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Post-secondary students in Canada are eligible for a range of tax credits and deductions, including a tuition tax credit, deductions for moving expenses, and a claim for qualifying student loan intere...
The Canada Revenue Agency (CRA) has announced that a new temporary home office tax credit may be claimable by qualifying individuals who worked from home during 2020. Taxpayers are eligible to use thi...
The Canada Revenue Agency (CRA) permits taxpayers to designate another person, firm, or business to communicate with the CRA on the taxpayer’s behalf, where a written authorization has been provided...
Taxpayers may apply to the Minister of National Revenue for administrative relief from interest and penalty charges imposed or, in some cases, for permission to late-file tax elections. In order to be...
In its regularly scheduled interest rate announcement made on December 9, the Bank of Canada announced that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 0.5...
The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment declined by 0.4% during the month of November. The unemployment rate for the month was 8.5%. Fu...
The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
On November 30, the Minister of Finance released the Fall Economic Statement, which included updated deficit projections for the current and future fiscal years. The deficit is now projected to reach ...
The federal government has announced that the program providing a wage subsidy to eligible businesses experiencing a pandemic-related revenue loss has been extended to be available until June 2021. Th...
The federal government has announced that its Fall Economic Statement for the 2020-21 fiscal year will be released on Monday November 30, 2020. The press release announcing the date and time of the St...
The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate of inflation for the month of October rose by 0.7%, as measured on a year-over-year basis. The comparable inc...
The federal government has released the premium rates and amounts which will apply in 2021 for purposes of the Employment Insurance (EI) program. For 2021, the EI premium rate will be 1.58% and maximu...
The Canada Revenue Agency (CRA) has announced upcoming changes in the allowable contribution limits for a range of retirement savings programs. For registered pension plans, the 2021 money purchase l...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall rate of unemployment stood at 8.9% for the month of October. While the unemployment rate for the month was l...
The tax treatment of non-monetary benefits provided by employers to their employees can vary widely. Some such benefits must be included in the employee’s taxable income for the year, while others a...
The Canada Revenue Agency (CRA) has announced the contribution rates and amounts which will apply for purposes of the Canada Pension Plan during 2021. For 2021, the employer and employee contribution ...
The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
In its October 28 announcement, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate remains at 0.5%. The press release announcing...
The Bank of Canada has released its schedule for policy interest rate announcements to be made during the 2021 calendar year, and that schedule is as follows: Wednesday, January 20 Wednesday, March 10...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation rose 0.5% on a year-over-year basis in September, up from a 0.1% increase in August. While pric...
In September, the Canada Emergency Response Benefit program came to an end, and three new programs to provide financial assistance to individuals impacted by the pandemic were launched. One of those p...
The most recent release of Statistics Canada’s Labour Force Survey shows that Canada’s overall unemployment rate declined by 1.2% during the month of September. For the month, that rate stood at 9...
The federal government has created three separate benefits which can be claimed by qualifying Canadians, following the end of the Canada Emergency Response Benefit (CERB) program. Applications for two...
The Canada Revenue Agency (CRA) has issued a warning to taxpayers with respect to a tax scam currently operating, which involves claims for bad debt write-offs. While bad debts can be written off for ...
The federal government has created three separate benefits which can be claimed by qualifying Canadians, following the end of the Canada Emergency Response Benefit (CERB) program. Applications for two...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for 2020, as well as the rates that will apply for the purpose of calculating employ...
The Old Age Security benefit received by Canadians over the age of 65 is indexed quarterly to changes in the Consumer Price Index. The federal government has announced that the basic OAS benefit of $6...
The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
As part of its pandemic relief plan, the federal government provided eligible post-secondary students and recent post-secondary and high school graduates who were unable to find work for pandemic-rela...
Canadian taxpayers who pay income tax by instalment usually make four instalment payments each year, by the 15th day of March, June, September, and December. Earlier this year, the federal government ...
Earlier this year, the Canada Revenue Agency (CRA) announced that the deadline for payment of individual income tax balances for the 2019 tax year, which is usually April 30, was being extended to Wed...
The September release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of August stood at 10.2%. That rate represented a decrease of 0.7% from the ra...
The federal government has announced an increase in the amount of any overtime meal allowance, or meal portion of a travel allowance, that employers can provide to employees on a non-taxable basis. Th...
Eligibility for a number of refundable tax credits and benefits, including the harmonized sales tax/goods and services tax credit and the child tax benefit is based in part on a taxpayer’s income fo...
The pandemic emergency benefit program provided by the federal government for post-secondary students and recent secondary and post-secondary graduates ended on August 29, 2020. Those eligible for suc...
Since March 15 of this year, Canadians who have lost income as a result of the pandemic have been able to receive $500 per week from the Canada Emergency Response Benefit (CERB). The CERB program will...
Earlier this month, a cyberattack on the Canada Revenue Agency (CRA) and other agencies of the federal government compromised the personal tax and financial information of approximately 5500 taxpayers...
On July 17, the federal government announced that the existing Canada Employer Wage Subsidy (CEWS) program would be extended to be available until November 21, 2020, and that eligibility criteria for ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of July, as measured on a year-over-year basis, stood at 0.1%. The comparable rate ...
The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for July was 10.9%. The change means that the unemployment rate has fallen by 1.4 percentage poi...
Individual taxpayers who pay income tax by instalment are required to make four such instalment payments each year. The usual deadlines for such payments are the 15th day of March, June, September, an...
The Canada Revenue Agency (CRA) has posted a notice on its website indicating that it is experiencing delays in the processing of paper-filed individual income tax returns for the 2019 taxation year. ...
The Canada Revenue Agency (CRA) has announced that an interest waiver period will be provided to individual taxpayers with respect to income taxes owed. That waiver period will run from April 1 to Sep...
Earlier this year, the deadline for payment of individual income tax amounts owed for the 2019 taxation year was extended from April 30 to September 1, 2020. The federal government has now indicated t...
In its regularly scheduled interest rate announcement made on July 15, the Bank of Canada indicated that, in its view, no change to current interest rates was required. Accordingly, the Bank Rate rema...
The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Canadian employers whose businesses have been affected by the pandemic may be eligible for a federal government wage subsidy – the Canada Emergency Wage Subsidy (CEWS). The CEWS, which pays the empl...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight decline in the rate of unemployment during the month of June. The unemployment rate for June stood at 12.3%, a decli...
On July 8, the federal government provided an update of its fiscal position for the current (2020-21) fiscal year, taking in account expenditures made in connection with the pandemic. That “Economic...
Earlier this year, the federal government announced that, as part of its pandemic relief measures, recipients of Old Age Security would receive an additional one-time payment. Such payment is intended...
The Canada Revenue Agency (CRA) has issued a Tax Tip reminding Canadians that its online filing services for the filing of individual income tax returns for the 2019 tax year are still open. Such indi...
The Old Age Security benefit received by Canadians over the age of 65 is indexed quarterly to changes in the Consumer Price Index. The federal government has announced that, as the rate of inflation d...
The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first three quarters of 2020, as well as the rates that will apply for the p...
The federal government has announced that the Canada Emergency Response Benefit (CERB) program has been extended to be available for a further eight weeks in some circumstances. As originally designed...
The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate of inflation fell by 0.4% during the month of May, as measured on a year-over-year basis. Prices were up in f...
The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate rose slightly during the month of May, from 13% to 13.7%. The StatsCan analysis indicates that une...
In its regularly scheduled interest rate announcement made on June 3 the Bank of Canada, as anticipated. made no change to current rates. Accordingly, the Bank Rate remains at 0.5%. In its announcemen...
Self-employed Canadians and their spouses must file an individual income tax return for the 2019 tax year on or before June 15, 2020. As part of the federal government’s pandemic response plan, howe...
Individual Canadians who pay income tax by instalments would normally be required to make the second instalment payment for this year on June 15, 2020. The Canada Revenue Agency (CRA) has indicated, h...
The Canada Revenue Agency (CRA) has announced that the deadline for filing of T2 returns by corporations and T3 returns by trusts has been extended. That announcement provides that all businesses and ...
