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What's New by Month
April 2021
BC 2021 Budget - April 20, 2021
PST exemption electric bicycles;
Free public transit children 12 and under;
Emergency Benefit for Workers expanded to self-employed;
No personal or corporate income tax changes.
Federal 2021 Budget - April 19, 2021
No projected end to deficits;
Increase for OAS pensioners age 75+;
Extensions to CRB and CRCB;
Increases
to Canada Workers Benefit;
Disability tax credit eligibility changes;
COVID-19
benefit tax changes;
COVID-19 business supports extended;
New Canada Recovery
Hiring Program;
Immediate expensing of some capital assets for CCPCs;
New tax
on luxury goods;
GST New Housing Rebate changes;
and more!
Superficial Losses on Sale of Shares or Other Capital Property
The loss on the sale of shares can be disallowed if shares were purchased in the period 30 days prior to or 30 days after the date of sale.
Quebec Tax Return/Payment Deadline Extended to May 31st
Although Quebec has extended the due date for tax returns, federal tax returns still have a due date of April 30th.
There are tax consequences if a principal residence or cottage is rented out, or if a rental property becomes a principal residence or personal-use property.
Service Canada Retirement Income Calculator
We've determined a work-around for this calculator's problem of not allowing input of the monthly CPP/QPP income in some circumstances.
Generally, the tax credit for the first $200 of donations is at the lowest tax rate, and the remainder at the highest tax rate, but there are some exceptions to this. Donations to a U.S. charity might also be eligible for the tax credit.
Capital gains on the sale of Qualified Small Business Corporation (QBC) shares or Qualified Farming or Fishing Property can be reduced or eliminated by the up to $1 million exemption.
What Investments Can Be Held in a Registered Plan?
Many investments are "qualified" investments for registered plans, but some are non-qualified, or even prohibited. The plan holder/beneficiary could be penalized for holding these investments.
BC 100% PST Rebate for Certain Capital Assets
This rebate is available for certain asset purchases made by a corporation from Sep 17, 2020 to Sep 30, 2021.
Manitoba 2021 Budget - April 7, 2021
No personal or corporate income tax rate changes; New Teaching Expense Tax credit and Education Property Tax Rebate; RST changes; Business - health/education tax levy changes; Revisions to Interactive Digital Media Tax Credit and Small Business Venture Capital Tax Credit.
Saskatchewan 2021 Budget - April 6, 2021
Active Families Benefit restarted; Home Renovation Tax Credit; Small Business corporate tax rate to be increased 2022 and 2023; Non-eligible dividend tax credit reduced for 2021; Road use fee electric vehicles; changes to sales tax and education property tax.
What Kinds of Income are Not Taxable?
Some non-taxable income is not reported on tax returns. Some must be reported and later deducted, affecting some tax credits, clawbacks, and income-tested benefits.
March 2021
Disability Tax Credit (DTC) Promoters Restrictions Act
This Act will come into force on November 15, 2021. Revised regulations coming soon, may still cap fees at $100 for DTC requests.
2020 Recipients of COVID-19 Relief Benefits - Due Date for Tax Payment
Tax returns must still be filed by April 30th, but some (NOT ALL) taxpayers who received COVID relief benefits will not be required to pay interest on outstanding tax debt for the 2020 tax year until April 30, 2022.
Canada Emergency Business Account (CEBA)
The deadline for applications for a $60,000 CEBA loan or the $20,000 expansion is now June 30, 2021. Apply online with your financial institution.
Life in the Tax Lane April 2021
- CERS/CEWS update
- CRA online Security
- Wedding costs - business expense?
- Rental properties - repair expense
- Income vs capital gains - stocks
- Taxpayer relief - financial hardship
Accommodations and parking are sometimes included as eligible medical expenses, as is cannabis. Check the list of eligible expenses.
If your business is incorporated, you must file a separate corporate income tax return. If not, the business income is included on specific forms in your personal income tax return. A professional accountant can help to ensure that you claim all allowable expenses.
