclusion Rate

Draft legislation has been released for consultation regarding the Capital Gains Inclusion Rate (CGIR), Lifetime Capital Gains Exemption (LCGE), Alternative Minimum Tax (AMT) amendments, bare trust reporting rules, and other measures. Provide your comments re CGIR and LCGE by Sep 3, 2024.

Investing for Financial Independence

Investing is a lifelong pursuit that can help you achieve financial independence. If you're a young adult, start investing as early as possible. This article provides some investment advice for new investors, and a warning to avoid any get-rich-quick schemes.

Tracking Loans To or From Shareholders

Any business owner needs to ensure that all transactions are categorized properly, not just those related to shareholder loans. Transactions between corporations and shareholders can be construed as taxable benefits if not recorded properly. Court cases can be won or lost based on bookkeeping entries!

July 2024

Ceasing Your Short-Term Rental or Airbnb Could be Very Costly!

If a short-term rental property is changed to long-term rental or personal use (principal residence or cottage), GST/HST may be payable on the property's market value at that time. If it is changed to personal use this is a deemed disposition with income tax consequences. If the short-term rental does not comply with licensing, permitting, or registration requirements, the owner will be denied the deduction of any expenses for income tax purposes.

Life in the Tax Lane August 2024

Topics this month:

US Estate Tax May Be Payable By Canadians!

A US federal estate tax return must be filed if a deceased Canadian resident, who is not an American citizen, owned US-situated assets exceeding $60,000 US in fair market value at the time of death.  For most Canadians, the US tax payable will be zero, but the return still must be filed. Our US Estate Tax Calculator can help you determine if you will owe any US estate tax.

2024 Tables of Personal Income Tax Brackets & Marginal Tax Rates in Canada

We've added an extra column to each of our tax rate tables, to show the combined federal & provincial or territorial marginal tax rate for capital gains subject to the 66 2/3% inclusion rate.

Should You Borrow To Invest?

Definitely NOT if you are a novice investor, or if it would mean that you can't sleep at night because of the debt. However, if you are cautious, patient, don't overextend yourself, and invest in good quality stocks and ETFs, borrowing to invest can help you build your wealth. Our Borrow to Invest Calculator might be able to help you decide.

BC Secondary Suite Incentive Program (SSIP)

Eligible homeowners will receive up to 50% of the cost of renovations, up to a maximum of $40,000, to help them create a new secondary suite on their property to be rented out for below market value for at least the first 5 years.

Nova Scotia More Opportunity for Skill Trades and Occupations (MOST) Tax Refund

Eligible employed or self-employed workers can apply for a refund of the provincial income tax on the first $50,000 of income. The application deadline for the refund related to the 2023 tax return must be completed by June 30, 2025.

Capital Gains Reserve Other Properties

The capital gains reserve for other properties allows deferral of capital gains over a period of 5 years when the proceeds are received over at least 5 years. See examples of how the 2024 change in the capital gains inclusion rate may affect the reserve amount you choose.

June 2024

Life in the Tax Lane July 2024

Topics this month:

Free in 30! / Financial Freedom

Achieving financial independence is more difficult now than in 1968 when we got married and bought our first home, but the steps to achieve it haven't changed.

Pre-Budget Consultations for the Federal 2025 Budget

Canadians are invited to share their priorities by submitting a brief of up to 2,000 words by Friday August 2, 2024 at 11:59 pm Eastern Standard Time.

GST Credit Amounts for July 2024 to June 2025

The GST/HST credit starting July 2024 is based on 2023 tax returns. Canadian residents are eligible once they turn 19, so the 2023 tax return should be filed by all 18-year-olds, even if they have no income. Depending on income, a single person could receive up to $519 for the year.

Amendments to Quebec Life Income Funds (LIFs) Regulations

As of January 1, 2025,  the maximum withdrawal for those aged 55+ is eliminated, and changes are made to the upper limits of life income and temporary income for those under age 55. As of 2025, no amount can be directly transferred from a LIF to an RRSP or RRIF.

Canadian Dental Care Plan (CDCP)

The interim dental plan for children under 12 ends on June 30, 2024. The CDCP has been available for seniors age 65+ since Dec 2023. It will be available for children under 18 and adults with a disability tax credit certificate starting June 27, 2024, and for all remaining eligible Canadian residents starting 2025.

Many dentists have not yet signed up for the CDCP. Provincial and territorial dental benefits are also available.

2024 and Earlier Basic Tax Calculator

This simple calculator includes the increased inclusion rate for capital gains after June 24, 2024. Very easy to compare 2 different scenarios. Capital gains entered in the post-June 24, 2024 field use a 50% inclusion rate if the tax year is changed to 2023 or earlier.

2023/2024 Canadian Income Tax & RRSP Savings Calculator

Start your 2024 tax planning & calculate the tax that could be saved by an RRSP or FHSA contribution. This detailed calculator has been modified so that capital gains entered in the post-June 24, 2024 field are treated as 2023 capital gains if the tax year is changed to 2023. It uses the 2024 AMT calculation.

Tax Planning for Individuals - Start Early!

Plan ahead so you can file your tax return next year more easily. If you have a business or are a high-wealth individual you should seek professional tax advice from a CPA tax specialist or a tax lawyer. Tax planning should never be an afterthought.

May 2024

Life in the Tax Lane June 2024

Topics this month:

Shareholder and Employee Loans and Their Tax Implications

The prescribed rate for these loans will be reduced from 6% to 5% effective July 1, 2024. This rate will also apply for loans to a spouse or minor child made after July 1, 2024.

Gifting a Capital Property Can be Very Taxing!

If capital property (e.g. real estate, investments) is given as a gift, the person who has given the gift will be deemed to have sold the capital property at fair market value (FMV), and will have to pay tax on any resulting capital gain.

Detailed Canadian Tax & RRSP Savings Calculator

This calculator now includes the 2024 capital gains inclusion rate change taking effect June 25th, as well as the 2024 changes for alternative minimum tax which took effect January 1, 2024. When legislation is available for the inclusion rate change, the calculator may have to be revised.

Investment Income Tax Calculator

This calculator now includes the 2024 capital gains inclusion rate change taking effect June 25th, as well as the 2024 changes for alternative minimum tax which took effect January 1, 2024. When legislation is available for the inclusion rate change, the calculator may have to be revised.

May 24, 2024 was Last Day for T+2 Settlement Dates

The settlement date for trades of stocks, bonds, mutual funds and ETFs is 1 day after trade date (T+1) for all trades made after May 24, 2024.

Renting Real Estate From a Non-Resident Landlord

A tenant is required to withhold tax on rent paid to a non-resident landlord. The Minister of National Revenue has tweeted that CRA "does not intend to collect any portion of any non-resident landlords' unpaid taxes from individual tenants." However, this is contrary to the Income Tax Act. Hopefully the plan is to change the legislation to remove this requirement for Canadian tenants.

Adjusted Cost Base (ACB), or Cost Basis

Keeping records showing the ACB of investments or property that could result in a capital gain or loss on disposition or deemed disposition is important. This includes non-registered investments, real estate (even personal use), and several other types of assets.  If investments are in a registered account such as a TFSA or RRSP, there is no need to track the ACB.

2024 Provincial/Territorial Political Contribution Tax Credits

The only change thus far for 2024 is for the Ontario thresholds, which are indexed annually.

