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What's New by Month

October 2020

2021 Personal Tax Credits

The 2021 tables of non-refundable tax credits are now available. Saskatchewan has restarted indexing for 2021.

Prescribed Rate Loans to Shareholders, Spouses, etc.

The Jan 2021 prescribed rate will remain at 1% based on the average yields for 3-month t-bills in Oct 2020 (1/10th of 1%).  The rate can't go below 1% because it's rounded up to next higher whole percentage.

Ontario 2020 Budget

Ontario will release their 2020 Budget on November 5, 2020.

Life in the Tax Lane November

This month's video discusses:
 - New commercial rent subsidy (CRS)
 - Expanded CEBA
 - Extended CEWS
 - Interatctive tool for financial assistance for businesses
 - Working from home
 - Travel home office to employer's office
 - Principal residence exemption (PRE) multiple sales

CEWS 2.0 Estimator

Estimator for periods up to December 19, 2020 - very useful tool to calculate the subsidy, and to forecast future subsidies based on different scenarios.

CEBA For Businesses Using Personal Bank Accounts

Long awaited!  Also coming soon - expansion of CEBA from $40k to $60k, with $20k of the $60k forgivable.

CEBA Forgivable Loan Taxable When Received

Confirmed by CRA, in CPA/CRA webinar that the forgivable portion of the loan is taxable when received.

COVID-19 One-Time Payment for Persons With Disabilities - Deadline Extended

The deadline for applications for the disability tax credit, to qualify for this payment, has been extended to December 31st.

Basic Tax Calculator for 2021 and Earlier Years

Shows taxes payable, average and marginal tax rates for all provinces for employment/other income, capital gains, eligible and non-eligible Canadian dividends. Compare 6 years of taxes payable by province.

2021 Personal Tax Rate Tables

The tables show the combined federal and provincial/territorial tax rates for capital gains, both types of Canadian dividends, and other income.  Things could change with 2021 budgets. Not confirmed to CRA or to Revenue Quebec.

Zero-Emission Vehicles (ZEVs) - Enhanced CCA

First-year CCA of 100% may be claimable for ZEVs and ZEPVs purchased after March 18, 2019, by corporations, self-employed and employees.

Employee Work-Space-In-Home (WSIH) Expenses

If you are an employee who always works from home, or are temporarily working from home, the requirement for this from your employer should be documented now.

Canada Emergency Wage Subsidy (CEWS) Extended to June 2021 - More Details

More details have been released on the CEWS extension to June 2021, for periods 8, 9 and 10.

Principal Residence, Owner in Long-Term Care, Home Inhabited by a Child

If a taxpayer enters long-term care, they may still retain the principal residence exemption for their home if their child lives in the home, even if the child pays rent.

Canada Response Benefit (CRB), Canada Recovery Sickness Benefit (CRSB) and Canada Recovery Caregiving Benefit (CRCB)

Applications opened Monday October 12th for the 3 benefits replacing the CERB, and more information is available on the CRA website.

Working From Home Travel Expenses

An employee who normally works from home might be able to either deduct travel expenses or receive a tax-free mileage allowance for occasional travel to their employer's place of business.

Borrow to Invest Calculator

This calculator will now print the input and results sheet with no ads or borders.  You should not borrow to invest unless you are an experienced investor.

RRSP vs Mortgage Calculator

Should you pay down your mortgage, or contribute to an RRSP? This calculator will now print the results with no ads or borders.

One-Time Disability Payment

The one-time non-taxable payment for those with disabilities will be paid starting October 30, 2020.

Caution re Type of CEBA Loan

Apparently some financial institutions are using LOC or Visa-type loans for CEBA loans.  The forgivable 25% is based on the maximum owing up to Dec 31, 2020.

Canada Emergency Rent Subsidy (CERS)

A new subsidy to provide rent/mortgage support until June 2021, directly to tenants. Expense subsidy of up to 65% until Dec 19, 2020, plus top-up of 25% for organizations shut down by COVID.

Canada Emergency Business Account (CEBA) Expanded

An expanded CEBA will provide up to $20,000 further interest-free loan, 50% forgivable if repaid by Dec 31/22.  Attestation of COVID-19 impact will be required. CEBA deadline extended.

CEWS Baseline Remuneration Calculation Clarified

CRA has (finally!!) clarified that baseline remuneration paid is divided by the number of weeks to which it relates, to get the average per week.

Newfoundland and Labrador 2020 Budget - September 30, 2020

The NL budget had no income tax changes. There were increases in tobacco and vaping product taxes and carbon tax, and a reduction of the provincial portion of gas tax.

September 2020

Life in the Tax Lane October

This month's video discusses:
 - CEWS audit letter / what to do
 - CERB replacements
 - Dividends paid when CRA is owed money
 - Reasonable meal allowances
 - Loan documentation
 - T2 Schedule 50 - CRA letter campaign

Minimum Wages and Employment Standards

Employers and employees should be aware of minimum wage rates and current employment standards.  NL's minimum wage will increase on Oct 1st.  The highest minimum wage province is AB.

Old Age Security (OAS) Clawback

If you have capital losses carried forward and unrealized capital gains, and are not going to be collecting your OAS pension for a year or so yet, you may be able to do something now to avoid or reduce an OAS clawback in the future.

Donating Shares or Other Capital Property Can Eliminate Capital Gains

Capital gains can be eliminated by donating certain types of capital property to qualified donees.  If you were planning to make a donation of cash but could donate property instead, you can save some tax money.  Best to do this by the end of November for shares, or possibly months earlier for mutual funds.