Each year community organizations across Canada operate a number of tax clinics at which individual income tax returns are prepared and filed free of charge to the taxpayer. Due to concerns surroundin...
The benefit year for many federal benefits, like the Canada Child Benefit and the Goods and Services Tax Credit runs from July 1 to June 30. Eligibility for and the amount of such benefits are based, ...
The Canada Revenue Agency has issued a reminder to Canadians that there are circumstances in which the Canada Emergency Response Benefit (CERB) must be repaid. In particular, individuals who return to...
The federal government has announced that, in order to help seniors with additional costs resulting from the pandemic, a one-time supplement will be provided to Canadians who already receive Old Age S...
The Canada Revenue Agency (CRA) has issued an alert on its website warning Canadians of a scam operating with respect to the Canada Emergency Response Benefit (CERB). That Benefit, for which more than...
As part of its pandemic response, the federal government is providing eligible employers with a partial wage subsidy through the Canada Emergency Wage Subsidy (CEWS) program. The CEWS program provides...
The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2020, as well as the rates that will apply for the purpose ...
The April release of Statistics Canada’s Consumer Price Index shows a sharp decline in the rate of inflation for the month of March. That rate stood at 0.9%, as measured on a year-over-year basis. T...
The most recent release of Statistics Canada’s Labour Force Survey shows a significant increase in the rate of unemployment during the month of March. The April release of the Labour Force Survey, w...
The federal government has announced that required repayments of Canada Student Loans will be suspended until September 30th, 2020. Where payments are usually made by pre-authorized debit, such paymen...
In its regularly scheduled interest rate announcement made on April 15, the Bank of Canada indicated that, in its view, no change to current interest rates was required. Accordingly, the Bank Rate rem...
The federal government will be providing a wage subsidy program to eligible employers who have experienced a recent reduction in revenues of 30% or more. That program—the Canada Emergency Wage Subsi...
As of April 6, 2020, Canadians can apply for the federal Canada Emergency Response Benefit (CERB), which provides eligible individuals with $500 per week for a maximum of 16 weeks. The benefit is gene...
The federal government will be providing businesses with an extension with respect to remittance deadlines related to goods and services tax (GST) and harmonized sales tax (HST). The deferral will app...
In an unscheduled announcement made on March 27, the Bank of Canada lowered interest rates for the third time this month. In that announcement, the Bank reduced current rates by one-half percentage po...
The federal government has announced that, for the current benefit year only, the amount of Canada Child Benefit will be increased by a one-time payment of $300 per child. The $300 additional benefit ...
The deadline for filing of most 2019 individual income tax returns, as well as payment of any balance of tax owed for the 2019 taxation year by individual taxpayers would usually be April 30, 2020. Th...
Citing the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent drop in oil prices, the Bank of Canada has announced a further reduction in interest rates. The unsch...
The federal government has announced that the filing deadline for individual Canadian tax filers who would usually be required to file by April 30 has been extended to June 1, 2020. (Returns for 2019 ...
Canadian taxpayers who buy or sell a property during the year may be subject to requirements to report that transaction on their annual return and, in some cases, to pay tax on sale proceeds. The CRA ...
The most recent release of Statistics Canada’s Labour Force Survey shows little change in the overall unemployment rate during the month of February. That rate rose by 0.1%, to 5.6%. During the mont...
The Canada Revenue Agency’s individual income tax enquiries telephone service will be available for extended hours during tax filing season. That enquiries service, which can be reached at 1-800-959...
In its regularly scheduled interest rate announcement made on March 4 the Bank of Canada indicated that, in its view, a reduction to current interest rates was required. Accordingly, the bank rate was...
The Canada Revenue Agency (CRA) has released its 2019 Guide to Self-Employed Business, Professional, Commission, Farming and Fishing Income for 2019. That Guide is used by taxpayers who are reporting ...
The Canada Revenue Agency’s NETFILE service for the filing of individual income tax returns for the 2019 taxation year is now available. The current NETFILE service, which can be found on the CRA we...
The Canada Revenue Agency (CRA) has announced that contributions to a registered retirement savings plan (RRSP), in order to be deducted on the return for 2019, must be made on or before Monday March ...
The most recent release of Statistics Canada’s Consumer Price Index shows an increase in the rate of inflation for the month of January. That rate stood at 2.4%, as measured on a year-over-year basi...
The most recent release of Statistics Canada’s Labour Force Survey shows that that unemployment rate dropped slightly during the month of January, from 5.6% to 5.5%. During that month, employment in...
The rates and limits for deduction and credit claims for meal and travel expenses are now posted on the Canada Revenue Agency (CRA) website. Such rates and limits apply to meal and travel expense clai...
In the 2019 Budget, the federal government introduced a new tax credit for digital news subscription costs incurred by individuals. That tax credit is available starting in the 2020 tax year. Individu...
In the 2019 Budget, the federal government introduced a new tax credit for digital news subscription costs incurred by individuals. That tax credit is available starting in the 2020 tax year. Individu...
The Canada Revenue Agency (CRA) publishes a guide for post-secondary students which outlines the rules governing typical tax situations for such students. Those rules include the tax treatment of tuit...
The Canada Revenue Agency (CRA) has announced that the NETFILE service for online filing of individual income tax returns for the 2019 tax year will be available beginning Monday, February 24, 2020. M...
The Canada Revenue Agency (CRA) has released the Individual Income Tax Return and Guide for all provinces and territories for the 2019 tax year, and those forms and guides are posted on its website at...
In its regularly scheduled interest rate announcement made on January 22, 2020, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remain...
The Canada Revenue Agency has announced the rates and limits which will apply for purposes of automobile-related benefits and deductions in 2020. Most such rates and limits are unchanged, as follows: ...
The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the first quarter (January 1 to March 31) of 2020. OAS payments are indexed quarterly to c...
The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 35,000 jobs during the month of December and that the overall unemployment rate fell by 0.3%, to...
The federal government has announced that the basic personal tax credit, the spousal credit, and the eligible dependant credit amounts will increase, in four stages, from $12,298 to $15,000. The first...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2020, as well as the rates that will apply for the purpose ...
The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
The federal government has announced the amounts which will be paid under the climate action incentive program during 2020. Such amounts are claimed when filing the individual income tax return for 20...
Taxpayers who have not yet filed their individual income tax returns for 2018 (or the three prior years) can file those returns on NETFILE until Friday, January 24, 2020. Until that date, the Canada R...
The 2019 Economic and Fiscal Update released on December 16 by the Minister of Finance shows a significant increase in the projected deficit for the current fiscal year. In the 2019-20 Budget announce...
Canadians who pay income tax by instalments are required to pay the fourth and final instalment payment of 2019 on or before Monday December 16, 2019. Taxpayers subject to the instalment payment requi...
Under the federal government’s Taxpayer Relief Program, the Minister of National Revenue can provide relief to taxpayers from interest or penalty charges which have been assessed. Such taxpayer reli...
In its regularly scheduled interest rate announcement made on December 4, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2...
The Canada Revenue Agency has announced that personal income tax brackets and credit amounts for the 2020 taxation year will increase by 1.9%. Each year, such individual income tax brackets and cred...
The most recent release of Statistics Canada’s Consumer Price Index indicates that there was no change in the rate of inflation recorded for the month of October. That rate stood at 1.9%, as measure...
The Canada Revenue Agency has issued the 2020 version of Guide T4127, Payroll Deduction Formulas, which is intended for use by payroll software providers or companies which develop their own in-house ...
On Wednesday November 27, the Canada Revenue Agency (CRA) will be hosting a webinar on payroll requirements for Canadian employers. The webinar, which will start at 1:00 p.m. EST, is free of charge fo...
The Canada Revenue Agency (CRA) has updated and re-issued its tax guide for post-secondary students. That guide (P105, Students and Income Tax) reviews the tax treatment of common deductions and credi...
The federal government has announced the Employment Insurance (EI) premium rates which will be levied during 2020. For 2020, maximum insurable earnings for the year will be $54,200. The premium rate f...