Tax Implications of Owning a Cottage or Second Home

Topics covered: Personal-use property; Change in use of the cottage; Sale of the cottage/principal residence exemption; Selling/gifting a portion of the cottage re inclusion rate; Tracking the cost of the cottage or your principal residence.

April 2024

Life in the Tax Lane - May 2024

Topics this month:

Rental Property Expenses and Issues

Learn about the denial of expenses for non-compliant short-term rentals, deductible expenses, renting below FMV, rental losses, change in use of your home, capital vs expense, motor vehicle expenses, foreign rental property, and more.

2024 Corporate Income Tax Rates

The increase in the Saskatchewan small business rate from 1% to 2% is delayed until June 30, 2025, resulting in a change to the non-eligible dividend tax credit rate. Newfoundland & Labrador's small business tax rate for 2024 is reduced from 3% to 2.5%.

Attendant Care Costs

Figuring out how to claim attendant care costs can be complicated, as they can be claimed as medical expenses, sometimes as disability supports deductions. The $10,000 limit for attendant care as medical expenses is per paying individual, not per patient, which makes cost sharing among supporting persons advantageous.  There are 2 options when claiming attendant care costs as medical expenses for a person who qualifies for the disability amount.

Voluntary Disclosure Program (VDP)

Taxpayers can voluntarily correct inaccurate, incomplete, or unreported information, and do so without penalties or prosecution, if a valid voluntary disclosure is made to Canada Revenue Agency (CRA).

Report the Sale of Your Principal Residence!

Reporting the sale of your principal residence on the tax return has been required since 2016. The maximum penalty for not filing is $8,000. If you weren't aware of this requirement and missed filing, consider filing now under the Voluntary Disclosure Program.

2024 Federal Budget April - 16, 2024

Obviously, the budget doesn't "balance itself" - there are no balanced budgets projected for the next 5 years. The federal debt is $31,000+ per person in Canada (yes, children included). The capital gains inclusion rate will increase to 2/3 from 1/2 for corporations and trusts, and for individuals with capital gains in excess of $250,000 per year. Volunteer tax credits will double.

RRSP Home Buyers' Plan (HBP)

Ahead of the 2024 Federal Budget, the government announced that the maximum withdrawal from the HBP will be increased from $35,000 to $60,000. Those who have borrowed, or will borrow, for the HBP after January 1, 2022 and before December 31, 2025 will have up to 5 years before starting repayments.

Tuition, Education and Textbook Tax Credits

The tuition tax credit can be transferred to a spouse, parent or grandparent, after the maximum is claimed by the student. Sometimes other tax credits are forfeited due to the order in which the tuition credit must be claimed. Some other tax credits that can't be used can be carried forward.

Death of a TFSA Holder - Plan Ahead

The disposition of the TFSA upon the death of its holder depends on whether the holder designated a successor holder, one or more beneficiaries, or no successor holder or beneficiary. Only a spouse or common-law partner can be named as a successor holder, and they will automatically become the new holder of the TFSA upon the death of the holder.

Manitoba 2024 Budget - April 2, 2024

The Basic Personal Amount (BPA) will be phased out over a net income range of $200,000 to $400,000 starting in 2025; 2025 Renters Tax Credit increases, Fertility Treatment Tax Credit maximum is doubled for 2024; Retail Sales Tax registration threshold increased to $30,000; New Rental Housing Construction Tax Credit for 2024; Gas Tax zero rate extended to Sep 30, 2024; changes to School Tax Rebate and Education Property Tax Credit; Data Processing Investment Tax Credits eliminated for 2025.

March 2024

PEI 2024 Budget - Tax Measures

The 2024 budget increased the 2025 amounts for the basic personal, spousal, eligible dependant, and age amount tax credits. The lowest 2 tax bracket amounts for 2025 are revised slightly, tax rates for lowest 4 brackets are reduced, and for top bracket is increased.

Filing Your Tax Return

Life in the Tax Lane April 2024

Topics this month: Bare Trusts - Penalty Relief | T2200 - Employer Requirement? | Reliance on CRA's My Account | Canada Carbon Rebate | Short-Term Property Rentals - Denial of Expenses | UHT - CRA Commentary on Excluded Owner Proposals.

Bare Trusts Exempt From Trust Filing Requirements for 2023

On the last business day before the filing due date, CRA announced that bare trusts are now exempt from the trust filing requirements for 2023.

Ontario 2024 Budget - March 26, 2024

Projected 2023/2024 deficit has more than doubled, later projected surpluses have become very large deficits. No personal or corporate income tax changes except for simplifying the OCASE tax credit. Temporary gas/fuel tax rate cuts extended to December 31, 2024.

GST Credit - File a Tax Return to Receive it!

The GST credit is a quarterly tax-free payment low/moderate income individuals and couples. It is paid automatically based on the tax return filed for the previous year. For this reason, a tax return should be filed even if there is no tax payable. A child should file a tax return in the year they turn 18, so that the GST credit will be paid automatically starting the first payment date after their 19th birthday.

Newfoundland & Labrador 2024 Budget - March 21, 2024

No personal income tax changes were announced, but the small business corporate income tax rate is reduced from 3% to 2.5% effective January 1, 2024. There is no mention of whether the non-eligible dividend tax credit will be reduced as a result of this change.

Saskatchewan 2024 Budget - March 20, 2024

The small business corporate income tax rate of 1% will not increase to 2% until June 30, 2025, an extension of 1 year. Non-eligible dividend tax credit rates are revised for 2024 and later years. Three new business incentives were introduced, and changes were made to expand four others. Increased penalties for non-compliance with tax programs will take effect October 1, 2024.

Pension Income Splitting

Certain types of pension income can be split with a spouse, including pension income eligible for the pension tax credit, in order to save tax by transferring amounts to a lower income spouse. The election to do this can be amended within a certain time period. Quebec pension splitting is only available for taxpayers age 65+.

New Brunswick 2024 Budget - March 19, 2024

No personal or corporate income tax changes were announced; 2024 Low-income seniors' benefit will be permanently increased to $600 per year, and indexed for inflation starting in 2025; New non-refundable tax credits for volunteer firefighters and search and rescue workers; NB will enter into a vaping product taxation agreement with the federal government.

Tax Treatment of Income From Investments in Exchange-Traded Funds (ETFs)

ETFs are a good way to diversify your investments among many different countries and industries. The management expense ratio (MER) for ETFs is usually much lower than that of mutual funds. Income from Canadian ETFs can consist of eligible dividends, capital gains, return of capital (ROC), reinvested capital gains, and other income.

Child Care Costs Deduction

There are limits on the amount of costs that can be deducted for child care, and the deduction must usually be made by the lower income spouse. The higher income spouse can only claim the deduction in certain circumstances.

Quebec 2024 Budget - March 12, 2024

Announced: elimination of retirement pension reduction for seniors with disabilities, effective 2025; Review of tax/budgetary expenditures; Cigarette price increases; Optimizing tax assistance measures for businesses; Enhancing tax credit for film/tv production; Abolishing tax credit for businesses re experienced workers.

Moving Expenses Deduction

If you moved at least 40km to be closer to a current or new job, to run a business, or to attend a post-secondary educational institute full time, then you may deduct the cost of moving expenses paid, up to the amount you earn at the new location, or up to the amount of award or scholarship income received in the year.

2023 Penalty Relief For Late T3 Returns For Bare Trusts

For bare trusts, not other trusts, CRA has clarified that there will be no penalty for 2023 late filing for reasons other than gross negligence. This is because this is the first year that bare trusts are required to file the T3 return.