Transferring Capital Losses to a Spouse

Capital losses can be transferred to a spouse by utilizing the superficial loss rules.  Your spouse must hold the shares for more than 30 days after your disposition before selling the shares.

CECRA Application Deadline Sep 30

The deadline for new applications under the commercial rental assistance program is Sep 30, 2020. The deadline to opt-in for the September extension is Oct 30, 2020.

Joint Accounts and Beneficial Ownership / Probate

Some financial institutions now offer a joint account in which the account holder retains complete control, but which will pass to the named successor account holder(s) upon death. This eliminates uncertainty in regard to ownership and probate.

Bill C-2 Sep 24, 2020 - CERB Replacements

Bill C-2 includes 3 benefits to replace CERB, as well as a provision to give the Government authority to spend  up to $17.1 billion on specific measures from Oct-Dec 2020.

Federal Throne Speech - September 23, 2020

CEWS to be extended, CEBA expanded, OAS increased at age 75, many other general proposals in the Throne Speech.

BC Economic Recovery Plan - September 17, 2020

BC's plan includes grants for small/medium businesses, tax credit for increased payroll in Q4 2020, 100% PST rebate for machinery/equipment, as well as measures re child care, skills training etc.

Employee Work Space In Home Deduction

BLG article: CRA has released a draft of a proposed "short-form" T2200 related to increased working-from-home (WFH) during the pandemic.

2021 Employment Insurance (EI) Rates

The 2021 base EI rates are unchanged from 2020 due to the pandemic: 1.58% for employees, 2.212% for employers. However, the maximum insurable earnings (MIE) is increased by 3.9% to $56,300. Quebec's rates are reduced to 1.18% for employees and 1.652% for employers.

CECRA Extended, Aug 31 Deadline Revised

Besides the extension to September, commercial landlords can now make NEW applications for up to 6 months (Apr to Sep) of rent relief at once. Revised deadlines not yet announced.

Increased Rate Meal Benefits and Allowances

The rate for transport employees and other individuals to claim meal expenses using the simplified method has increased to $23 per meal from $17, effective Jan 1, 2020.

Ontario Senior Homeowners' Property Tax Grant (OSHPTG) Warning

The OSHPTG is a refundable tax credit for Ontarians.  CRA is warning about schemes where promoters claim they can get a tax refund for taxpayers relating to the OSHPTG.

CEBA Loan Deadline Extended

The deadline for applications for CEBA loans has been extended from August 31 to October 31, and they're working on changes so that those without a business bank account might be eligible.

August 2020

Attendant Care Expenses

Attendant care costs can be claimed for persons who are eligible for the disability amount, and in some situations for persons who do not qualify for the disability amount.  The limit on Federal and Ontario attendant care expenses only applies if the taxpayer claimed the disability amount.

Can't Afford Tax Software? NetFile Your Tax Return for Free

Don't use paper forms when you can NetFile for free - some software packages are free for everyone.  Volunteer Tax Clinics are also still available, many until September 30th.

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

Always file your tax return on time, even if you can't afford the tax, in order to avoid late filing penalties!!  Then talk to Canada Revenue Agency.

Life in the Tax Lane September

This month's video discusses:
 - CPP - When to apply
 - Gross negligence penalties - denied business expenses/unreported income
 - Canada Emergency Wage Subsidy (CEWS) - estimator/resources
 - Real estate commissions court case

Additional T4 Reporting Requirements for 2020

To help CRA validate payments under CEWS, CERB and CESB, there will be 4 new employment income codes.  These codes correspond to the periods for which CERB payments are being made.

CEBA Application Hotline

A CEBA application hotline is now available so that you can follow up with questions on the status of your application. If your question is regarding eligibility criteria or non-deferrable expense criteria, they will just tell you that what is on the CEBA website applies.

CEWS 2.0 Application Elections

Confused about what elections to "tick" when applying for CEWS? We've documented a few of the more common elections needed.

August 20, 2020 CERB Changes

CERB is extended by 4 weeks to Sep 26th and then replaced by three new benefits.  EI is to be simplified. EI rates for 2021/22 frozen at 2020 rates.

Reduce Tax Payments Now for RRSP Contributions

If you've made RRSP contributions not done through your employer, you can request a reduction to the tax withheld from your employment income.  If self-employed, you may be able to reduce instalments.

Non-Capital Losses

If line 23600 of your tax return would be negative if not for the rule that it is zero if negative, you may have a non-capital loss that can be carried back 3 years or forward up to 20 years.

Life Insurance and Medical Assistance in Dying (MAID)

Learn the facts about how MAID may affect your life insurance policy - from All About Estates.

How are RRSPs and RRIFs Taxed at Death?

The value of the RRSP or RRIF is included in the income of the deceased.  When there are named beneficiaries, no tax is withheld when the account is paid to the beneficiary, so the estate plan should ensure that funds are available to pay any tax liability.  Named beneficiaries can be held liable for taxes unpaid by the estate.

CRA CEWS 2.0 Calculators

Canada Revenue Agency unveiled its new CEWS 2.0 wage subsidy calculators on Aug 11th - online calculator for small number of employees, or downloadable spreadsheet for large number of employees.

COVID Disability Payments Starting Fall 2020

Payments will be issued beginning this fall.  If you are eligible for the disability tax credit but have not applied, or your certificate expired in 2019, you must apply by Sep 25th.  Payments will be issued automatically for eligible individuals.

CEWS 2.0 Calculators

There are calculators available to assist businesses with the very complicated revised wage subsidy.

RIF Beneficiary Designation Ignored by Court

In a surprising 2020 Ontario Superior Court Case, it was decided that a RIF with a designated beneficiary would instead go to the estate.