The most recent release of Statistics Canada’s Labour Force Survey shows that there was no change in the overall unemployment rate for the month of October 2019, with that rate remaining at 5.5%. Am...
The Canada Revenue Agency has issued its Employer’s Guide: Payroll Deductions and Remittances for 2020 (T4001(E)). That guide provides employers with information on the deductions which must be made...
The federal government has announced the contribution rates and amounts and maximum pensionable earnings which will apply for purposes of the Canada Pension Plan in 2020. Employee and employer contrib...
Employers are required, by the end of February 2020, to issue T4 slips for their employees for the 2019 taxation year. Those T4s will summarize the amount of remuneration received by the employee duri...
In its regularly scheduled interest rate announcement made on October 30, 2019, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate will r...
As previously announced, changes are to be made to the Canada Pension Plan over the next 5 years, with the goal of increasing the amount of CPP retirement benefits available to contributors. The next ...
The federal government provides a detailed online retirement income calculator which can be used by taxpayers planning retirement. The online calculator allows users to input income amounts from vario...
The overall inflation rate was unchanged for the month of September, with that rate matching the 1.9% year-over-year increase posted for the month of August 2019. The greatest contributor to the infla...
The most recent release of Statistics Canada’s Labour Force Survey shows a sharp increase in job creation for the month of September. During that month employment rose by 54,000, mainly in full-time...
The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
The federal government has announced the Employment Insurance premium rates and amounts which will be levied during the 2020 calendar year. For 2020, the Employment Insurance premium rate is decreased...
The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the fourth quarter (October 1 to December 31) of 2019. OAS payments are indexed quarterly ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for 2019, as well as the rates that will apply for the purpose of calculating emp...
The Canada Revenue Agency (CRA) has updated and re-issued its publication on the conduct of tax audits. The updated publication (RC4188E)) outlines the process by which the CRA chooses a file for audi...
The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August stood at 1.9%, as measured on a year-over-year basis. The inflation rate ...
Finance Canada has released the Annual Financial Report of the Government of Canada for 2018-19, which provides an overview of the federal government’s financial results for the 2018-19 fiscal year ...
Each September thousands of international students move to (or return to) Canada to attend Canadian secondary or post-secondary educational institutions. Depending on their residency status, those stu...
The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 81,000 positions during the month of August 2019. Notwithstanding that increase, the unemploymen...
In its regularly scheduled interest rate announcement made on September 4, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at ...
Individual taxpayers who make quarterly instalment payments of tax must make the third such instalment payment for the year on or before September 15. As that date falls on a Sunday this year, payment...
The Bank of Canada has released a listing of the eight dates on which it will make regularly scheduled interest rate announcements during 2020. That listing is as follows: Wednesday, January 22 Wednes...
The Canada Revenue Agency has issued a Tax Tip warning owners of self-directed RRSPs about a current tax scheme which they may encounter. Promoters of such schemes falsely promise owners of self-direc...
The Canada Revenue Agency has updated and re-issued its Information Circular outlining the rules and requirements which apply to taxpayers who keep business and tax books and records in electronic for...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation recorded for the month of July was unchanged from the previous month. For both June and July, tha...
The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, which includes the applicable rate for the upcoming month, as well as the rates in ...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight increase in the unemployment rate for the month of July, as measured on a year-over-year basis. For that month, the ...
The Canada Revenue Agency (CRA) has issued a Tax Tip reminding taxpayers of the procedures which it utilizes to protect their personal information, particularly with respect to contacts between taxpay...
Individuals who are required to pay income tax by instalments must make their third quarterly instalment for 2019 on or before September 15, 2019. As that date is a Sunday, such payments are considere...
The federal government provides tax relief to livestock producers who are experiencing severe weather or climate conditions during the year. Such relief is provided through the livestock tax deferral ...
The Bank of Canada has released the listing of dates on which it will make scheduled interest rate announcements during calendar year 2020. There will be 8 such scheduled interest rate announcements d...
Prospective mortgage borrowers in Canada are subject to a “stress test” as part of the assessment of their credit-worthiness. Under that test, such borrowers are required to qualify for a mortgage...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation during the month of June 2019 stood at 2%. The comparable rate for May was 2.4%. The decr...
The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
The most recent release of Statistics Canada’s Labour Force Survey shows that, although the unemployment rate for the month of June rose by 0.1%, employment increased by 132,000 positions during the...
In its regularly scheduled interest rate announcement made on July 10, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the bank rate remains at 2%. ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first three quarters of 2019, as well as the rates that will apply for th...
July 1, 2019 is the start of the 2019-20 benefit year for many provincial and federal child and tax benefits, including the federal GST/HST credit and the Canada Child Benefit. As of that date, the pa...
The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the third quarter (July 1 to September 30) of 2019. OAS payments are indexed quarterly to ...
The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July 2019. The prescribed rate for July is 2.75%. A chart showi...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of May 2019, as measured on a year-over-year basis, stood at 2.4%. Inflation during...
Under the Canadian tax system, employee stock options receive preferential tax treatment. In this year’s Budget the federal government indicated that, in its view, the existing rules on stock option...
In this year’s federal Budget, a new program was announced to benefit first-time home buyers. Under that program, the First-Time Home Buyer’s Incentive, the Canada Mortgage and Housing Corporation...
Effective as of July 2019, the amount of Canada Child Benefit (CCB) payable to eligible Canadian families will be increased to account for inflation. Starting with the July payment (which will be made...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate recorded for the month of May. The unemployment rate for that month stood at...
The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the month of June 2019. The prescribed rate for that month will be increase...
Individual taxpayers who pay income tax by instalments must make their second instalment payment for 2019 on or before June 17, 2019. Such taxpayers will have received an instalment notice setting out...
Self-employed taxpayers (and their spouses) have until Monday June 17, 2019 to file their income tax returns for the 2018 tax year. Returns filed after that date will be subject to late-filing penalti...
In its regularly scheduled interest rate announcement made on May 29, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Consequently, the Bank Rate remain...
The federal government and many of the provinces provide benefit programs for which both entitlement and benefit amount are based, at least in part, on the income of the recipient taxpayer. Those bene...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of April stood at 2%, as measured on a year-over-year basis. Seven of the eight maj...
The Canada Revenue Agency (CRA) has issued a Tax Tip confirming that the filing deadline for individual income tax returns filed for the 2018 tax year by self-employed individuals and their spouses is...
The most recent release of Statistics Canada’s Labour Force Survey shows growth in employment during the month of April for nearly all demographic groups. The overall unemployment rate for the month...
The Canada Revenue Agency (CRA) has issued a warning about a current tax scheme involving Health Spending Accounts (HSAs) which are being marketed to small businesses. HSAs are self-insured health pla...
The federal government has announced that, effective with the July 2019 payment, Canada Child Benefit rates will increase.As of July, the maximum benefit for a child under the age of 6 will increase t...
The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the month of May 2019. The prescribed rate for that month will be reduced t...
The Canada Revenue Agency (CRA) has issued a press release reminding taxpayers who have been affected by this spring’s floods of the availability of relief with respect to their obligation to file a...
The most recent release of Statistics Canada’s Consumer Price Index shows a significant increase in the rate of inflation recorded for the month of March 2019. During that month, the CPI rose 1.9%, ...
The Bank of Canada, in its regularly scheduled interest rate announcement made on April 24, determined that no change was needed to current rates. The Bank Rate therefore remains at 2%. The press rele...
The federal government has announced the Old Age Security payment rates which will be in effect for the second quarter (April 1 to June 30) of 2019. OAS payment rates are indexed quarterly to inflatio...
All payments of individual income tax owed for the 2018 taxation year must be received by the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2019. There are a number of means by which paym...
The Canada Revenue Agency (CRA) has issued an updated guide to be used by taxpayers who are claiming medical expenses on their income tax returns for 2018. Individual taxpayers are entitled to claim a...
The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change in the overall unemployment rate for the month of March. That rate remained at 5.8%. Employment ...
The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the month April 2019. The prescribed rate for the upcoming month is 3.1%. A chart...