Employment Expenses

Expenses that are paid to earn employment income are sometimes deductible, including any GST/HST that was paid on them.  This can only be done if your employer requires you to pay the expenses, and either you didn't receive reimbursement for the expenses, or the amount you did receive is included in your income.

Upcoming 2024 Provincial Budgets

Yukon 2024 Budget - March 7, 2024

No income tax changes were announced in the budget. The Fiscal and Economic Outlook is forecasting surpluses for each year, up to the 2028-29 fiscal year.

2024 Federal Budget

The 2024 Federal Budget is to be tabled on Tuesday, April 16, 2024.

First-Time Home Buyer Incentive (FTHBI) - Discontinued

The deadline for new or updated submissions is midnight ET on March 21, 2024

February 2024

Prince Edward Island 2024 Budget - February 29, 2024

For 2025: basic personal amount increases to $14,250, tax bracket thresholds raised and tax rates lowered for first 4 tax brackets, new monthly Children's Benefit. Tax rebates builders of newly constructed multi-unit residential buildings.

Tax Treatment of Income From Investments in Mutual Funds

Mutual fund distributions can be made up of eligible dividends, capital gains, reinvested distributions, return of capital, other income, foreign income, foreign tax withheld, and management fee rebates.  These affect your income tax differently, and may affect your adjusted cost base (ACB).

CRA Dedicated Telephone Service (DTS) for Income Tax Service Providers

The DTS provides free technical help from experienced CRA officers for small and medium income tax service providers.

Underused Housing Tax Return 2023

Specified Canadian corporations, trusts and partnerships ARE NO LONGER required to file the UHT return for 2023 (still due for 2022), as CRA has modified the definition of excluded owner in the UHT-2900 form.

Alberta 2024 Budget - February 29, 2024

Surplus budgets in the forecast. A new tax bracket for income up to $60,000 will be introduced for 2026, with a 9% tax rate, with the rate being reduced to 8% in 2027. New Attraction Bonus of $5K refundable tax credit to entice workers in eligible occupations to Alberta.

Nova Scotia 2024 Budget - February 29, 2024

Deficit of $0.5B forecast. For 2025, NS will begin indexing personal income tax brackets, the basic personal amount, and certain non-refundable tax credits to the NS inflation rate.

March 2024 Life in the Tax Lane

Topics this month:

BC 2024 Budget - February 22, 2024

No balanced budget in the forecast. New home flipping tax, even on principal residence, if sold within 2 years; Exemption thresholds increased for Employer Health Tax, First Time Home Buyers' Exemption, Newly Built Home Exemption; New Purpose-Built Rental Exemption; increases to BC Family Benefit and Climate Action Tax Credit.

How To File Your Personal Tax Return

You can prepare your own tax return using tax software, and either NETFILE the return, or print and mail it. If your return is complicated, consider using a tax professional, but don't leave this too late!

Disability Tax Credit (DTC) - Non-Refundable

The federal DTC is $9,428 for 2023. Doctors or nurse practitioners can complete the application online. The credit can be transferred to a supporting taxpayer. Retroactive claims can be made back to when the disability began.

Auto-Fill of Tax Return - Must Be Checked!

Each year there are many reports of tax slips missing from auto-fill. This must be checked by the taxpayer, or costly interest and penalties can result if income is not reported. T5008 investment transactions are always incorrect.

Maybe You're Not A BC Resident, Even If You Are!

You won't be eligible for the exemption for principal residence re the BC Speculation and Vacancy Tax if you are not a Canadian citizen or permanent resident, even if your BC home is where you always live.

Canada Carbon Rebate (CCR) / Climate Action Incentive Payments 2024-25

The amounts of the quarterly non-taxable payments starting April 15, 2024 have been announced. Taxpayers must file their returns by March 15, 2024 to receive the April 15th payment.

Determining Province of Employment (POE) for Employees

Effective January 1, 2024, CRA's policy has changed regarding the POE for employees who are working remotely. The POE will depend upon whether the employee can be reasonably considered "attached to an establishment of the employer". This will change the tax deductions for some employees who are working remotely.

Underused Housing Tax (UHT) - So Far, Still Affects Canadians!

As of February 14, 2024, there is no Bill tabled in the House of Parliament to enact the proposed changes that would mean specified Canadian corporations, partnerships and trusts do not have to file the UHT return for 2023. Thus, it is uncertain if these "affected owners" will or will not have to file for 2023.

Provincial / Territorial 2024-2025 Budgets

Budget dates known so far: BC February 22nd, Alberta February 28th or 29th, Saskatchewan March 20th. Consultations are still open for Manitoba and New Brunswick. Many thanks to those who help to keep us up to date on this!

A Basic Guide on Bare Trusts for Canadian Taxpayers

MANY MANY Canadians aren't aware that they are in a bare trust situation related to an asset they hold - which could be real estate, bank or investment accounts, or some other assets. Tax Lawyer Anna Malazhavaya of Advotax Law has created A Basic Guide on Bare Trusts for Canadian Taxpayers which helps to explain how to determine if a bare trust exists.

2023/2024 Canadian Tax and RRSP Savings Calculator

This detailed calculator now includes the non-business foreign tax credit, adoption tax credit, BC renter's tax credit and NS children's sports and arts refundable tax credit, as well as all the other most common tax credits already included. Check your 2023 tax return, do your 2024 tax planning!

Selling Capital Property Non-Arm's Length Could Result in Double Taxation

If capital property is sold non-arm's length for proceeds less than FMV, the selling taxpayer will have deemed proceeds of FMV while the acquiring taxpayer may have to use the lower actual proceeds as their cost.

Employee Work Space In Home Expenses

For 2023, the detailed method must be used for calculating home office expenses - the temporary flat rate method no longer applies. Having a formal telework arrangement with their employer will mean the employee is considered to have been required to work from home. Form T2200 has been updated for 2023.

TaxTips February 2024 Newsletter

T3 trust returns - new reporting requirements - This may affect you, and you may not even be aware that a trust exists in your situation!! Short-Term Rentals Crackdown; Calculators; RESP EAPs - timing; RRSPs; Vacant home taxes; Deadlines; and much more!

January 2024

Life in the Tax Lane February 2024

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Toronto Proposed Non-Resident Speculation Tax (Foreign Buyers Tax)

Toronto is proposing a tax of 10% on residential property purchases by foreign buyers, starting January 1, 2025, to help address their financial crisis.

Educational Assistance Payments (EAPs) From RESPs

It may be advantageous for a student to receive taxable EAPs while they have sufficient tax credits (personal & tuition) to offset the income.

BC Speculation and Vacancy Tax Declarations Due March 31, 2024

This tax was expanded to many more communities for 2023, to be reported in 2024. Letters have started going out. File online as soon as you get your letter, to avoid missing the deadline and paying penalties! An interactive location map shows affected areas, and can be searched by address.

Quebec One-Time Refundable Cost of Living Tax Credit

Quebecers who have not yet filed their 2021 tax returns should do so, to receive a one-time tax-free payment of up to $600. The deadline for filing the 2021 return to receive this payment has been extended to June 30, 2024.

Probate Fees by Province/Territory

All probate fee amounts are now current to January 22, 2024. The only 2024 change is Quebec, which indexes their amounts every year.

Quebec Removal of LIF Maximum Withdrawals - Consultation

Draft regulations have been published for consultation regarding the removal of the maximum amount for LIF withdrawals for those age 55+, as of July 1, 2024, as well as new calculation rules of temporary and life income related to LIFs for persons under age 55, as of January 1, 2025. Comments must be submitted before February 10, 2024.