July 2020

Prescribed Interest Rate Q4 2020

The rate for calculating taxable benefits from low-interest and interest-free loans to employees and shareholders, and for loans to spouses or children, will remain at 1% for Q4 2020 beginning Oct 1st.

Capital vs Expense

Everyone in business or with a rental property is faced at some point with the decision as to whether an expense should be capitalized or expensed.  There are general guidelines, but in some cases the decision is left to the courts.

Newfoundland and Labrador 2020-21 Fiscal and Economic Update

The NL government released its update on July 24, 2020.  They plan to table a 2020-21 budget prior to the end of summer.

Life in the Tax Lane August

This month's video discusses:
 - COVID-19 - CEWS Major Changes
 - COVID-19 - Disability Support
 - Trading in Securities
 - Loans for Value - Income Splitting Tool
 - CRA Project on U.S. Real Estate Coming?
 - Voluntary Departure

One-Time Disability Payment Legislation Passed

Bill C-20, which has legislation related to the one-time tax-free disability payment, received Royal Assent July 27, 2020.  Those who have not yet applied for the disability tax credit but are eligible have until September 25, 2020 to apply.

Tax-Free or Reduced Tax Employee Benefits

There are several tax-free employee benefits, and there are some that are surprisingly taxable!

Tax Deadlines Extended to September 30, 2020

Payment due dates for individual, corporate and trust returns are extended to Sep 30, 2020 from Sep 1, 2020.  No penalties or interest will be charged, including the late-filing penalty, as long as the return is filed by Sep 30th - but October estimated benefits/credits may be affected!  Interest on existing tax debt is waived for certain periods.

OAS Recovery Tax Notice Errors

Although the OAS recovery tax notices sent out in July 2020 appear to have the correct tax amount, the rest of the information has not been updated with 2020 threshold/dates.

RRSP/RRIF Withdrawal Calculator - Printing

Results will now print without ads, headers, etc. Forecast your increases in and withdrawals from your RRSP or RRIF, see how long your investments will last.

One-Time Disability Payments - Expanded Eligibility

Eligibility for this tax-free payment will be expanded to CPP disability benefit recipients, Veterans receiving disability supports, and those who qualify for the disability tax credit but have not yet applied, if they apply soon.

Major CEWS Changes - July 17, 2020

The CEWS has just become a lot more complicated, and is now available to a lot more businesses.  For periods starting July 5, 2020 and later, the % subsidy is dependent on the % revenue reduction, and ANY revenue reduction is eligible.

Tuition Credit Problem

The tuition/education/textbook amounts carried forward are always reduced by the maximum amount that can be claimed in the year, even if the maximum amount is not claimed.  This sometimes means that credits such as the dividend tax credit cannot be used.

Federal Economic and Fiscal Snapshot - July 8, 2020

The Economic and Fiscal Snapshot summarized all COVID-19 financial relief.  The deficit is projected to be $343.2 billion for the 2020-21 fiscal year.  This would increase the interest-bearing debt to over $1.4 trillion. No tax changes were announced.

RRSP Home Buyers' Plan

The Home Buyer's Plan (HBP) allows you to borrow up to $35,000 from your RRSP to buy or build a qualifying home.

Basic Canadian Tax Calculator - Printing Updated

This very simple tax-planning calculator which shows taxes payable and marginal tax rates for all provinces and territories will now print results on 1 page with no ads/headers etc.  This calculator can help you estimate how much you'll owe next April on those CERB payments!

Multiple Wills

In some provinces, including BC, having multiple wills can reduce probate fees.  One will can be prepared for the assets requiring probate, and a separate will can be prepared for the assets not requiring probate, such as shares of a private corporation (in BC).

Taxable Income From CECRA and CEBA: No Effect on CEWS

Funding received from government sources can be excluded from the determination of "qualifying revenue" for calculation of the 30% revenue decline for the wage subsidy.

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

Shares can be transferred from a non-registered account to a registered account such as an RRSP.  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.

CEBA Non-Deferrable Expenses Stream

Updated FAQ: Which expenses are/are not eligible for the non-deferrable expenses stream business loan of up to $40,000 (25% forgivable), and what documentation is required.

CECRA Extended to July

Only the tenants approved for the April to June Commercial Rental Assistance are eligible for the July support, and they are automatically eligible, but the landlord must apply, and not all tenants need to be included.  Clawback provisions are being removed retroactively.

Accounting Treatment CECRA and CEBA

The accounting treatment for CECRA and the 25% forgivable portion of the CEBA loan is similar to the tax treatment - included in income or deducted from expenses when received, unless it relates to expenses in future periods.

BC PharmaCare Income Review Application

If your income for 2020 has been reduced due to COVID-19, you can apply for an income review in order to reduce your PharmaCare deductible and family maximum.

June 2020

Life in the Tax Lane July

This month's video discusses:
 - National Leads Tip Program
 - Fake Kids Enforcement Notification
 - CERB, CEWS, and CESB Enforcement
 - Managing Your Business During COVID-19
 - Buyers and Sellers of PPE
 - POST Promise
 - CEWS Program Extension
 - CEWS Adjustment Requests 
 - CERB $1,000 Threshold Update
 - Bill C-17 (CERB, CEWS, Disability Payment)
 - CECRA Extended
 - CEBA Expanded Eligibility

CECRA and CEBA Forgivable Loans are Taxable

The CECRA and the forgivable portion of CEBA are taxable when received in 2020, but if repaid may be deducted when repaid.

Federal Economic Update Next Week

The federal government will provide an economic update on Wednesday, July 8th.