The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2019, as well as the rates that will apply for the purpose of cal...
The Canada Revenue Agency (CRA) has posted a number of Tax Tips for seniors and students on its website. Those Tax Tips list and explain particular credits, deductions, or benefits which are most like...
The most recent release of Statistics Canada’s Consumer Price Survey indicates that the rate of inflation for the month of February, as measured on a year-over-year basis, stood at 1.5%. The compara...
Budget 2019 is proposing that the excise duty framework for cannabis products be amended to more effectively apply the excise duty on new classes of cannabis products, as well as to cannabis oils, whi...
Budget 2019 proposes to expand health-related tax relief under the Goods and Services Tax/Harmonized Sales Tax (GST/HST) system to better meet the health care needs of Canadians by: providing GST/HST ...
Budget 2019 announces the Government’s intent to limit the use of the current employee stock option tax regime and move toward aligning the tax treatment with the United States for employees of larg...
Budget 2019 proposes that the Canada Revenue Agency (CRA) will be allowed to send requirements for information electronically to a bank or credit union only if the bank or credit union notifies the CR...
Budget 2019 proposes that the joint and several liability for tax owing on income from carrying on a business in a TFSA be extended to the TFSA holder. The joint and several liability of a trustee of ...
Budget 2019 proposes to introduce a new rule that would deny a mutual fund trust a deduction in respect of the portion of an allocation made to a unitholder on a redemption of a unit of the mutual fun...
Budget 2019 proposes to prohibit Individual Pension Plans (IPPs) from providing retirement benefits in respect of past years of employment that were pensionable service under a defined benefit plan of...
To bring the Specified Multi-Employer Plan (SMEP) rules in line with the pension tax provisions that apply to other defined benefit RPPs, Budget 2019 proposes to amend the tax rules to prohibit contri...
Amounts paid for cannabis products may be eligible for the medical expense tax credit where such products are purchased for a patient for medical purposes in accordance with the Access to Cannabis for...
A recent court decision related to the interpretation of “national importance” has created uncertainty about the availability of these tax incentives. Budget 2019 proposes to introduce legislative...
Budget 2019 proposes to amend the Income Tax Act to clarify that financial assistance payments received by care providers under a kinship care program are neither taxable nor included in income for th...
Budget 2019 proposes to amend the Income Tax Act to clarify that an individual may be considered to be the parent of a child in their care for the purpose of the Canada Workers Benefit, regardless of ...
To ensure that the Registered Disability Savings Plan (RDSP) continues to respond to the needs of Canadians with disabilities, Budget 2019 proposes two changes that will better protect the long-term s...
Budget 2019 proposes to amend the tax rules to permit PRPPs and defined contribution RPPs to provide a variable payment life annuity (VPLA) to members directly from the plan. A VPLA will provide payme...
Budget 2019 proposes to amend the tax rules to permit an advanced life deferred annuity (ALDA) to be a qualifying annuity purchase, or a qualified investment, under certain registered plans. An ALDA w...
To improve the consistency of the tax treatment of owners of multi-unit residential properties in comparison to owners of single-unit residential properties, Budget 2019 proposes to allow a taxpayer t...
Budget 2019 proposes to increase the Home Buyers’ Plan (HBP) withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019. Budget 2019 also proposes to extend acces...
Budget 2019 proposes this new, non-taxable credit that would help Canadians pay for training fees. Every year, eligible workers between the ages of 25 and 64 would accumulate a credit balance of $250 ...
Budget 2019 proposes to: extend the foreign affiliate dumping rules in the Income Tax Act to prevent a corporation resident in Canada that is controlled by a non-resident individual or trust from redu...
In Budget 2019, the Government proposes further amendments to the Income Tax Act to make the beneficial ownership information maintained by federally incorporated corporations more readily available t...
Budget 2019 proposes an amendment that introduces an additional qualification for the commercial transaction exception in the definition “derivative forward agreement” as the exception applies to ...
Budget 2019 proposes to add The Memorandum of Understanding between the Government of Canada and the Respective Governments of the Flemish, French and German-speaking Communities of the Kingdom of Bel...
Budget 2019 proposes to repeal the use of taxable income as a factor in determining a CCPC’s annual expenditure limit for the purpose of the enhanced SR&ED tax credit. As a result, small CCPCs w...
Budget 2019 proposes to eliminate the requirement that sales be to a farming or fishing cooperative corporation in order to be excluded from specified corporate income. As such, this exclusion will ap...
Budget 2019 proposes that these vehicles be eligible for a full tax write-off in the year they are put in use. Qualifying vehicles will include electric battery, plug-in hybrid (with a battery capacit...
Budget 2019 proposes to introduce three new tax measures to support Canadian journalism: allowing journalism organizations to register as qualified donees; a refundable labour tax credit for qualifyin...
The most recent release of Statistics Canada’s Labour Force survey shows that, while the rate of unemployment for the month of February was unchanged, employment grew by 56,000 positions. The unempl...
In its regularly scheduled interest rate announcement made on March 6, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2% I...
The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows a drop in the rate of inflation for the month of January. That rate, as measured on a year-over-year basis, was 1.4%. ...
The first instalment payment of individual income taxes for the 2019 tax year is due on or before Friday March 15, 2019. Individuals who have previously paid tax by instalments will have received an i...
The Canada Revenue Agency (CRA) has announced that its Individual Income Tax Enquiries line (1-800-959-8281) is now available for extended hours. Until April 30, 2019, telephone agents will be availab...
The Minister of Finance has announced that the 2019-20 federal Budget will be brought down on Tuesday, March 19, 2019. Once the Budget is released, at around 4 p.m., the Budget Papers will be posted o...
The 2018 T1 Individual Income Tax Return and Guide package is now available on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packag...
The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns is available as of Monday, February 18, 2019. The current NETFILE service (which ...
The Canada Revenue Agency (CRA) has issued a Tax Tip for post-secondary students and graduates who will be filing an income tax return for the 2018 tax year. That Tax Tip, which can be found on the CR...
During the month of January, the number of people employed in Canada rose by 67,000, with that figure attributable for most part to increased employment of those aged 15 to 24 and those working in the...
The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of March 2019. That prescribed rate for the month of March will be...
The Canada Revenue Agency (CRA) has posted a Tax Tip which lists the tax deductions and credits which are most relevant to seniors, and which can be claimed by eligible seniors when preparing and fili...
The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns for the 2018 tax year will be available online on Monday February 18, 2019. The N...
Effective as of February 11, 2019, the Canada Revenue Agency (CRA) will be merging its online mail and account alerts services. Notification of the change is being sent to users of those services, and...
Finance Canada has issued a reminder that the current consultation process with respect to the upcoming 2019-20 federal Budget will end on Tuesday, January 29, 2019. Interested stakeholders can make t...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation, as measured on a year-over-year basis, stood at 2% during the month of December 2018. The equiva...
Finance Canada has announced the automobile deduction limits and expense benefit rates which will apply to businesses and their employees during the 2019 taxation year. Most of the limits which applie...
In its regularly scheduled interest rate announcement made on January 9, 2019, the Bank of Canada indicated that no change would be made to current interest rates. The Bank Rate therefore remains at 2...
The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the months of January and February 2019.The prescribed rate for January is ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2019, as well as the rates that will apply for the purpo...
Over the next seven years, significant changes will be made to the Canada Pension Plan. Those changes will result, overall, in an increase of about 50% in the maximum retirement benefit. The first suc...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of November, as measured on a year-over-year basis, stood at 1.7%. The comparable r...
Taxpayers who have not yet filed their individual income tax returns for 2017 (or the three prior years) can file those returns on NETFILE until Friday, January 25, 2019. Until that date, the Canada R...
The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of January 2019. The prescribed rate for that month will be 3.39%....
Where taxpayers fail to meet their tax filing or payment obligations, penalties and interest are usually levied for that failure. However, the Minister of National Revenue has the authority to forgive...
The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of November was the lowest recorded since 1976. The unemployment rate for the month,...
In its regularly scheduled interest rate announcement made on December 5, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate rem...