2023 RRSP Contribution Deadline Feb 29, 2024

The contribution deadline for 2023 is Thursday, February 29, 2024. Contributions made after Dec 31/23 can be used as a 2023 or 2024 contribution, and will not be included as an overcontribution for 2023.  Make sure you'll have enough 2024 contribution room before doing a 2024 contribution!

Trade Date vs Settlement Date - Settlement Date Changing

The settlement date, which is the date on which the purchaser of an investment takes ownership, will be changing in May 2024, from T+2 to T+1 (1 day after trade date).

Ontario Municipal Vacant Home Taxes

Due dates for declarations are Feb 29/24 for Toronto (tax increased from 1% to 3%), and Mar 21/24 for Ottawa. Hamilton and Peel Vacant Home Taxes did not proceed.

City of Vancouver Empty Homes Tax Declarations Due Feb 2, 2024

Owners of residential properties in Vancouver must submit a declaration to determine if the Empty Homes Tax is payable, 3% of the 2023 assessed value.

Historical Returns on Investments - Stocks, Bonds, T-Bills

We've updated the returns for the Consumer Price Index. We previously used the November CPI of 158.8. As usually happens, the CPI dropped in December, to 158.3. This makes little difference to the previously reported results.

Quebec Pre-Budget Consultations 2024-2025

Provide your input up to February 2, 2024. Complete the questionnaire, or send your thoughts by email.

BC Home Owner Grant

The 2024 threshold for the BC home owner grant is $2,150,000. Grant amounts have not changed. If there are multiple residences on 1 property, the assessed value may be able to be "partitioned" if it exceeds the threshold.

Investment Return Calculator

Use our calculator to determine your returns for 2023 or any time period for a particular investment, investment account, or your entire investment portfolio.

Deadline to Appeal BC Property Assessments

If you disagree with your assessment, either the value of your property or the classification (has your farm status been revoked?), you have until January 31st to file an appeal (complaint).

Transfer Shares to a Registered Account, But Not at a Loss!

You can make your RRSP, TFSA, or FHSA 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.

Record Your Year End Odometer Reading!

If you haven't been keeping a trip log for the business use of your vehicle, start now! This is essential for business owners as well as for employees driving a company vehicle.

Personal Tax Return Due Date

The due date for 2023 tax returns and payments is Tuesday, April 30, 2024. Self-employed have until Monday, June 17, 2024 (since June 15th is a Saturday to file their 2023 tax returns, but any amounts owing must still be paid by April 30th.

December 2023

Reporting Foreign Transactions on Your Tax Return

All amounts are reported in Canadian$; Converting foreign amounts; T5008 not accurate for foreign ACB, may not include deemed dispositions; 2023 average exchange rate; When to use the average rate.

Historical Returns on Investments - Stocks, Bonds, T-Bills

2023 was a great year for stocks. See returns for 1, 5, 10, 20, and 50 years. $1,000 Cdn invested in the S&P 500 50 years ago would be worth $266,182 Cdn today.  Invested in Cdn 3-month T-bills it would be worth $13,868.

Life in the Tax Lane January 2024

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Are Your Tax Credits Changing for 2024?

Turning 65 in 2024? Other tax credits changing? Complete 2024 TD1 forms to give to your employer.  Your TD1 forms determine your tax withholdings. Working part time = maybe no tax withholdings.

2024 Automobile Operating Cost Benefit

The taxable operating cost benefit for an employer-owned vehicle used by an employee is unchanged from $0.33 per km, based on kms of personal use by the employee.  The rate for automobile sales people is unchanged from $0.30 per km.

2024 Passenger Vehicle Expense Limitations

The ceilings for capital cost allowances are being increased to $37,000 for Class 10.1 and will remain unchanged at $61,000 for Class 54. Deductible leasing costs are increased to $1,050 per month for new leases in 2024. The maximum interest deduction for new automobile loans is increased to $350 per month.

2024 Tax-Free Motor Vehicle Allowances

The per km rates that can be paid tax-free to employees and deducted by employers are increased by $0.02 for 2024 to $0.70 per km for first 5,000 km and then $0.64 per km, $0.74 and $0.68 for employees in the Territories.

Canada Caregiver Amount Tax Credits

If you support an infirm spouse, eligible dependant or other dependant, you may be able to claim a non-refundable tax credit, even if they are not eligible for the disability tax credit. To claim the Line 30450 credit, the dependant does not have to be financially dependent on you.

Interest and Other Investment Expenses

Topics: Deductible interest and investment expenses; joint lines of credit / joint investment accounts; Investments no income; Interest paid to non-resident; Paper trail; Disappearing source; Non-deductible investment expenses - so much to know!

Federal 2024 Budget - Pre-Budget Consultations

2024 Budget consultations opened today. Share your ideas and priorities until February 9, 2024. Have your say!

2024 Maximum Lifetime Capital Gains Exemption (LCGE)

The 2024 LCGE maximum is $1,016,836 for qualified small business corporation shares, farming or fishing property. Planning ahead is required to be able to claim this exemption.

Informal Trust Accounts and New Reporting Requirements

Did you set up an in-trust account for your minor child or grandchild? If so, you will likely have to apply for a Trust account number and file a T3 trust return for 2023, by April 2, 2024. This also applies to other trusts that previously did not have to file T3 returns.

November 2023

Life in the Tax Lane December 2023

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Taxpayer Relief Deadline December 31, 2023

Time's running out to file requests under the taxpayer relief provisions for the 2013 tax year and any reporting period that ended in the 2013 calendar year. If a tax debt arose from an earlier tax year, penalties/interest accumulated from 2013 to 2023 could still be reduced as a result of a 2023 request for leniency.

Converting RRSPs to RRIFs

If you turned 71 in 2023, your RRSP must be converted to a RRIF, or used to purchase an annuity, by Sunday, Dec 31, 2023. If you turned 65, you may want to convert some of your RRSP to a RRIF to take advantage of the pension income tax credit, and perhaps pension splitting with your spouse.

Tax-Free Savings Account (TFSA) Withdrawals

A TFSA withdrawal in any year increases the TFSA room in the following calendar year. If you are thinking of making a withdrawal soon, make it before Sunday, Dec 31st so that your TFSA room will increase by the 2023 withdrawal amount on Jan 1, 2024.

Quebec Refundable Work Premium Tax Credit

Persons with employment or self-employment income may be eligible for a refundable credit. The 2023 amounts vary from $1,095.27 for a single person to $3,684.50 for a couple with children, with 2024 amounts increasing by approximately 5%.

Prince Edward Island 2024 Budget Consulation

Complete a survey, email your submission, or attend virtual Zoom event on December 4th. The deadline for the survey and for submissions is December 22, 2023.

Newfoundland and Labrador 2024 Budget Consultation

Residents are invited to take part in a pre-budget questionnaire. Written comments can also be submitted. The deadline to provide feedback is December 15, 2023.

Ontario 2024 Budget Consultation

Take the survey, send a written submission, or attend an in-person consultation in your area.  Deadline for submissions is January 31, 2024.

Alberta 2024 Budget Consultation

Take the survey, send a written submission, or attend a telephone town hall December 11 or 12. Deadline for submissions is January 19, 2024.