Alberta's Recovery Plan - June 29, 2020

Alberta is reducing the corporate income tax rate to 8% effective July 1, 2020 (Job Creation Tax Cut), and introducing an Innovation Employment Grant.

BC Home Owner Grant

The BC Home Owner Grant reduces the property taxes payable on your principal residence. Once a grant has been claimed for a tax year, another grant cannot be claimed by you or your spouse.

Expanded CEBA Now Available - June 26, 2020

Businesses with 2019 payroll less than $20,000 and eligible non-deferrable expenses between $40,000 and $1.5 million are now able to apply online for CEBA through their financial institution.

Canada Student Service Grant - Opened June 25, 2020

This will provide up to $5,000 to support student's post-secondary education costs in the fall, for students who take part in national service activities.  Paid work placements are also available.

Old Age Security (OAS) Clawback

Your OAS is taxable, and if your net income before adjustments (which also means before deducting loss carry-forwards) exceeds $79,054 in 2020 you will have to repay 15% of your income over that amount, to a maximum of the total OAS you received.

Tax Planning for 2020 - Start Now!

Tax planning should be top of mind long before next April, and for business owners and high-wealth individuals it should always be on your mind. If your tax situation is complicated, find a tax specialist now, not next tax season!

Investment Income Tax Calculator

See the big difference in taxes payable on different types of investment income.  We've added "net income after tax" to the calculator.  You can now print a 1 page summary of results with no ads (in colour if your settings are correct).

Federal Budget-Related Resources

The links to these resources have been moved to the top of the page for easier access. They include draft legislation, bills, Hansard (frustrating to read), GC Infobase (LOTS of data), and PBO independent financial analysis.

2019/2020 Detailed Canadian Tax and RRSP Savings Calculator - Printing

We've added a new print function to print a 2 page summary of results with no ads, headers or footers. It will print in colour with Chrome, Firefox or Vivaldi if your settings are correct.

Quebec Economic Update - June 19, 2020

The economic update details the reduction of $8.8 billion to Quebec's revenue due to the economic contraction, and provides information on fiscal measures taken re COVID-19.

PEI 2020 Budget - June 17, 2020

PEI is raising the basic personal amount, lowering the small business tax rate, increasing the threshold for the low-income tax reduction, and creating a $500 non-refundable Children's Wellness tax credit. All measures effective for 2021.

Parliamentary Budget Officer Update June 18, 2020

Estimated COVID-19 related spending has increased to $169 billion for the 2020-21 fiscal year which started Apr 1/20.  This increases the interest-bearing debt for a family of 4 to about $157,656.

Canada Emergency Business Account (CEBA) Expanded

Applications under the CEBA "Non-Deferrable Expenses Stream" were to be accepted commencing Friday June 19th, but the website indicates there will be a "slight" delay in commencement.  This is for businesses with annual payroll under $20,000 and eligible non-deferrable expenses between $40,000 and $1.5 million.

Canada Emergency Response Benefit (CERB) Extended

CERB has been extended by 8 weeks, making it available to eligible workers for up to a total of 24 weeks.  Don't forget it's taxable, but no tax is being deducted!

CPP Retirement Calculator

We've added a new feature to this calculator, which allows you to print without ads, borders, etc. But to print in colour, you'll have to use Chrome or Vivaldi.  We'll be adding this feature to other calculators over time.

TFSA vs RRSP - Which is Better?

This depends on your financial situation.  Low income? Probably TFSA. See our analysis, and check out the TFSA vs RRSP Calculator.

Canada Emergency Response Benefit (CERB) Penalties/Fines

Bill C-17 outlines fines and penalties for fraudulent CERB claims, and may make workers ineligible for CERB if they decline to return to work.

COVID-19 Payments for Canadians with Disabilities

Those with a disability tax credit certificate will receive a one-time tax-free payment of up to $600, reduced by the one-time tax-free OAS and GIS payments.

Special OAS/GIS Payment Coming July

The previously announced one-time tax-free OAS/GIS payment will be received in the week of July 6th.

Life in the Tax Lane June

This month's video discusses: 
 - Charitable Status - Is Atheism a Religion?
 - Telecommuting Allowances and Reimbursements
 - 10% Temporary Wage Election
 - Supplementary Unemployment Benefit Plans
 - Director Liability - Challenging the Corporate Assessment

May 2020

Consultation on the Canada Emergency Wage Subsidy (CEWS)

The consultation, which closes June 5, 2020, seeks input re potential changes to the CEWS program.  You can participate by completing a short survey, or provide more detailed feedback by email.

Business Resilience Service Hotline

On May 25th the government announced the launch of a toll-free hotline, with 125 CPAs available to provide customized financial guidance to the smallest business owners to help them through this crisis.

Canada Emergency Commercial Rental Assistance (CECRA) Portal Open

The CECRA portal opened this morning for registrations - the day you register depends on province/number of tenants.  We've made a couple of cautionary notes. Patience will be required if you try to call them.

1994 Capital Gains Election

Do you still own capital property for which you elected to claim a capital gain and an exemption in 1994?  Hopefully you still have all the forms you filed for the election.

Late Filing Penalty

On May 25, 2020, Canada Revenue Agency confirmed that as long as the tax return is filed by the payment due date of September 1, there will be no late filing penalty.  This applies to returns due June 1 or June 15, and to other information returns, elections, etc, such as the T1135.

Refundable Medical Expense Supplement

If you have employment or self-employment income exceeding $3,645 in 2019, have claimed medical expenses or a disability supports deduction and have family net income less than $52,599, you may be able to claim a refundable amount of up to $1,248.