The federal government will provide the following personal tax credit amounts for 2019: Basic personal amount ……………………………… $12,069 Spouse or common law partner amount …...
The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation rate for the month of October. That rate rose 2.4%, following a 2.2% increase for...
Finance Canada has announced details of the consultation process leading up the release of the 2019-20 Federal Budget next spring. The budget consultation process will include both in-person and digit...
In the 2018-19 Fall Economic Statement, the Minister of Finance announced that three new tax initiatives would be introduced to support both traditional and digital news organizations. Those changes w...
In the Fall Economic Statement issued on November 21, the Minister of Finance announced new tax measures that would: allow businesses to immediately write off the cost of machinery and equipment used ...
Some of the non-monetary benefits which employers provide to their employees must be included in the employee’s income and taxed as such. Each year, employers must include the amount of any such tax...
The Canada Revenue Agency (CRA) provides a mobile web app for small business owners and sole proprietors which enables them to manage their business tax accounts on any browser-enabled mobile device. ...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in unemployment during the month of September. That rate stood at 5.8%, down 0.1% from the rate posted for Au...
The Canada Revenue Agency has announced the contribution rates and amounts for the Canada Pension Plan which will apply during the 2019 calendar year, and that announcement can be found at https://www...
The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of November. The prescribed rate for that month will be 3.43%. A c...
The Canada Revenue Agency (CRA) (as well as other federal government departments and agencies) has issued information indicating how government payments will be handled during the current postal disru...
The most recent release of Statistics Canada’s Consumer Price Index shows that the inflation rate for the month of September stood at 2.2%, as measured on a year-over-year basis. The comparable rate...
In its regularly scheduled interest rate announcement made on October 24, the Bank of Canada once again increased the bank rate, which now stands at 2%.In the press release announcing the increase, wh...
The federal government has announced the maximum Old Age Security (OAS) benefit amount which will be paid to eligible recipients in the last quarter — October, November, and December — of 2018. Th...
In some circumstances, taxpayers are entitled to request a reduction in the amount of tax being deducted at source from their income. An employee can request that the amount of income tax being deduct...
A number of changes have been made over the past few years to the Canada Pension Plan (CPP), with those changes generally providing greater flexibility to CPP contributors. Some of those changes parti...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decrease in the overall unemployment rate for the month of September. That rate decreased from the 6% rate recorded f...
The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of October. The prescribed rate for that month will be 3.33%. A ch...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the fourth quarter of 2018, as well as the rates that will apply for the purp...
While the deadline for filing of individual income tax returns for the 2017 tax year (for both employees and the self-employed) has passed, the Canada Revenue Agency’s (CRA’s) NETFILE service thro...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August 2018 stood at 2.8%, as measured on a year-over-year basis. The comparable...
Canada’s tax system is one based on residency, and individuals who are considered to be residents of Canada are subject to federal and provincial tax. The federal government has issued a fact sheet ...
The Minister of Finance has announced that the employment insurance premium rate payable by employees and the self-employed for the 2019 tax year will be reduced. The premium rate for that year will b...
The federal government has updated and re-issued its guide to child benefits paid by the federal and several provincial governments. The updated guide (T4114), which is available on the Canada Revenue...
The most recent release of Statistics Canada’s Labour Force Survey shows a small increase in the unemployment rate posted for the month of August. That rate rose by 0.2%, from 5.8% to 6%. Most of th...
The Canada Revenue Agency (CRA) can provide interest and penalty relief to taxpayers who are unable to meet their tax filing or payment obligations due to circumstances beyond their control, including...
In its scheduled interest rate announcement made on September 5, the Bank indicated that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 1.75%. The Bank acknow...
Each year the Canada Revenue Agency (CRA) sends a letter and questionnaire to approximately 350,000 taxpayers, seeking to determine whether such taxpayers are receiving the correct tax credits and ben...
The due date for the third instalment payment of 2018 income taxes by individuals falls on September 15, 2018. As that date is a Saturday, instalment payments will be considered to be made on time if ...
The federal government has announced that changes will be made to the administrative rules governing the extent to which charities can engage in non-partisan political activities. The intended amendme...
The most recent release of Statistics Canada’s Consumer Price Survey shows a significant increase in inflation for the month of July. That rate, as measured on a year-over-year basis, stood at 3%. T...
The most recent release of Statistics Canada’s Labour Force Survey indicates that the overall rate of unemployment was down slightly for the month of July. That rate stood at 5.8%, down by 0.2% from...
The Minister of Finance has announced that two major payment card networks have agreed to lower costs charged to small and medium-sized businesses. Both VISA and Mastercard have agreed to reduce domes...
The Canada Revenue Agency (CRA) prepares and posts on its website a number of podcasts and webinars covering tax and tax-related issues of particular interest to small businesses. There are currently ...
The Bank of Canada has issued a listing of the dates on which it will make announcements during the 2019 calendar year with respect to current interest rates. There are eight such interest rate announ...
The Canada Mortgage and Housing Corporation (CMHC) has announced that, effective as of October 1, 2018, changes will be made to the process by which self-employed taxpayers are assessed for mortgage f...
The Canada Revenue Agency (CRA) has updated and re-issued its Form RC366, which allows businesses to have amounts owed to them deposited directly to a bank account. The updated form can be used to eit...
The Canada Revenue Agency (CRA) has updated and re-issued its publication RC4092(E) on Registered Education Savings Plans. The updated publication incorporates changes, originally announced as part of...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of June, as measured on a year-over-year basis, stood at 2.5%. That change ...
The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will apply during the months of July and August 2018. Those prescribed rates will be 3.28% for July ...
The Canada Revenue Agency has updated and re-issued its publication outlining the tax treatment of funds held in a RRIF on the death of the RRIF annuitant. The updated publication (RC4178(E)) also rev...
While employment rose by 32,000 during the month of June, the unemployment rate was also up, by 0.2%, a result attributed by Statistics Canada an increase in the number of individuals seeking to enter...
In its regularly scheduled interest rate announcement made on July 11, the Bank of Canada indicated that it was increasing its benchmark interest rate by one-quarter of a percentage point. Accordingly...
Each year, the Canada Revenue Agency reviews approximately 3 million returns which have already been filed and assessed. Generally, such reviews are carried out to confirm income amounts reported, and...
Old Age Security (“OAS”) benefits received by Canadians are indexed to changes in the overall Consumer Price Index, and are adjusted each quarter to reflect increases in that Index.The federal gov...
The most recent release of Statistics Canada’s Consumer Price Index indicates the rate of inflation for the month of May stood at 2.2%. The same rate was recorded for the month of April, and both ra...
The Canada Revenue Agency (CRA) has re-issued the payroll deductions online calculator to be used by employers in calculating employee source deductions as of July 1, 2018. The updated version of that...
The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July. The prescribed rate for that month will be 3.28%. A chart...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the third quarter of 2018, as well as the rates that will apply for the purpo...
The Canada Revenue Agency has updated and re-issued its standard form for filing an objection to a Notice of Assessment or Reassessment. The 2018 T-400A E, Notice of Objection, can be found on the CRA...
The most recent release of Statistics Canada’s Labour Force Survey shows little change in unemployment during the month of May. For the fourth consecutive month, that rate stood at 5.8%. There was s...
The filing deadline for individual income tax returns for the 2017 year for self-employed individuals and their spouses is midnight Friday June 15, 2018. Returns can be filed using the Canada Revenue ...
For Canadians who make quarterly instalment payments of personal income tax, the next due date for such payment is Friday June 15, 2018. The Canada Revenue Agency has posted a notice on its website in...
The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who have been affected by this spring’s floods of the availability of administrative tax relief. Under the federal government’s T...
In its regularly scheduled interest rate announcement made on May 30, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the Bank Rate remains...
The Canada Revenue Agency (CRA) has issued updated payroll deduction formulas for use by employers for payroll periods beginning after July 1, 2018. The updated formulas reflect changes in provincial ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of April stood at 2.2%, as measured on a year-over-year basis. The rate for...