Last Trading Date for 2023 Gains & Losses to be Recorded in 2023

The last trading date for 2023 for Canadian and US publicly traded stocks that settle 2 days after trading date is Wednesday, December 27th.  Stocks purchased or sold after this date are settled in 2024, so any capital gains or losses on sale apply to the 2024 tax year.

Expansion of BC Speculation and Vacancy Tax to 13 More BC Communities

6 municipalities were previously added for the 2023 tax year (reporting in 2024), and 13 more will be added for the 2024 tax year (reporting in 2025).

2023/2024 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.

Crackdown on Short-Term Rentals

It is proposed that, effective Jan 1, 2024, no expense deductions will be allowed for short-term rentals in areas that have prohibited short-term rentals, or when the rental operators are not compliant with applicable provincial or municipal licensing, permitting or registration requirements.

Underused Housing Tax Changes Proposed - Fall Economic Statement

For the 2023 calendar year, specified Canadian corporations, partnerships and trusts will be considered excluded owners, not required to file the UHT return. It must still be filed by them for the 2022 calendar year. Minimum penalties for all calendar years are reduced to $1,000 per individual per failure and $2,000 per non-individual.

2024 Detailed Tax and RRSP Savings Calculators

The 2023/2024 calculators are now available, for all provinces and territories, with a separate Quebec calculator. Great planning tool, and it's never too early for tax planning!

Attention Employers - Additional T4 and T4A Slip Reporting

For 2023 and subsequent years, there are new Boxes on T4 and T4A slips to indicate whether the employee or pensioner has dental insurance coverage available to them by the employer/payer.

Medical Expense Tax Credit (METC)

Topics: What expenses can be claimed? Who can claim them? 12-month time period; Claims for deceased persons; Other eligible dependents; METC calculation; Documentation required, and more!

Late Tax Returns and Tax Payments - Penalties and 10% Interest

The interest rate for late instalment payments and tax balance due payments is going up to 10% on January 1, 2024. Best to always make payments on time!

2024 Basic Tax Calculator

Great for tax pros and financial planners! Quick and easy! Lots of different comparisons can be done, see taxes and marginal tax rates for all types of income, for all provinces and territories, for 2019 to 2024.

Quebec Tax Amounts Subject to Indexation

Our table of tax credits and deductions has been updated for 2024 amounts, which have been confirmed to Revenu Quebec amounts.

2024 Non-Refundable Tax Credits Except Quebec

We've published the tables of non-refundable tax credits for 2024 for Canada and all provinces and territories except Quebec. These amounts have not yet been confirmed to CRA or provincial/territorial amounts.

Prescribed Factors For RRIF Minimum Annual Withdrawals

Either the annuitant's age or the age of a spouse can be used to calculate RRIF minimum annual withdrawals, if an election is made prior to the first RRIF withdrawal. Before age 71, a factor of 1/(90 - age) is used to calculate the factor for minimum withdrawals. The factors for age 71+ are prescribed, set out in the Income Tax Regulations. Use our RRSP/RRIF Withdrawal Calculator to determine your minimum withdrawals and get an estimate of how long your funds will last.

2024 CPP and QPP Maximum Pensionable Earnings

The year's maximum pensionable earnings (YMPE) increases to $68,500 for 2024, and the year's additional maximum pensionable earnings (YAMPE) is introduced. It is 107% x YMPE, or $73,200. The maximum contribution for those earning up to $68,500 is $3,867.50 (QC $4,384), and those earning up to $73,200 will pay a maximum of $4,055.50 (QC $4,572). The 2023 maximum was $3,754.45 (QC $4,038.40).

Climate Action Supplement for Rural Areas to Increase

The 10% supplement for residents of small and rural communities will be increasing to 20% starting April 2024.

October 2023

Underused Housing Tax (UHT) Return Deadline Extended Again

On October 31, 2023, the government announced that owners affected by the UHT would have until April 30, 2024 to file their 2022 UHT returns. It appears they finally realized that millions of Canadians are unaware of their filing requirement.

Immediate Expensing for CCPCs

Time is running out for CCPC immediate expensing - the eligible property must be acquired and available for use before 2024.

2024 Old Age Security (OAS) Clawback

The 2024 threshold for the OAS clawback will be $90,997. When 2024 tax returns are filed, if net income before adjustments exceeds this amount, you will have to repay 15% of the excess, to a maximum of the total amount of OAS received in 2024.

Life in the Tax Lane November 2023

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

2024 Tax Rate Tables

Our 2024 tax rate tables show combined federal and provincial/territorial marginal tax rates for capital gains, both types of Canadian dividends, and other income.  Federal indexation for 2024 is 4.7%.

2024 Tax Free Savings Account Contribution Limit

The 2024 limit for contributions to a TFSA will be $7,000. Any person who was born in 1991 or earlier and has never contributed to a TFSA will have $95,000 contribution room in 2024.

BC Fair PharmaCare

The BC PharmaCare program depends on income, and covers prescriptions (many contraceptives are free), medical devices and supplies (diabetes, prostheses). If your expected income for the year is at least 10% less than income from 2 years ago, PharmaCare deductibles may be reduced.

September 2023

Underused Housing Tax (UHT) - Canadian Joint Owners

UHT return may be required if:

$5,000 penalty per individual per property for not filing by October 31, 2023.

Life in the Tax Lane October 2023

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Donating Shares or Other Capital Property Can Eliminate Capital Gains

Capital gains can be eliminated by donating certain types of capital property to qualified donees. Some high-income individuals may want to donate more in 2023 re the alternative minimum tax changes for 2024. Best to donate by the end of November!

Capital Gains and Losses

Learn about capital gains and losses; personal-use property (cottages, cars, etc); listed personal property; business investment losses; transfers to spouse; joint ownership; CCPC/capital dividends; and 1994 Capital Gains Election.

Caveats Re CEBA Loan Deadline Extension to January 18, 2024

5% interest applies as of Jan 19/24, which must be paid by Mar 28/24 (if refinancing obtained) in order to get forgiveness. If both $40,000 and $20,000 loans were obtained, both must be repaid or no forgiveness is allowed.

GST Rental Rebate Increased

Legislation has been tabled to temporarily increase the GST rental rebate for residential housing from 36% to 100%, for projects started after September 13, 2023. Not all projects eligible for the current rental rebate will qualify.

Underused Housing Tax (UHT) Return Due by October 31st!

Canadians who operate a farm or business partnership on residential property, hold property as a trustee, or own shares in a private corporation owning residential property, most likely have to file an underused housing tax return, as do non-residents owning residential property in Canada.

Joint Ownership, Legal vs Beneficial Ownership

If a person on title to a residential property is not one of the "real" (beneficial) owners, there can be many issues, including the need to file an Underused Housing Tax (UHT) return every year. There can also be income tax issues, so professional advice on this is strongly advised!!

Disability Tax Credit (DTC) - Non-refundable

Many medical practitioners can certify eligibility for the DTC, and this can be done via an online form. Some disabilities are not visible, and some people may not even realize they qualify. Help is available to find a qualified practitioner to review your records and certify your application.

2024 Employment Insurance Rates Canada Except Quebec

The maximum premiums payable by employers and employees will increase 4.66% in 2024. Maximum insurable earnings is up 2.76% to $63,200. The employee maximum for 2024 is $1,049.12 and the employer maximum is $1,468.77.

2024 Employment Insurance Rates Quebec

The Quebec employee maximum for 2024 is $834.24, and the employer maximum is $1,167.94. Quebec EI rates are lower because they provide their own parental benefits.