Canada Emergency Commercial Rental Assistance (CECRA) Update

The application portal for CECRA will open on May 25th.  Landlords must apply for all 3 months at once.  70% revenue decline from 2019, or from Jan/Feb 2020, is based on average of April, May, and a forecast of June 2020 revenues.

Canada Emergency Business Account (CEBA) Expansion

CEBA (interest-free loans) is being expanded to be available to sole proprietors, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.

Medical Expense Tax Credit (METC)

The amount of METC is dependent on the taxpayer's net income for tax purposes.  If net income is too high, there will be no tax credit.  We've added a few examples of the calculation at different income levels.

Canada Emergency Wage Subsidy Baseline Remuneration

For each employee, employers will be able to choose between 2 periods for baseline remuneration: wages paid Jan 1 to Mar 15/20, or Mar 1 to May 31/19. This change retroactive, so will apply to the first claim period starting Mar 15/20.

Canada Emergency Wage Subsidy (CEWS) Extended

The CEWS program is being extended by 12 weeks to August 29, 2020.  Eligibility is being expanded, and the 30% revenue decline test and other provisions may be adjusted, with the intention to spur jobs and growth.

Ceasing Business

When a business is being closed down, there are many tax and regulatory issues that need to be addressed.

Regional Relief and Recovery Fund (RRRF)

Announced May 13th, about $1 billion to help "regional economies and small and medium businesses" that may require additional help to recover from the COVID-19 pandemic, but have been unable to access existing support measures.

Canada Emergency Student Benefit (CESB)

Applications for the CESB open Friday, May 15th.  We've added links to information on CESB, student loans and grants, and international students.

Free Tax Preparation - Community Volunteer Income Tax Program

Community organizations are hosting free virtual tax clinics. Volunteers may be able to complete and file your taxes for free, by videoconference or by phone.

COVID-19 Payment for Seniors

On May 12, the Prime Minister announced a one-time tax-free payment of $300 for seniors eligible for OAS (regardless of income level), with an additional $200 for seniors eligible for the GIS.

Can the Federal Government Print Money and Spend it?

In effect, yes, this is now being done, because the Bank of Canada has implemented a policy called Quantitative Easing (QE), and through this is buying government of Canada debt.

Real Estate Rentals - Business Income vs Property Income

How to determine if your rental income is business income or property income, differences in tax treatment.

Phone Calls To and From Canada Revenue Agency (CRA)

CRA has started making calls to follow up on subsidy claims. Received a call?  Make sure it's not a scam!  How to document your calls to or from CRA.  How to submit service complaints as well as kudos for good service.

Canada Summer Jobs (CSJ)

Funding/requirement changes for Canada Summer Jobs 2020.

April 2020

Disability Insurance

Employees should pay the premiums on their disability insurance to ensure the income will be tax-free.  If self-employed, it's extremely important to buy disability insurance to protect against extended loss of income.

Resources for Persons With Disabilities

Deductions, refundable and non-refundable tax credits, attendant care expenses.  Some tax credits can be transferred between spouses.  Registered Disability Savings Plans (RDSPs), government benefits, and unlocking locked-in pension plans.

Tax Information for Students

Tax issues for students and/or parents: eligibility for tuition, education and student loan interest tax credits, private school tuition fees, deducting moving expenses, child care expenses.  Added: COVID-19 benefits for students.

COVID-19 Federal Debt

See how much the $145.6 billion direct COVID-19 costs (federal only, doesn't include provincial) will increase the interest-bearing debt of Canada for every adult and child.  Could this have been avoided?

Canada Emergency Response Benefit (CERB) Taxable

Although CERB payments are taxable, no tax is being withheld from the payments.  The tax will have to be paid when the income is reported on 2020 tax returns.  Use our calculator to estimate what you'll owe.

COVID-19 Student Benefits

Student financial assistance increases for fall 2020, emergency student benefit for those ineligible for CERB or EI, student service grants, removal of restrictions of hours worked for international students.

Life in the Tax Lane May

This month's video discusses: 
 - COVID-19 Updates
 - Working From Home - Home Office Costs
 - Directory Liability re GST/HST
 - EI Voluntary Departure
 - Backdating of Documents
 - Childcare Costs Denied

Lending to a Spouse or Child for Investments

Funds loaned to a lower-income spouse or a child can be used to purchase investments, and tax on the investment income will be paid by the lower-income spouse or child at a lower marginal rate.

Canada 75% Emergency Wage Subsidy (CEWS)

Applications for CEWS opens today, April 27th.  The 3rd version of CRA's CEWS calculator doesn't seem to follow the legislation. The Tax Templates Inc calculator follows the legislation.

Canada Emergency Commercial Rental Assistance (CECRA)

The CECRA will lower rent by 75% for small businesses affected by COVID-19, by providing forgivable loans to qualifying commercial property owners to cover 50% of 3 monthly rent payments, for April, May and June.  Details not yet available for how this will be handled for landlords with no mortgage.

Top Marginal Tax Rates in Canada

There are 8 provinces with top marginal tax rates exceeding 50% in 2020.  Of course, the average tax rates are much lower.

Spouse or Common-Law Partner Tax Credit

If your spouse has low income, you may be able to claim a spousal amount tax credit, even if the spouse is a non-resident.  If you separated or divorced during the year, this credit may still be available.

RRIF Minimum Withdrawal Withholding Tax

Tax is withheld from RRIF withdrawals in excess of the minimum amount.  For 2020, tax will only be withheld for withdrawals in excess of the original unreduced minimum amount.