The Canada Revenue Agency (CRA) will be making changes to its distribution method for GST/HST reporting and remittance forms for small businesses, with those changes generally directed toward reducing...
The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change during the month of April to either employment figures or the overall unemployment rate. That un...
The Canada Revenue Agency prepares and posts podcasts on a number of different tax topics, both individual and corporate. Those podcasts are available for download from the CRA website. The current se...
The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the months of May and June 2018. Those prescribed rates will be 3.22% during the ...
Taxpayers who have filed their return for the 2017 tax year and are expecting to receive a refund can track the status of that refund payment through a toll-free telephone line. That line, the CRA’s...
The Canada Revenue Agency (CRA) has issued a warning to taxpayers of the need to be particularly vigilant with respect to fraudulent text, telephone, and e-mail communications, which increase during t...
The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation stood at 2.3% during the month of March 2018, as measured on a year-over-year basis. The year...
The Canada Revenue Agency (CRA) has issued a reminder that all individual income tax balances owed for the 2017 tax year must be paid on or before Monday April 30, 2018. April 30 is also the deadline ...
The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment for the month of March 2018 stood at 5.8%. The same rate was recorded for February 2018. Employ...
In its regularly scheduled interest rate announcement made on April 18, the Bank of Canada indicated that no change was required to current interest rates. Accordingly, the Bank Rate will remain at 1....
It is not uncommon for taxpayers to discover an error or omission in an already-filed return, and the usual means by which such error can be corrected is the filing of a T1-Adjustment form. While a co...
The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who receive income from the “sharing economy” that such income is taxable and must be reported on the annual tax return. Although...
The Bank of Canada’s regularly scheduled interest rate announcement dates for the remainder of calendar year 2018 are as follows: April 18, 2018; May 30, 2018; July 11, 2018; September 5, 2018; Octo...
Proceeds received from the sale of one’s principal residence are, in most circumstances, not taxable, as such sales are eligible for the principal residence exemption. However, as of the 2016 tax ye...
The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in inflation for the month of February. That rate stood at 2.2%, while the rate for January 2018 was 1.7%. ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the second quarter of 2018, as well as the rates that will apply for the purpose...
While taxpayers fall victim to tax scams year-round, such scams are more prevalent during and just following tax filing season. During that time, taxpayers expect to hear from the tax authorities, a...
In December 2017, the Canada Revenue Agency (CRA) announced that substantive changes would be made to the Agency’s Voluntary Disclosure Program (VDP). That program enables taxpayers who are in defau...
The Canada Revenue Agency has issued its Guide RC4018, Electronic Filers Manual for 2017 Income Tax and Benefit Returns. That guide is for use by certified e-filers in filing individual income tax ret...
The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate for the month of February 2018. That rate declined from 5.9% in the month of...
The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation for the month of January 2018 stood at 1.7%. The rate for the previous month was 1.9%. Inflat...
In its regularly scheduled interest rate announcement made on March 7, the Bank of Canada indicated that no change would be made to current interest rates. Accordingly, the bank rate remains at 1.5%. ...
Budget 2018: No personal tax credits have been repealed, and there are no new personal tax rate changes....
Budget 2018: Foreign-born Status Indians may now be eligible for child benefits, retroactive to 2005....
Budget 2018: Eligibility of specially trained service animals will be expanded for the purposes of the medical expense tax credit....
Budget 2018: Taxpayers will no longer need to apply when filing their return in order to receive the Canada Workers Benefit....
Budget 2018: The Working Income Tax Benefit amounts are enhanced as of 2019, and the credit is renamed the Canada Workers Benefit...
Budget 2018: The non-resident surplus stripping rules are tightened to address the use of partnerships and trusts....
Budget 2018: Where a CRA compliance order or information requirement is contested, a new rule will “stop the clock” to prevent the tax year from being statute barred....
Budget 2018: A corporation will have two RDTOH accounts going forward: eligible and non-eligible RDTOH....
Budget 2018: A corporation with $100,000 of investment income will have its small business limit reduced to $250,000....
Budget 2018: A corporation’s small business limit will be reduced where the corporation earns investment income exceeding $50,000....
The Canada Revenue Agency (CRA) provides a 1-800 telephone service to provide tax information to Canadian taxpayers. Such information can be general in nature, or can involve the specific tax affairs ...
The Canada Revenue Agency’s NETFILE service for filing of individual income tax returns will be available starting Monday February 26, 2018. Taxpayers do not need to obtain an access code to file th...
The most recent release of Statistics Canada’s Labor Force Survey shows a slight increase in the overall unemployment rate for the month of January. That rate rose by 0.1%, from 5.8% to 5.9%. That c...
The Federal Minister of Finance has announced that the 2018-19 federal Budget will be brought down on Tuesday, February 27, 2018. The Budget will be released at around 4 p.m. and the full Budget Paper...
This year, the Canada Revenue Agency (CRA) will be providing taxpayers with hard copies of the 2017 Income Tax and Benefit package through a variety of means, and at various dates. Individuals who pap...
The Canada Revenue Agency (CRA) has announced the date on which NETFILE service for the filing of individual income tax returns for the 2017 tax year will be available. NETFILE service will be availab...
While the majority of Canadians now file their individual income tax returns electronically, there is still a significant minority of tax filers who file using a printed return. The Canada Revenue Age...
The Canada Revenue Agency (CRA) has posted a notice on its website that an “update” has been made to individual 2017 tax forms. Those forms are to be used by individual Canadians to file their ret...
For a number of years, taxpayers whose tax situation was relatively straightforward were able to file their return by telephone. That service, which was called TELEFILE, was withdrawn a few years ago....
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2018, as well as the rates that will apply for the purpo...
As widely expected, the Bank of Canada indicated, in its regularly scheduled interest rate announcement made on January 17, that an increase in the bank rate was required. The Bank’s announcement, w...
Finance Canada has announced that the consultation process leading to the release of the 2018-19 federal Budget will conclude on Friday January 26, 2018. Canadians can provide input by submitting thei...
The Canada Revenue Agency has released the T1 Individual Income Tax Return and Benefit form to be used by individual Canadian taxpayers in filing their return for the 2017 tax year. The T1 form is ava...
The most recent release of Statistics Canada’s Labour Force Survey indicates that the unemployment rate for the month of December 2017 stood at 5.7%. The last period for which that rate was recorded...
As previously announced, the federal small business tax rate is reduced to 10.0%, effective as of January 1, 2018. There is no change in the federal small business limit, which remains at $500,000. Th...
Finance Canada has announced the limits and thresholds which will apply for purposes of determining automobile benefits and deductions during 2018. Most such deduction limits and thresholds are unchan...
Planned changes to the federal income tax rules governing the taxation of small incorporated Canadian businesses are to take effect for 2018. One of those changes will include greater restrictions on ...
The Canada Revenue Agency (CRA) provides an administrative program under which taxpayers who have failed to file returns or pay taxes on a timely basis can bring their tax affairs into compliance, usu...
Taxpayers who are turning age 71 during the year and who have available contribution room are entitled to make a final RRSP contribution for that year. Such contributions must be made by the end of th...
Taxpayers who have not yet filed their return for the 2016 tax year will have until January 19, 2018 to file that return using NETFILE. Until that date, returns for the 2013, 2014, 2015, and 2016 tax ...
In its regularly scheduled interest rate announcement made on December 6, the Bank of Canada indicated that, in its view, no change is required to current rates. Accordingly, the bank rate remains at ...
The most recent release of Statistic’s Canada’s Labour Force Survey shows a slight decline in the overall unemployment for the month of November. That rate declined by 0.4%, to 5.9%. The November ...
The Canada Revenue Agency has issued the 2018 version of its publication T4127(E), Payroll Deductions Formulas. The guide is intended for use by payroll software providers and by employers which manag...
The Canada Revenue Agency has issued the federal TD1 Form and Worksheet which will be used by taxpayers and their employers to determine required federal income tax source deductions for the upcoming ...
The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows an inflation rate of 1.4% for the month of October, as measured on a year-over-year basis. The equivalent rate for the...