CEBA Loan Repayment Deadline Extended Again

The deadline for repayment of CEBA loans, in order to qualify for partial forgiveness, has been extended by 18 days, to January 18, 2024. The deadline is extended to March 28, 2024 if a refinancing application is submitted prior to January 18, 2024.

August 2023

Farmers and the Underused Housing Tax Return

Most farms across Canada must file a UHT return, because most are either partnerships or corporations, and they usually own land which includes housing units. National farm organizations are requesting an exemption to filing the UHT return due to unintended consequences.

Life in the Tax Lane September 2023

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Guaranteed Income Supplement (GIS)

Low-income seniors who receive the Old Age Security (OAS) pension may be eligible to receive the tax-free GIS.

When Are Gifts or Inheritances Taxable?

Although there is no gift tax in Canada, gifting or receiving some items may have tax consequences, including gifts to employees, or gifts from a tax debtor.

Filing T4 Slips - Electronic Filing Required for 6 or More Slips

Beginning January 1, 2024, penalties will be applied to businesses that paper-file more than 5 information returns (slips + summaries). This also applies to T3, T4A and T5 slips.

Federal Government Consultation on Budget 2023 Proposed Measures

Canadians are invited to provide feedback on draft legislative proposals (clean energy tax credits, AMT, GAAR, share buybacks, digital services tax, global minimum tax, etc), by Sep 8, 2023. They continue to invite feedback re the Substantive CCPC proposal announced in Budget 2022.

Joint Ownership, Estate Planning, Probate

Joint ownership of assets can avoid probate fees, but can also result in costly court cases when intentions are not properly documented. A recent case involves bank and investment accounts held jointly with a common-law spouse.

July 2023

Life in the Tax Lane August 2023

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Canada Workers Benefit (CWB) Automatic Advance Payments

The first automatic advance payments went out on Jul 28/23, equal to 1/6th of the CWB entitlement calculated on the 2022 tax return. Any excess over actual 2023 entitlement will not have to be repaid when the 2023 tax return is filed.

Personal Services Business (PSB)

An incorporated contractor who is considered an "incorporated employee" is a PSB, and is subject to higher corporate income tax rates and limited expense deductions.

First Home Savings Accounts (FHSAs)

Contributions of up to $8,000 per year provide a tax deduction. Withdrawals to buy a home are not taxed, nor are income or gains earned within the FHSA! This is not necessarily only for "first homes". Funds gifted can be used as FHSA contributions,  without attribution to the person doing the gifting. Some might want to delay opening an account due to the requirement to liquidate the account within 15 years.

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.

BC Speculation and Vacancy Tax

Form FIN 563, Request to Waive Penalties, can be used to request waiving speculation and vacancy tax penalties and interest if you were not able to make a payment due to a circumstance beyond your control.

2023 Quebec Tax and RRSP Savings Calculator

The 2022/2023 calculator now includes calculation of the QC refundable tax credit for childcare expenses, which can result in significant tax refunds or reductions.

BC Provincial Sales Tax on Cloud Services

Subsequent to a court decision, the government intends to introduce retroactive legislation next year in order to collect PST on remote access to software, cloud computing services, online support services and other associated services.

Taxation of Low-Interest Government Loans and SR&ED Tax Credits

As confirmed in a May 2023 Supreme Court judgment, some low-interest government loans are considered government assistance, effectively reducing SR&ED qualified expenditure amounts.

City of Vancouver Empty Homes Tax Late Declarations

Late declarations for the 2022 tax year are due July 3, 2024.  Late declarations for the 2021 tax year can be made until December 31, 2026, by submitting a Notice of Complaint.

June 2023

Life in the Tax Lane July 2023

Valuable info re CPP Benefits Late Applications; First Home Savings Accounts; CRB eligibility re Airbnb Income; Multigenerational Home Reno Tax Credit; Residential property developers & GST/HST; and Intergenerational Business Transfer Proposals.

Topics and Resources for Persons with Disabilities

Learn about provincial & federal disability benefits and supports, refundable and non-refundable tax credits, deductions from income, and why a tax return should be filed.

2023 Tax Comparison of Canadian 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 $70K of eligible dividends are again AB and BC.

2023 Seniors Tax Comparisons Canadian 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 these analyses.

2023 Top Marginal Tax Rates by Province/Territory

There are 2 provinces (AB and SK) with a top marginal tax rate under 50%. NL has the highest rate, followed by NS, then ON and BC. The highest provincial average rate at $100k of other income is 28.46% for NS, and the lowest is 21.45% for BC.

Canadian Dividends No Tax

How much can be earned in Canadian dividends in 2023 (when there is no other income) before regular income taxes are payable, and before alternative minimum tax applies?

Rebates For Fuel-Efficient Vehicles and EV Chargers

Know what's available if you plan to buy an EV. The BC Hydro charger rebates for homes and condos is ending June 15, 2023.

2023 Tax Comparisons Employment Income

BC, ON, and AB are again the lowest tax provinces for a single person earning $80,000. AB, SK and BC are the lowest for a couple with 1 income and 2 children. We compare 4 different income levels.

Disability Tax Credit (DTC)

Do you qualify? All type 1 diabetics now qualify automatically. A digital application form is now available. Qualified but haven't claimed? You can claim retroactively for up to 10 years.

Capital vs Expense

Whether you're a landlord or a business owner, there can be a lot of uncertainty when it comes to deciding what is capital and what is expense.  CRA has general guidelines, but the courts often decide that costs are repair expenditures instead of capital, contrary to those guidelines.

May 2023

Life in the Tax Lane June 2023

Topics in this month's 10-minute video for Canadian Tax and Financial Professionals:

Estate Planning Tools and Challenges

Two highly experienced professionals discuss tools such as multiple wills, beneficiary designations, intent, segregated funds and other tools, as well as their challenges.

Information For Business Owners

See our Business page for articles for self-employed people and incorporated businesses - taxes, expenses, employees, payroll, keeping records, whether to incorporate, and many other topics.

Which is Better - TFSA or RRSP - or FHSA?

Generally, if you're in the lowest tax bracket TFSAs are a better option. The First Home Savings Account (FHSA) may be a better choice than RRSPs for some people.

2018-2023 Basic Canadian Income Tax Calculator

Great for tax practitioners and financial planners, super-quick calculator displays taxes/marginal tax rates for every province/territory, allows comparisons between 2 versions.

2022/2023 Investment Income Tax Calculator

Based on the detailed calculator, displays the big difference in taxes payable on different types of investment income. See how you can save tax using Cdn dividends!

2022/2023 Detailed Canadian Tax & RRSP Savings Calculator

Time to start 2023 tax planning! The calculator has been updated for the PEI 2023 budget changes.

Prince Edward Island 2023 Budget - May 25, 2023

Personal, spousal and age amounts increased for 2023 and 2024, new tax brackets for 2024 with revised tax rates, 10% surtax eliminated for 2024 and later years, low income tax reduction threshold increased for 2023 and 2024.

Registered Disability Savings Plans (RDSPs)

Their purpose is to ensure financial security for a child or adult with a disability, when parents are no longer able to provide support.  An RDSP can also be set up by an adult eligible for the disability tax credit themselves, to help ensure their future financial security.

RRSP vs Mortgage Calculator

Is it better to increase your monthly mortgage payment, or contribute the extra amount to an RRSP? Our calculator may help with this, but unless your RRSP returns are going to be consistently higher than the rate on your debt, it is better to pay down your debt.