2020 Tax Comparisons Employment Income

BC, Ontario, and Alberta are the lowest tax provinces for a single person earning $50,000. See also comparisons for a single income family with 2 kids.  Taxes include CPP/EI, ON Health Premium, and QC prescription drug premiums.

2020 Tax Comparisons Dividends vs Interest

See the taxes paid at varying levels of eligible and non-eligible dividends and interest for all provinces and territories.  The lowest-tax provinces for higher levels of eligible dividends are Alberta and BC.

2020 Seniors Tax Comparisons Dividends vs Interest

We 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.

Need An Expert in SQL Server, .NET and Access?

My son, Alex Pope, is that expert, and is looking for opportunities with a small to medium-sized firm.  He's located in Maple Ridge, BC, but is well-equipped to work remotely.  Please share this to give him more exposure - searching for job opportunities is hampered a little by a pandemic!

Climate Action Incentive (CAI) / Tax Calculator

The CAI is now included in the Detailed Canadian Tax and RRSP Savings Calculator. The amount must be entered by the user, and is not checked. The calculator includes a link to the CAI article where amounts are available.

Calculators Looking Messed Up?

Sometimes when we've modified a calculator that you've used recently, it will appear "messed up". This is because it retains data. You'll have to clear your browser cache to fix this.

Shareholder Loans

A loan by a corporation to a shareholder may result in a deemed taxable benefit.  Care must be taken in the timing of salary or dividend payments to clear shareholder loans.  The prescribed interest rate for s/h loans for Q2 2020 is unchanged.

Moodys Tax April 13 Video and Blog re 75% Canada Emergency Wage Subsidy (CEWS)

Moodys hosted a Facebook Live video re the CEWS, answering many questions from viewers.  It's still unclear how some parts of the CEWS will be administered, especially for shareholder-employees.

Gift to Spouse for TFSA Contribution - Attribution Rules

When an individual gives funds for their spouse to contribute to a TFSA, once the funds are withdrawn from the TFSA, income and capital gains from those funds will be taxed in the hands of the individual, not the spouse.  This is not the case for spousal contributions to an RRSP.

RRSP/RRIF Withdrawal Calculator

The calculator has been modified to include the 25% reduction in the RRIF minimum withdrawal for 2020. If you haven't converted your RRSP to a RRIF yet, you can still use this calculator to project your earnings and withdrawals for the next 40 years.

Registered Retirement Income Fund (RRIF) Minimum Withdrawals

There is no withdrawal necessary in the year a RRIF is set up, but there are minimum amounts that must be withdrawn annually starting in the year after setup.

COVID-19 Financial Relief for Canadians - April 11, 2020

Bill C-14 for the 75% Canada Employment Wage Subsidy was tabled today in the House of Commons.

Child Care Costs Deduction

Eligible child care expenses can include day-care centres and nursery schools, individual child care services, day camps and day sports schools, private school costs (the portion of tuition costs relating to child care services), boarding schools, and overnight sports schools and camps.

Age Amount Tax Credit

This non-refundable tax credit is clawed back when the income threshold of $37,790 (2019 federal) is exceeded. Capital gains can cause a clawback even when offset completely with capital losses carried forward.

Disability Tax Credit

Eligibility for this non-refundable tax credit includes persons with a severe and prolonged mental or physical impairment which significantly restricts the ability to perform more than one basic activity of daily living. Form T2201 must be completed by a medical practitioner to claim this credit.

COVID-19 Financial Relief for Canadians

This is a comprehensive summary of financial relief announced thus far for individuals, businesses, non-profits and others.  It includes links to many resources.

Canada Emergency Wage Subsidy (CEWS) for Employers

Includes links to Excel workbooks provided by Canada Revenue Agency and by Tax Templates Inc. to help calculate the subsidy. 

Unlocking Your Locked-In Pension Funds

Most pension plans allow the "unlocking" of all or a portion of a LIRA, LIF or LRIF under certain circumstances.

BC One-Time July 2020 Enhanced Climate Action Tax Credit

Eligibility for this payment will be determined from 2019 tax returns, no need to apply. Income thresholds increased, so more individuals may be eligible for the one-time payment.

COVID-19 Canada Emergency Temporary Wage Subsidy (TWS) for Employers

Business will be able to apply for the 10% Canada Emergency Temporary Wage Subsidy via an online portal which will hopefully be available soon. The subsidy will be available to businesses which have had a 30% drop in revenue compared to Mar, Apr and May of last year. See the article for more details.

March 2020

RRSP Contribution Not Recorded on Previous Year Tax Return

If you made RRSP contributions from March 1, 2018 to March 1, 2019, this should have been included on Schedule 7 which was filed with your 2018 tax return.  Check our article to find out what to do if the contribution wasn't recorded, and which line number to use when adjusting your tax return with CRA.

Do I Have to File Both Personal and Business Tax Returns?

If your business is incorporated, you must file a separate corporate income tax return.  If not, the business income is included on specific forms in your personal income tax return.  A professional accountant can help to ensure that you claim all allowable expenses.

Capital or Expense

If you have a business or a rental property, you have to decide whether an expense is capital or current in nature - in other words, whether it should be capitalized or expensed, or if it is personal use.  General guidelines can help.

Reinvested Distributions From Canadian Exchange Traded Funds (ETFs)

The T3 you receive for your income from an ETF may have an amount in box 21 for capital gains.  It is possible that all or part of this amount was not actually paid to you, but was reinvested.  This increases your adjusted cost base (ACB) for the amount of reinvested distributions, which reduces your capital gain when you eventually sell the investment.