Finance Canada has begun the consultation process leading to the release of the 2018-19 federal Budget. As part of that budget consultation process, the Minister of Finance is holding in-person public...
Effective as of January 8, 2018, administrators and representatives of qualifying Canadian trusts will be able to file trust income tax and information returns online, through the Canada Revenue Agenc...
The federal government has announced the premium rates and maximum insurable earnings amount which will be in place for the 2018 calendar year. The premium rate for the year for employees has been set...
The Canada Revenue Agency (CRA) has announced the contribution rates and amounts for both employers and employees which will apply for 2018. Maximum pensionable earnings for the year will be $55,900 (...
Revenu Québec has announced the contribution percentages and amounts which will apply for purposes of the Quebec Pension Plan for 2021, and those are as follows: The Quebec Pension Plan contribution ...
Quebec employers deduct amounts for provincial income tax from employee paycheques and remit those tax amounts to the provincial government on behalf of each employee. The amount of tax withheld at so...
Revenu Québec has issued a reminder to landlords in the province that the period for the filing of RL-31 slips started on December 1, 2020. The RL-31 slip must be filed by every person or partnership...
Earlier this year, the provincial government announced that Quebec employers who qualified for the Canada Emergency Wage Subsidy could receive a provincial credit for the amount of Health Service Fund...
Revenu Québec has issued the prescribed form to be completed by Quebec residents for employee source deduction purposes for the 2021 taxation year. That form, the TP-1015.3-V, can be found on the Rev...
Revenu Québec has posted a reminder on its website of an upcoming deadline for applications for advance payments of certain tax credits. The December 1 application deadline applies for purposes of ad...
Revenu Québec has announced that certain deadlines which would normally apply with respect to applications for business tax credits may now be extended. Specifically, where the usual deadline for an ...
To address perceived problems with under-reporting of income, Revenu Québec has announced that new tax obligations will be imposed on businesses and subcontractors in the building service sector. Tho...
Revenu Québec has updated and re-issued two forms dealing with the tax treatment of the acquisition and sale of a principal residence. The first form, the TP752, is used to apply for the Home Buyer...
The province of Quebec provides families with a refundable tax credit for qualifying childcare expenses incurred, and eligible families may also receive advance payment of that credit. Revenu Québec ...
As part of the provincial government’s pandemic response, Revenu Québec provided businesses in the province with additional time to file claims for certain tax credits. As outlined on the Revenu Qu...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
On March 17, 2020, Revenu Québec announced that, as part of its pandemic response, it would be suspending some of its collection activities with respect to income tax debts, including garnishment ord...
Individual residents of Quebec who pay provincial income tax by instalments usually make four instalment payments of tax each year, by the 15th day of March, June, September, and December. Earlier thi...
As part of its pandemic relief measures, the province extended the deadline for payment of individual income tax balances owed for the 2019 tax year. Such balances must now be paid on or before Wednes...
As part of its pandemic response, Revenu Québec extended some provincial income tax filing deadlines for corporations. Under that policy, if the normal filing deadline fell in the period: from March ...
Earlier this year, Revenu Québec announced that it would, in some circumstances, accept electronic signatures on certain forms filed with them and that such policy would continue until September 1, 2...
Revenu Québec has announced that its offices have re-opened to provide a limited number of in-person services. Offices are open Monday through Friday, from 10 a.m. to 3 p.m. Taxpayers will be able to...
The Quebec government has announced that the existing tax credit provided to eligible employers in the province with respect to qualifying contributions made to the Health Services Fund (HSF) has been...
When a health emergency was declared in Québec in March of this year, many businesses and offices were closed and employees were obligated to work from home, or “telework”. Employees who did so a...
Individual taxpayers who pay provincial income tax by instalment are required to make four such instalment payments each year. The usual deadlines for such payments are the 15th day of March, June, Se...
Earlier this year, Revenu Québec announced that the deadline for payment of any individual provincial income tax balances owed for 2019 would be extended to September 1, 2020. The usual deadline for ...
Canadian-controlled private corporations can qualify for a lower provincial corporate income tax rate where they meet certain criteria, and that lower rate is known as the small business deduction. On...
The province provides a tax credit for qualifying childcare expenses incurred by Quebec residents who are enrolled in eligible education programs. Changes to the rules governing that credit were recen...
As part of the province’s pandemic relief measures, the deadline for filing of provincial individual income tax returns for the 2019 taxation year was extended. For most individual taxpayers that de...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
Individual taxpayers in Quebec were required to file their provincial tax returns for the 2019 tax year earlier this month. The deadline for such filings was June 1 for most taxpayers and June 15 for ...
Revenu Québec has announced that the deadline for filing of provincial corporate income tax returns that would usually be due between May 31 and August 31, 2020 has been extended. The new deadline fo...
On April 30, the province announced that Quebec employers who qualified for the federal Canada Employer Wage Subsidy (CEWS) would also receive a credit for contributions made to the provincial Health ...
Earlier this year, Revenu Québec announced that the filing deadline for individuals with respect to the 2019 provincial income tax had been extended to June 1, 2020. In addition, the deadline for pay...
Residents of the province who pay provincial income tax by instalments would normally be required to make the second instalment payment for this year on June 15, 2020. As part of the province’s pand...
The province of Quebec provides a number of refundable tax credits and other benefits, some of which are geared to income. Eligibility for such credits and benefits, as well as the amount receivable, ...
Last month, it was announced that the provincial government would provide a wage supplement for essential workers in the province who earn between $5,000 and $28,600 per year, through the Incentive Pr...
Revenu Québec has announced that employers in the province who are eligible for the federal Canada Emergency Wage Subsidy can apply for a credit for contributions made to the provincial health servic...
The following limits and rates will apply for provincial tax purposes during 2020 with respect to the computation of automobile expense deductions and taxable benefits. For purposes of calculating cap...
The Quebec government has announced a new financial assistance program for individuals working essential jobs during the COVID-19 pandemic, with that assistance amount making up the difference between...
Under the usual rules, Quebec corporations must pay their provincial income tax balances no later than two months after the end of the corporation’s taxation year. Revenu Québec has announced that ...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
The Quebec government has announced that it is extending the usual deadline with respect to certain provincial sales tax (QST) filing and remittance obligations. Specifically, the filing and remittanc...
Revenu Québec has updated its previous announcement with respect to the deadlines for filing of provincial individual income tax returns and payment of provincial income taxes owed for the 2019 tax y...
Revenu Québec has announced that filing and payment deadlines relating to the 2019 tax year have been extended. The changes to those deadlines are as follows: the deadline for filing provincial incom...
The 2020-21 Quebec Budget included an announcement of a new tax credit for caregivers in the province. That tax credit will take effect “immediately”. The new credit will have two components, as f...
Revenu Quebec has issued a lengthy (32 pages) tax guide providing information on tax issues which are of particular relevance to Quebec seniors. That guide – Seniors and Taxation (IN-311-V) – revi...
The NETFILE Quebec service for the filing of individual provincial income tax returns is now available. Such returns must be filed using approved software. A listing of such software can be found at h...
The provincial government has announced that the province’s Budget for the upcoming (2020-21) fiscal year will be announced on Tuesday March 10, 2020. Once the Budget is released, the full Budget pa...
Revenu Québec has announced that its NETFILE service for the online filing of provincial individual income tax returns for 2019 will be available as of Monday February 24, 2020. Details of the NETFIL...
Revenu Québec has announced the limits and rates for the deduction of automobile expenses and the calculation of taxable benefits related to the use of an automobile which will apply for 2020. Most s...
The Canada Revenue Agency (CRA) has released the Individual Income Tax Return and Guide to be used by individuals who were residents of Quebec as of December 31, 2019. That return and guide can be fou...
Revenu Québec has announced that a new app is available to employers in the province to assist with the calculation of employer contributions and employee source deductions. The new app, WebRAS, allo...
Revenu Québec provides a program — the Voluntary Disclosure Program (VDP) — under which taxpayers who have previously failed to meet their tax obligations can bring themselves into compliance. Re...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
Revenu Quebec has issued a reminder to residential landlords in the province that every person or partnership that owns rental property and rents out a dwelling for which rent was paid or payable on D...
