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What's New by Month
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: February 26, 2021