Eligible Dividends and the Dividend Tax Credit

When you receive dividends from Canadian public corporations, 138% of the dividend is included in taxable income. Due to the dividend tax credit, the tax on the dividends is much less than it would be on employment income, interest, or foreign dividends.

Saskatchewan 2020 Budget - March 18, 2020

Personal income tax system to be indexed rate starting in 2021; new incentive to encourage investment in the chemical fertilizer sector; extend manufacturing and processing exporter tax incentive for 3 years; and more.

New Brunswick 2020 Budget - March 10, 2020

Residential non-owner-occupied property tax rate reduction, student loan rate reduced, new carbon pricing plan, no personal or corporate income tax changes.

COVID-19 Business Financial Support 

Federal government support for small and medium businesses:
- government-backed interest-free bank loans, partially forgivable,
- 10% temporary wage subsidy and 75% wage subsidy.
- GST/HST remittances can be deferred until June.

The Bank of Canada further reduced the target for the overnight rate, to 0.25%.

Ontario COVID-19 Action Plan March 25, 2020

GAINS payments doubled, student loan payments deferred, new 10% refundable investment tax credit for businesses, business tax deferrals, and more.

Life in the Tax Lane April

This month's video discusses: 
 - COVID-19 - lots of resources
 - Employment Insurance - need to file for EI on time
 - Directory Liability re Payroll Withholdings
 - Tips - Gross Negligence Penalties
 - Is it a Business? Start-ups and Wind-ups
 - CRA My Account - Uncashed Cheques

Tax Refund - How Long Will it Take?

Checking the status of a refund, uncashed refund cheques - now shown in My Account, interest on refunds, mandatory direct deposit.

What Kinds of Income are Not Taxable?

Some non-taxable income is not reported on tax returns.  Some must be reported and later deducted, affecting some tax credits, clawbacks, and income-tested benefits.

COVID-19 Provincial / Territorial Support and Information

All provinces and territories have created special web pages to provide information on COVID-19, how to prevent it, and what financial and other supports are being provided.

Deductible and Non-Deductible Investment Expenses

Which expenses are deductible and which are not?  When does interest become non-deductible (disappearing source rules)?  Where are these expenses claimed on the tax return?

Key Points in Canada's COVID-19 Economic Response Plan

See a detailed summary of the key points, for employees, employers, small business, parents, students, and those with RRIFs.

Temporary Wage Subsidy For Employers re COVID-19

More details are now available about the 10% wage subsidy for employers, and how it can be claimed.

Worthless Shares or Debt

Do you have a worthless investment?  Can't sell it because it was delisted?  There may be a way to claim the capital loss.

Property Rental Deductible Expenses

If you rent out one or more rooms in your home, or if you own a rental property, there are many expenses that can be deducted in calculating your net rental income.

Free Tax Preparation Service - Community Volunteer Income Tax Program

This free tax service is available for those with modest incomes - $35,000 for an individual, $45,000 for a couple (add $2,500 for each dependant), as long as the tax situation is relatively simple.

COVID-19 Resources

We've assembled a page of resources including links to government and financial institution information, as well as Video Tax News information re COVID-19 measures. Information on student loans, income support for workers, and business supports.

Manitoba 2020 Budget - March 19, 2020

Retail Sales Tax rate reduced to 6% July 1, 2020, other RST rate reductions; Green Levy effective July 1, 2020, to replace federal carbon tax; probate fees eliminated July 1, 2020.

Tax Return Deadline Extended re COVID-19

The 2019 tax deadline is extended to June 1, and tax balances and instalments may be deferred till after Aug 31 without interest or penalties. Support has been announced for small businesses, employees, self-employed, etc.

Quebec 2020 Budget - March 10, 2020

The refundable tax credit for caregivers will be enhanced and made more accessible.  There are many measures concerning businesses, but no change in personal or corporate income tax rates or dividend tax credit rates.

Change in Use of Property - Deemed Disposition

If a property such as a principal residence has changed in use from personal use to income-producing (or vice-versa), there is a deemed disposition. Fair market value must be determined, and special rules apply for the depreciable portion of the property.

Tax Issues re Investing, and Tax Treatment of Different Types of Investments

In kind (securities) transfers are not on your T5008 and Trading Summary; Reporting foreign transactions and holdings; Trade date vs settlement date and much more!

Yukon 2020 Budget - March 5, 2020

The Yukon small business corporate income tax rate will be reduced to zero effective Jan 1, 2021.  Yukon's basic personal amount tax credit will mirror the changes to the federal basic personal amount.

US Federal Estate Tax May be Payable by Canadians

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, a US federal estate tax return must be filed. Read the article, and try out our calculator.

US Federal Estate Tax Calculator for Canadians

Our US Estate Tax Calculator has been updated to include the 2020 tax year.

February 2020

Alberta 2020 Budget - February 27, 2020

There were no new tax changes announced.  Corporate general income tax rate reductions were previously announced.  The target is to have a small budgetary surplus by the 2022-23 fiscal year.

Life in the Tax Lane March

This month's video discusses: 
 - T1 Season - What's New
 - U.S. - New Disclosure Requirements for Crypto Activities
 - Vehicle Logs/Apps
 - Tenant Relocation Assistance - Taxable?
 - Starting a Business While Collecting EI
 - In-Kind Contributions to an NPO

Nunavut 2020 Budget - February 26, 2020

There were no tax changes announced.

Nova Scotia 2020 Budget - February 25, 2020

No personal tax changes were announced. Corporate tax rates to be reduced: general to 14%, small business to 2.5%. Vaping products to be taxed, tobacco taxes increase.  Digital media and digital animation tax credits will be extended.