Provincial Political Contribution Tax Credit

The only change for 2023 is Ontario, which is indexed for inflation. The tax credit is refundable in Ontario and Nunavut.

Borrowing to Invest - NOT for Novice Investors

In most cases, the interest on the debt is only tax deductible as long as you own the investments. The interest rate, the dividend yield and your marginal tax rate will all be considerations for your decision on whether to use this strategy. Use our calculator to help with your decision.

Your Principal Residence Sale May Not Be Tax Free

The principal residence exemption depends on your intent when you purchased the property, how long you've owned the property, and the size of the property. A US citizen selling their home in Canada will most likely be subject to US tax on any gain.

US Federal Estate Tax Calculator For Canadians

Whether or not US estate tax is payable will depend on the person's total worldwide estate as well as their U.S.-situated assets.  This calculator is for a Canadian who is not a US citizen. 

US Estate Tax For Canadians

A U.S. federal estate tax return must be filed if a deceased Canadian resident who is not an American citizen owned U.S.-situated assets exceeding $60,000 US in fair market value at the time of death.

Grocery Rebate

This one-time additional GST/HST credit will be delivered to eligible Canadians on July 5, 2023.  Bill C-46 included the legislation for the payment, and received Royal Assent on May 11, 2023.  The payment is based on 2021 tax returns.

Can CRA Withhold My Tax Refund and Benefits or Garnish My Wages?

Yes, they can.  If you can't pay all your tax on time, pay as much as you can on a regular basis. Interest will continue to be charged.

April 2023

Life in the Tax Lane May 2023

What If I Can't Afford to Pay the Tax I Owe?

File your tax return on time even if you can't afford to pay the balance owing, to avoid penalties! Then contact Canada Revenue Agency as soon as possible to discuss your options.

2023 Corporate Income Tax Rates

General, small business (CCPC), and CCPC investment income tax rates for 2023 have not changed from 2022 thus far except for the SK small business rate increase to 1% for July 1, 2023.

Canada's Underused Housing Tax (UHT) - Do You Have to File a Return?

This is complicated. Are you a Canadian who co-owns property in/on which you reside as well as operate a farm or other business? Do you co-own rental property and file your T776 or T2125 as a partnership? Does your Cdn corporation own property on which there is a "housing unit"? Are you Trustee of a Trust owning a "housing unit"? Not all accountants are familiar enough with the UHT to determine if individuals or organizations are required to file, even though they may not owe tax.

With minimum penalties of $5,000 per individual per property and $10,000 per non-individual per property, don't rely on someone else's opinion that you don't need to file, unless they indicate in writing that they'll pay the penalty if they're incorrect.

April 2023 Climate Action Incentive Payments Delayed For Many

Taxpayers whose 2022 personal income tax returns were not assessed on or before March 24th did not receive their April 14, 2023 climate action incentive payments. Those eligible will receive their April payments in July.

Filing Your Personal Income Tax Return

Make sure you didn't miss any deductions or tax credits! Check your results with our calculator. Know your due dates, check the status of your tax return, dealing with CRA.

Ontario Municipal Vacant Homes Taxes - Buyers Beware!

Toronto, Ottawa and Hamilton have vacant home taxes, and one is probably coming soon to Peel. Buyers of new homes may find themselves on the hook for unfiled declarations or unpaid taxes from before they purchased their new home.

Rental Property Expenses and Issues

Learn about deductible expenses, renting below FMV, rental losses, change in use of your home, capital vs expense, motor vehicle expenses, foreign rental property, and more.

Tax Treatment of Income From Investments in Mutual Funds

Mutual fund distributions can be made up of eligible dividends, capital gains, reinvested distributions, return of capital, other income, foreign income, foreign tax withheld, and management fee rebates.  These affect your income tax differently, and may affect your adjusted cost base (ACB).

Attendant Care Costs

Figuring out how to claim attendant care costs can be complicated, as they can be claimed as medical expenses, sometimes as disability supports deductions. The $10,000 limit for attendant care as medical expenses is per paying individual, not per patient, which makes cost sharing among supporting persons advantageous.  There are 2 options when claiming attendant care costs as medical expenses for a person who qualifies for the disability amount.

Federal and Provincial Home Renovation Tax Credits

Renos done to your home in 2022? Check to see if you're eligible for a tax credit. BC, NB & ON credits are refundable. SK credit available to all SK homeowners.

March 2023

CRA Dedicated Telephone Service (DTS) for Income Tax Service Providers

The DTS provides free technical help from experienced CRA officers for small and medium income tax service providers.

Life in the Tax Lane April 2023

Basic Income Tax Calculator

This very simple calculator for 2023 and earlier years displays taxes and marginal tax rates for all provinces & territories, and allows you to easily compare 2 different scenarios. Helpful for everyone, including tax pros and financial planners.

2022/23 Detailed Canadian Tax and RRSP Savings Calculator

For all provinces & territories except Quebec, updated with 2023 provincial budget changes. Now includes ON Seniors Care at Home Refundable Tax Credit for 2022 and 2023.  Good for checking against your tax software!

2022/23 Detailed Quebec Tax and RRSP Savings Calculator

Updated with 2023 Quebec budget changes. Good for checking against your tax software!

Federal 2023 Budget - March 28, 2023

No plans to balance the budget in the next 5 years; Several personal tax measures; Many #business tax measures; See our summary info with links to the detailed info in the budget.

Federal Underused Housing Tax (UHT) - This Affects Canadians Also

Our article now has more information on interpreting the UHT and filing the form. CRA has announced penalties and interest will be waived if returns filed/tax paid by Oct 31, 2023.

BC Refundable Home Reno Tax Credit

For seniors, and persons with disabilities or family they live with, up to $1,000 refund for eligible expenditures to enable access, improve mobility, or reduce the risk of harm.

Ontario 2023 Budget - March 23, 2023

No personal or corporate income tax changes; New 10% Ontario Made Manufacturing Investment Tax Credit; Gas and fuel tax cuts extended; GAINS program to be expanded, indexed for inflation; and a few other changes.

Nova Scotia 2023 Budget - March 23, 2023

No personal or corporate income tax changes, other than expansion of the More Opportunity for Skill Trades (MOST) program to include registered nurses, licensed practical nurses, and nurse practitioners who work for publicly funded employers.

Newfoundland & Labrador 2023 Budget - March 23, 2023

Physical Activity Refundable Tax Credit doubling; Senior's Benefit and Income Supplement increasing; no tax or fee increases, and a few other changes.

Saskatchewan 2023 Budget - March 22, 2023

No personal income tax changes; Manufacturing and Processing Exporter Tax Incentive extended until Dec 31, 2023; Mineral Exploration Tax Credit increased from 10% to 30%.

Quebec 2023 Budget - March 21, 2023

2023 tax rates reduced for bottom 2 tax brackets; Tax rate for tax credits reduced, but some amounts increased to compensate; Volunteer firefighter/search and rescue tax credit increased; New corporate tax holiday for large investment projects; and more.

New Brunswick 2023 Budget - March 21, 2023

No personal or corporate income tax changes were announced.  NB will be adopting the federal "backstop" for carbon tax, which will result in NB residents seeing climate action incentive rebates from the federal government.

Ontario Seniors' Care At Home Refundable Tax Credit

Based on medical expenses, for those age 70+, available whether senior lives in their own home or elsewhere.  Reduced by 5% of family net income over $35,000.