Capital or Expense - Rental Property / Business Assets
Should a cost be capitalized or expensed? There are general guidelines that can be followed to determine the answer. This article also deals with expense and capital items that are used both for business and personal use.
Withdrawals For Home Buyer's Plan (HBP) or Lifelong Learning Plan (LLP)
Withdrawals from your RRSP from Jan 1 to Dec 31, 2020 for the HBP or LLP will be on a 2020 T4RSP, and must be reported on Schedule 7 of your 2020 tax return, even though they don't affect your income.
Repayments to Home Buyer's Plan (HBP) or Lifelong Learning Plan (LLP)
If you made repayments to your RRSP for the HBP or LLP from Mar 3/20 to Mar 1/21, make sure you report them properly on your 2020 tax return in order to not lose RRSP contribution/deduction room.
Do you have a worthless investment? Can't sell shares because they've been delisted? There may be a way to claim the capital loss.
Tax Treatment of Income From Shares in Corporations
Canadian vs foreign investments; What the Income Tax Act says about the exchange rate; Trade date vs settlement date; Superficial losses; Transfer capital losses to a spouse.
A deduction may be available for tools purchased in order to earn employment income as a tradesperson (e.g. hairdresser, cook, plumber, electrician, mechanic, apprentice tradesperson, etc.). Let our calculator help with the calculation.
Quebec 2021 Budget - March 25, 2021
Tax credit for seniors' home support services enhanced; Small business tax rate reduced; non-eligible dividend tax credit rate reduced; many other measures.
Nova Scotia 2021 Budget - March 25, 2021
No tax measures were announced other than the 10-year extension of the Equity Tax Credit for investments in Community Economic Development Investment Funds (CEDIFs).
Ontario 2021 Budget - March 24, 2021
20% increase to 2021 CARE credit; Refundable jobs training tax credit 2021 only; Employee Health Tax (EHT) exemption increase made permanent, threshold amount for instalments doubled; and more.
Should You Borrow to Contribute to RRSPs?
Let our article and our calculator help you with this decision. However, if you have never invested, don't start by borrowing for your RRSP!
The 2021 Budget will be tabled on Monday, April 19, 2021.
This calculator may help you decide between contributing to TFSAs or RRSPs. If you're in the lowest tax bracket (federally up to $49,020 in 2021), use TFSAs first!
Recording Foreign Transactions
If you have purchased an investment in a non-registered account, it is your responsibility to keep records which will allow you to calculate the adjusted cost base (ACB) of that investment, in Canadian dollars, even for investments held in US$. Your brokerage statements will not provide the Cdn$ ACB for investments held in US$.
Refundable Medical Expense Supplement
If you have employment or self-employment income exceeding $3,714 in 2020, have claimed a disability supports deduction or medical expenses and have family net income less than $53,604, you may be able to claim a refundable amount of up to $1,272.
Filing With a Spouse / Marital Status
Joint investment income; tax credits and deductions; how to report your marital status and when to update CRA on a change in your marital status.
New Brunswick 2021 Budget - March 16, 2021
No personal or corporate tax changes were announced. Carbon tax increases to $40 per tonne from $30 effective April 1, 2021.
RRSP Excess Contributions - You Are Responsible
Each taxpayer is responsible for overcontributions to their RRSP - not their accountant or financial planner. Your notice of assessment will show your contribution limit. If this is negative, you likely have an excess contribution which will result in a costly tax.
Prince Edward Island 2021 Budget - March 12, 2021
Tax measures effective Jan 1, 2022: Personal exemption increases to $11,250; Low-income tax reduction threshold increases to $20,000; Small business tax rate reduced to 1%.
T4A Tax Slip Errors re COVID Benefits
If you feel there is an error on your T4A for CERB or other COVID benefits you should contact CRA as soon as possible. Make sure you file your return on time!
Expenses of a 40km+ move to attend post-secondary school may be deducted against taxable scholarship or award income or from employment income earned while at school. The move home might be deductible from employment income earned there, if conditions are met.