Northwest Territories 2020 Budget - February 25, 2020

No new taxes were announced.

What Happens to Debts of a Deceased Person?

If that debt is a tax debt, it can be recovered by CRA from named beneficiaries of registered plans, or from others to whom the deceased transferred property prior to death.

Income Splitting

There are several ways of splitting income, either with a spouse or child.  Some methods of splitting income with a spouse are done only on the tax return, such as pension splitting.

Eligible Dependent / Equivalent to Spouse Tax Credit

Are you a single parent? Or, are you supporting a parent or other dependent relative? The equivalent to spouse tax credit may be available.

BC 2020 Marginal Income Tax Rates

Our tax rate tables have been revised to include the new BC top tax rate of 20.5%.  This results in a combined federal/BC top tax rate of 53.5% for taxable income over $220,000.

BC 2020 Budget February 18, 2020

The budget introduces a new top personal tax rate of 20.5%, as well as PST on carbonated beverages and streaming services such as Netflix and Amazon Prime.  A new BC Access Grant for students is also introduced.  Carbon tax rate increases for 2020 and 2021 are detailed.

Students - Tax Information, Savings Plans, Financial Help

Learn about tax deductions and credits, private school costs, RESPs, student grants and loans, and help with tax preparation.

Are Your Tax Credits Changing for 2020?

Turning 65 this year? Other tax credits changing? Complete a new TD1 form to give to your employer.  Your TD1 form determines your tax withholdings. Working part time = maybe no tax withholdings.

RRSP Deadline Monday March 2nd

The deadline for 2019 contributions to an RRSP is Monday, March 2nd - don't wait till the last minute!

Have you Sold Your Principal Residence?

This sale MUST be reported on the tax return, even if it is 100% eligible for the principal residence exemption.  When there is more than one owner, each will report their share of the sale.

2020 Sales Tax Rates - GST/HST, PST, RST, QST

There are no sales tax rate changes thus far for 2020.

2020 Corporate Income Tax Rates

The general corporate tax rates have been reduced for 2020 in Alberta and Quebec, and the small business tax rate has been reduced in Ontario, Quebec and Prince Edward Island.

2020 Marginal Tax Rate Tables

The 2020 tax rate tables have been updated to include the effect of the federal enhanced basic personal amount.

Enhanced Canada Pension Plan (CPP)

Are you confused about the 2019 changes to the CPP? The contributions are separated into 2 parts for the tax return. The original 4.95% CPP is used for a tax credit as usual, and the additional contribution for enhanced CPP is allowed as a deduction from income.

Unclaimed Money - Is Some of it Yours?

The Bank of Canada holds about $888 million of unclaimed balances, and the BC Unclaimed Property Society holds over $159 million. There are separate Alberta and Quebec unclaimed property registries.

January 2020

Automobiles, Passenger Vehicles and Motor Vehicles - Tax Issues

Deductible expenses, need for a trip log (CRA has a car expense project), expense limitations, auto taxable benefits, and GST/HST input tax credits on vehicle allowances.

Why You Should File a Tax Return

There may be circumstances that require you to file a tax return, including the sale of your principal residence.  You should file a tax return even if you have little or no income, to receive refundable tax credits, GST/HST credit, and to establish eligibility for other government programs and services.

Filing Your Tax Return - Income, Deductions, Tax Credits

We have many articles on filing your tax return and how this can be done, as well as articles about different types of taxable income, deductions and tax credits, and many other topics.  Make sure you take advantage of available tax credits!

Life in the Tax Lane February

This month's video discusses: 
 - Joint Tenancy - Cautions
 - Executor Personal Liability
 - Condo Pre-Sale - GST/HST Issues
 - Home Accessibility Tax Credit
 - Tax Promoter Schemes
 - Negligence - Erroneous Donation Claims

Federal 2020 Pre-Budget Consultations 

Surveys are available to be completed on the Your Budget website, and you can share your ideas via email.

Ontario Estate Administration Tax Eliminated for Estates up to $50,000

As per the Ontario 2019 budget, estate administration fees are now zero for estates of $50,000 or less.

Hoping To Be a Business Owner?

Are you an aspiring entrepreneur?  Should you start your own business, or buy the shares or assets of an existing one? Check out advantages and disadvantages.

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

You can do an in kind transfer of shares from a non-registered account to a registered account such as an RRSP.  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.

Provincial 2020 Budget Consultations

Give your ideas! Ontario budget consultations end February 11, 2020.  Manitoba will end January 31, so give your input now.

RRSP/RRIF Withdrawal Calculator

Use our calculator to calculate your 2020 minimum annual withdrawal, and to estimate your earnings and withdrawals for the next 40 years. Works for non-registered also!

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

2019 was a great year for stocks! See returns for 1/5/10/20/40/50 & 70 years, and the growth of $1,000 invested. Over the past 10 years one would be losing money after inflation by investing in Canadian 3-month T-bills or Canadian government 1-3 year bonds.

Investment Return Calculator

Use our investment return calculator to determine your returns for 2019 or any time period for a particular investment or investment account, or your entire portfolio.

Joint Ownership of Assets

Assets are sometimes put into joint ownership with right of survival in order to minimize probate fees.  A recent court case highlights why this is sometimes a very bad idea!

Reporting Foreign Income and Expenses on the Tax Return

All income and expenses must be reported on your tax return in Canadian dollars, converted either at the transaction date exchange rate, or the average exchange rate for the year.  The average US exchange rate for 2019 is 1.3269, which can be used for dividends, but not for purchases and sales.

See also Prior Years:

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: October 28, 2020

Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved.  See Reproduction of information from TaxTips.ca

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