Manitoba 2023 Budget - March 7, 2023

The Basic Personal Amount is increased to $15,000 for 2023; Personal income tax brackets for 2024 will be $47,000 and $100,000; Health and Post-Secondary Education Tax Levy exemption threshold raised; Mineral and Green Energy Equipment tax credits are made permanent.

Federal Climate Action Incentive (CAI) Payments

CAI payments are currently received by residents of AB, MB, ON, and SK. Starting July 1, 2023 they will also be received by residents of NL, NS and PE.  File your tax return on time to receive these quarterly payments!

US-Canadian Foreign Exchange Rate History

See our table of year-end and annual average US exchange rates for the years 1997 to 2022.  Links are included to sites where more rates can be found.

Foreign Asset Reporting - Form T1135

If a Canadian resident individual, corporation or trust holds foreign investment property with a cost exceeding $100,000 Canadian at any time in the year, form T1135 must be filed with the tax return.  Make sure you file this form if needed, as the penalties can be onerous.

Yukon 2023 Budget - March 2, 2023

There were no income tax changes announced in the Yukon budget.

February 2023

Alberta 2023 Budget - February 28, 2023

New Agri-Processing Investment Tax Credit; Increase in the donation tax credit rate; Cap on tuition, reducing student loan interest rates; Increasing Alberta adoption expense tax credit.

BC 2023 Budget - February 28, 2023

Increased BC Family Benefit; Home Owner Grant threshold increase; New renter's tax credit; PST exemption for AEDs; Partial property transfer tax exemption for new purpose-built rental buildings.

Partnerships and the Underused Housing Tax(UHT)

It seems likely that Canadian citizens who are joint owners of their home, who are conducting a business from their home, will have to file the UHT return even though they will not be subject to the tax.

Life in the Tax Lane March 2023

Nunavut 2023 Budget - February 23, 2023

The Nunavut budget had no income tax changes, but proposes a new Carbon Credit and one-time heating fuel subsidy. New liquor tax to be implemented in 2023.

BC Speculation and Vacancy Tax Due Date March 31, 2023

Many homeowners in BC must file a declaration, even if they are exempt from the tax.  You should receive your declaration letter by the end of February. Complete your declaration right away so as not to miss the due date!

2023 Donation Tax Credit Rates

There is one possible change to 2023 donation tax credit rates so far. Alberta has passed a bill to increase the rate on the first $200 from 10% to 60%, but the date it will be effective has not yet been announced.

Frequent Speculative Trading in a TFSA Can be Very Costly!

If a taxpayer is deemed to be carrying on a business (e.g., day-trading), tax is payable at the highest personal tax rate, and the gains will be income gains (100% of gain is taxed), not capital gains (50% is taxed).  This has been confirmed by the Tax Court of Canada.

First Home Savings Account (FHSA) - Tax-Free

EVERYONE planning to buy a home should open a First Home Savings Account! Tax-deductible contributions and tax-free withdrawals - the best of RRSPs and TFSAs.  Use with the Home Buyers' Plan for a bigger down payment. Available April 1, 2023.

RRSP Deadline Tuesday, March 1, 2023

March 1, 2023 is the deadline for making your RRSP contributions for the 2022 taxation year. RRSPs are one of the best tax-saving tools available to Canadians, but if you're currently low income, TFSAs would likely be better for you.

Northwest Territories 2023 Budget

No changes to personal or corporate income tax rates; Property mill rates and some fees increase by inflation; carbon tax rates start to increase annually by $15/tonne on April 1, 2023 until they reach $170/tonne on April 1, 2030.

Employee Taxable and Non-Taxable Benefits

CRA announced new/updated administrative policies in late 2022 related to employee parking benefits, social events provided by an employer, and gifts and awards provided by an employer.  

CPP, OAS and EI Tax Slips Available Online

Official PDF versions of your tax slips for CPP, OAS and EI are available now in your "My Service Canada" account.  The tax slips are also available through your CRA My Account, but not the "official" ones. There are links in your online accounts to make it easy to move from CRA to Service Canada and back again.

January 2023

Life in the Tax Lane February 2023

Quebec Tax Credit For Childcare Expenses

RL-24 slips MUST be provided to claim childcare expenses for 2022 and later years. This is a change from prior years in which childcare receipts were sufficient.

Canada's Underused Housing Tax (UHT) - Canadians Are Also Affected!

If a Canadian trust, partnership or corporation owns a "housing unit" (doesn't have to be on residentially zoned property) in Canada, then the Underused Housing Tax return will have to be filed by May 1st, even if no tax is payable.  Those who fail to file by May 1, 2023 will pay large penalties (minimum $5,000 for individuals, $10,000 for non-individuals) even if they are exempt from the tax.

More resources are now available to help Canadians, non-resident non-Canadians, and accounting and tax professionals navigate this complicated legislation.

Which is Better - TFSAs or RRSPs?

If you're in the lowest tax bracket, use TFSAs first!  If not, read our article and then make use of the TFSA vs RRSP calculator to help you decide.

Provincial/Territorial 2023-24 Budget Consultations

There's still time for taxpayer input into 2023 budget for many provinces, but the deadline has passed for Alberta, BC and PEI.  AB, NB and SK have set dates for their 2023 budgets.

Prescribed Rate Loans to Spouses or Minor Children

The interest on a prescribed rate loan to spouses/children is always calculated at the rate in effect when the loan is created. The rate increased to 4% Jan 1/23, and will increase to 5% on Apr 1/23.

Shareholder Loans and Their Tax Implications

A shareholder can be deemed to receive taxable benefits related to s/h loans, either if insufficient interest is paid on the loan (even if not outstanding at year-end), or if the loan is not repaid within a certain time.

T1135 Foreign Asset Reporting

Did you own foreign assets (securities, real estate, life insurance policies, etc.) with total cost over $100,000 Cdn at any time in 2022? You must file form T1135, and penalties for not filing are high. Learn what's included, how to find the country code (even for ADRs), how to complete the form.

Making a Spousal RRSP Contribution Online

If you plan to make a spousal RRSP contribution online, BE CAREFUL!  Your spouse probably has to be logged into their RRSP account online to do this, and indicate it is a spousal contribution.  If you're not sure about what you're doing, don't do the contribution online.

Was Your Status as a BC Developing Farm Revoked?

If it was revoked because you didn't follow your development plan or meet your expected harvest date, but you did meet all requirements of the Farm Regulation, then your farm status was revoked in error.  Time to "file a complaint", by Jan 31st.

Alberta Donation Tax Credit Rate

A Private Members' Bill received Royal Assent in December, increasing the tax credit rate for the first $200 of charitable donations from 10% to 60%.  The change to the rate is not yet in effect.

2023 Non-Refundable Personal Tax Credits

We've published the tables of non-refundable tax credits for 2023 for Canada and all provinces and territories.

Historical Returns on Stocks, Bonds, T-Bills

2022 was not a good year for stock markets. However, over the past 5 or more years one would be far ahead by investing in most stock markets rather than T-bills or bonds. See returns for up to 72 years, and growth of $1,000 invested.

Investment Return Calculator

Use our calculator to determine your returns for 2022 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 2022 is 1.3013, which can be used for dividends and proceeds of sale, but not for adjusted cost basis.

Prior Years:

What's New 2022

What's New 2021

What's New 2020

What's New 2019

What's New 2018

What's New 2017

What's New 2016

What's New 2015

What's New 2014

What's New 2013

What's New 2012

What's New 2011

What's New 2010

What's New 2009

What's New 2008

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Revised: April 18, 2025