Yukon 2021 Budget - March 4, 2021
There were no new tax measures announced in the Yukon 2021 budget.
Canada Emergency Wage Subsidy (CEWS) Mar 14 to Jun 5
The subsidy will continue with the current structure, with maximum 75% subsidy for active employees. Subsidy structure for furloughed employees will also continue unchanged.
Canada Emergency Rent Subsidy (CERS) Mar 14 to Jun 5
The subsidy will continue with the current structure, with maximum 90% subsidy for businesses locked down due to COVID, and maximum 65% for other businesses.
February 2021
Life in the Tax Lane March 2021
- COVID-19 Benefit Recipients - Interest Relief
- CERB Issues
- Capital Gains Inclusion Rate Changes
- Potential U.S. Tax Changes
- Registered Disability Savings Plans - Letter Campaign
Alberta 2021-22 Budget February 25, 2021
There were no personal or corporate tax changes in the Alberta budget. COVID-19 recovery spending continues; tourism levy abatement continues, property tax reductions oil/gas properties.
RRSP Contribution Deadline March 1, 2021
If you received COVID benefits with little or no tax withheld in 2020, you'll probably have tax owing, which could be reduced by an RRSP contribution.
Nunavut 2021-2022 Budget - February 22, 2021
Nunavut tabled their 2021 Budget, with no tax changes announced.
So far, we only know the dates for upcoming 2021 budgets for 3 provinces: Alberta on Feb 25th, Saskatchewan April 6th and BC April 20th.
Prescribed Interest Rate Remains at 1%
The prescribed rate for 2021 Q2 starting April 1st will remain at 1%, for spousal loans as well as for shareholder and employee loans.
New 2020 T4 Codes Required for ALL Employers
All employers are required to provide data for 4 new codes on the 2020 T4, for employment income paid from Mar 15 to Sep 26, 2020. T4 due date this year is Mar 1/21.
BC PST - New Registration Requirements
Effective April 1, 2021 there are new registration requirements for businesses located outside of BC.
Self-employed individuals who received CERB and would have qualified based on gross income will not be required to repay the benefit if they met all other eligibility requirements.
2021 Corporate Income Tax Rates
The small business corporate income tax rate has been reduced for 2021 in Northwest Territories, Prince Edward Island, Quebec, and Yukon.
Northwest Territories 2021 Budget February 4, 2021
The NT budget includes a reduction of the small business corporate tax rate to 2% from 4%, increases to carbon tax, property tax rates and some fees, and increased Cost of Living Offset.
Working From Home - Internet Access Fees
CRA has modified Guide T4044 to add that starting in 2020, reasonable monthly home internet access fees can be an eligible work-space-in-home expense for employees.
Investment Return Calculator - How did your Investments do in 2020?
Calculate your returns for an investment, investment account, or entire portfolio, for any period. New print function added.
CERB Class Action Lawsuit Re Net vs. Gross Income Requirement
A proposed class action lawsuit has been filed in Federal Court against the federal government on behalf of self-employed pensioners, although if it is successful it may affect all self-employed people affected by this issue.
Life in the Tax Lane February has an additional link to information on the new refundable Canada Training Credit, available for 2020 tax returns.
Prepare Ahead For Your Tax Return
See our checklist of items to have on hand prior to preparing your own tax return or taking information to a professional tax preparer.
CPP, OAS and EI Tax Slips Online
This year your CPP OAS and EI tax slips will be available in your My Service Canada Account as early as February 1st.
Donation Tax Credit Rates 2020/2021
The only change to donation tax credit rates for 2020 was the higher BC tax rate of 20.5% for donations over $200 to the extent that income is taxed at this rate. 2021 tax credit rates remain unchanged, but budgets could change that.
January 2021
Life In the Tax Lane February 2021
- Canada Training Credit
- T4 Summary - 10% Temporary Wage Subsidy
- Correcting Form PD27 Submissions
- Electronic Signatures
- Relief Payments from Foreign Governments
- U.S. and U.K. Corporate Beneficial Ownership Disclosure
Provincial Budget Consultations
Budget 2021 consultations are underway for a few provinces - earliest closing date is next week.
CRA and Tax Templates Inc. calculators are available up to period 13 ending Mar 13/21. Video Tax News/Punchard Systems CEWS Estimator is also available up to period 13 - easy to use, excellent for planning.
Both NETFILE and EFILE will be available starting Monday, February 22, 2021, for filing 2020 and earlier tax returns. Make sure you have all your tax slips before filing!
Transfer Shares to a Registered Account, But Not at a Loss!
You can make your RRSP contribution with an in kind transfer of shares. However, if you transfer shares on which there is a loss, the loss will not be deductible. If you transfer shares on which there is a gain, you will have a taxable capital gain.
For 2020 and 2021, "earned income" will include COVID relief payments for which you receive a T4A or T4E, as well as EI benefits and QPIP benefits.
Federal 2021 Budget - Pre-Budget Consultations - Have Your Say!
 | Consultations end February 19, 2021 |
| Complete the questionnaire (at least 5 minutes), or |
| Upload a submission |
| View ministerial roundtables |
How much can be earned in Canadian dividends (when there is no other income) before regular income taxes are payable, and before alternative minimum tax applies?
Highly Affected Sectors Credit Availability Program (HASCAP)
Business loans @ fixed 4% interest rate with flexible terms of up to 10 years with up to a 1 year postponement on repayments at start of loan, guaranteed by Canada.
Due to the COVID-19 pandemic, there will be no revocations of farm status for the 2021 assessment roll. For future reference: There is no deadline for achieving gross annual value requirements for a developing farm, despite the "projected" date for doing this.
Basic Tax Calculator for 2021 and Earlier Years
Shows taxes payable, average and marginal tax rates for all provinces for employment/other income, capital gains, eligible and non-eligible Canadian dividends. Compare 6 years of taxes payable by province.
Investment Income Tax Calculators - All Provinces
See the big difference in taxes payable on different types of investment income. Print a 1 page summary of results with no ads, in colour.
2020/2021 Canadian Tax and RRSP Savings Calculator
This detailed calculator now includes political contribution tax credits. Check your 2020 tax return, do your 2021 tax planning!
Working From Home Expenses Calculators
Both CRA and Revenue Quebec have calculators to help you determine the best method to use for claiming home office expenses.
Bitcoin and Barter Transactions
These can result in taxable income, and in sales taxes collectible/payable. Gain on Bitcoin is also taxable.
When is CEWS Included in Income?
Both CEWS and the Canada Emergency Rent Subsidy (CERS) are included in taxable income immediately before the end of the qualifying period to which they relate. If not done, tax return amendments will be needed.
Disability Insurance Premiums Paid by a Business
These premiums are not deductible by a sole proprietor. They are deductible by an employer as wages expense, but are included as a taxable benefit to the employee.
CEWS Periods and Application Deadlines
The deadline for periods 1 to 5 (ending Aug 1/20) wage subsidy applications is Jan 31/21. See our article for when CEWS is included in income.
Web Forms will be available for employers to file up to 100 T4 slips starting Jan 11/21. Don't forget about the extra codes for 2020.
RRSP/RRIF Withdrawal Calculator
Use our calculator to determine your 2021 minimum annual withdrawal, and to estimate your earnings and withdrawals for the next 40 years. Works for non-registered also!
Historical Returns on Investments - Stocks, Bonds, T-Bills
2020 was a good year for stocks. See returns for 1/5/10/20/41/50 & 71 years, and the growth of $1,000 invested. Over the past 10 years one would be losing money after inflation by investing in Canadian 3-month T-bills or Canadian government 1-3 year bonds.
Use our calculator to determine your returns for 2020 or any time period for a particular investment or investment account, or your entire portfolio.
Reporting Foreign Income and Expenses on the Tax Return
All income and expenses must be reported on your tax return in Canadian dollars. The average US exchange rate for 2020 is 1.3415, which can be used for dividends, but not for purchases and sales.
See also Prior Years:
Revised: April 22, 2021