Revenu Québec has announced the Quebec Parental Insurance Plan (QPIP) maximums, thresholds and rates which will apply during 2020. They are as follows. The maximum insurable earnings have been increa...
Residents of the province who pay income tax by instalments must make their final instalment payment on or before Monday December 16, 2019. Information on the instalment payment requirement, and how i...
Revenu Québec has released the Quebec Pension Plan contribution rates and income ceilings which will apply during the 2020 calendar year. For 2020, maximum pensionable earnings will increase to $58,7...
The Quebec Ministry of Finance has issued details of the individual income tax brackets and rates and the personal tax credit amounts which will apply for the 2020 tax year. The indexing factor for su...
Quebec taxpayers who are eligible to receive certain tax credits, including the tax credit for child care expenses, the work premium, or the adapted work premium can apply to receive payment of such c...
The Quebec Minister of Finance recently announced that the additional contribution for subsidized educational childcare has been eliminated for all families, effective as of the 2019 tax year. Indivi...
By the end of February 2020, entities which paid investment income during 2019 will be required to prepare, file, and distribute information slips (RL-3) in respect of such payments made. Revenu Québ...
Revenu Québec has issued a reminder to operators of digital accommodation platforms, that, beginning on January 1, 2020, such operators who rent units in an overnight establishment which is subject...
Revenu Québec has issued a series of publications outlining the circumstances in which employees who work in various sectors and who earn different types of income can deduct employment related expen...
As announced in this year’s provincial Budget, and beginning on January 1, 2020, operators of digital accommodation platforms in the province may be subject to new registration and reporting require...
Quebec Finance has issued an Information Bulletin (2019-9) providing details of a new refundable tax credit for print media in the province. The new credit, which is available with respect to qualifyi...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
Most operators of restaurant establishments in the province are required to use Sales Recording Modules (SRMs) to produce bills containing required information with respect to each sales transaction e...
The province provides an income replacement plan, the Quebec Parental Insurance Plan (QPIP), which pays benefits to eligible workers who take a maternity, paternity, parental, or adoption leave. Reven...
Revenu Québec has announced the availability of a new service which will enable taxpayers to automatically validate the QST numbers, effective date of QST registration and the name of their suppliers...
Individual taxpayers who make quarterly instalment payments of tax must make the third such instalment payment for the year on or before September 15. As that date falls on a Sunday this year, payment...
Revenu Québec has announced that employers in the province whose source deduction and employer contribution remittance is done weekly or twice-monthly will be provided with some leeway in that schedu...
Effective as of January 15, 2019, Revenu Québec has changed its administrative policy with respect to situations in which overpayments are made by employers to employees, and those employees repay th...
On July 25, Revenu Québec learned that the personal information of some its current and former employees had been leaked. It has now issued an FAQ document to answer questions about who has been affe...
Quebec residents who are required to pay income tax by instalments must make their third quarterly instalment for 2019 on or before September 15, 2019. Most individuals who are subject to the instalme...
The federal government provides a savings vehicle, the Registered Education Savings Plan (RESP), which enables parents to save for their children’s education on a tax-advantaged basis. Residents of ...
Quebec taxpayers who are employed have income tax deducted from their paycheques by their employer and, in some circumstances, the deductions made can exceed the individual’s actual tax owing for th...
Revenu Québec has issued a reminder to taxpayers on how to identify phishing attempts in telephone calls, e-mails, or texts which purport to be from the Agency. That reminder notes that the following...
Revenu Québec has posted information on its website with respect to the preferential tax treatment provided for building renovation or alteration costs related to accessibility. Such tax treatment is...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
The province of Quebec provides eligible seniors aged 70 and older with a refundable tax credit to help offset the cost of services needed to enable them to remain in their homes. That tax credit is e...
In the 2019-20 Quebec Budget, the provincial government announced that an incentive would be provided to encourage businesses to hire and retain older workers. Businesses which do so will be entitled ...
In this year’s Budget, the provincial government announced that it had undertaken a review of the financial assistance provided to parents of a handicapped child with exceptional care needs. As a re...
Residents of Quebec who pay provincial income tax by instalments must make their second instalment payment for the year on or before Monday June 17, 2019. More information on the instalment payment sy...
The general deadline for filing of provincial income tax returns for 2018 was April 30, 2019. However, self-employed taxpayers (and their spouses) have until Monday, June 17, 2019 to file their income...
Effective as of September 1, 2019, the registration requirements for Quebec sales tax will be expanded. As of that date, suppliers outside of Quebec who are registered for the GST/HST must become regi...
Revenu Québec provides taxpayers in the province with a number of online tax services. Those services include My Account, which enables taxpayers to carry out a wide range of tax-related transactions...
Revenu Québec has announced that taxpayers who wish to correct an error made on an already-filed provincial individual income tax return now have the option of doing so using commercial software whic...
Payments of provincial individual income tax for 2018 were due and payable on or before April 30, 2019 and the filing deadline for individual income returns for that year (excepting returns filed by s...
All Quebec individual taxpayers are required to pay any balance of income taxes owed for the 2018 tax year on or before Tuesday April 30, 2019, as outlined on the Revenu Québec website at https://www...
Revenu Québec has announced the dollar figure limits and rates which will apply during 2019 with respect to the deduction of automobile expenses and the calculation of taxable benefits related to the...
Effective as of May 1, 2019, the general minimum wage payable in Quebec will increase from $12.00 per hour to $12.50 per hour. Different minimum wage calculations apply to workers who receive tips, th...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
In its 2019-20 Budget, the provincial government announced an expansion of the existing tax credit provided to older workers. That credit provides workers aged 61 and older with an exemption from tax ...
Effective as of May 1, 2019, the general provincial minimum wage will increase from $12.00 to $12.50 per hour. The general minimum wage does not apply to employees who earn tips. However, employees wh...
Revenu Québec has issued the guide to be used by tax preparers in preparing and filing individual income tax returns for the 2018 tax year. That guide summarizes the individual tax changes which took...
The 2019-20 provincial Budget will be brought down by the Quebec Minister of Finance on Thursday March 21, 2019. Once the Budget is released, the budget papers will be posted on the Quebec government ...
Effective as from January 1, 2019, Quebec Sales Tax (QST) registration is mandatory for businesses and operators of digital platforms outside Canada, where their sales to Quebec residents exceed $30,0...
Quebec taxpayers can, as of February 18, 2019, file their provincial income tax returns for the 2018 tax year online, through NetFile Quebec. Individual provincial income tax returns which have not ye...
The provincial government provides a tax credit to help offset the cost of child care expenses, with the tax credit rate based on family income. Taxpayers who are eligible to receive the Child Care Ta...
Quebec Finance has issued an Information Bulletin (2019-2) outlining the limits and rates applying to the deduction of expenses and the calculation of benefits relating to the use of an automobile. Su...
The first instalment payment deadline for the 2019 tax year is March 15, 2019. Revenu Québec will provide affected taxpayers with instalment reminders setting out instalment payment amounts, but such...
Measures announced in the 2018 provincial Budget create new QST registration requirements for certain suppliers engaged in e-commerce. The new requirements are effective as of January 1, 2019. As of t...
Revenu Québec has announced the Quebec Pension Plan contribution rates and amounts which will apply for 2019. Maximum pensionable earnings for 2019 are set at $57,400 and the basic exemption is uncha...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
Residents of Quebec are required to pay income tax in instalments if they estimate that their net provincial income tax payable on filing for the current year and either of the two preceding tax years...
Revenu Québec has announced the Quebec Parental Insurance Plan (QPIP) maximums, thresholds, and rates which will apply during 2019. They are as follows. The maximum insurable earnings have been incr...
A new refundable tax credit of $200 per person per year will be provided to Quebec seniors, effective for the 2018 and subsequent tax years. The new credit will be claimable by seniors who are aged 70...
Landlords in the province must provide their tenants with an RL-31 slip documenting the amount of rent paid during the year. That slip is then used by tenants when claiming provincial tax credits. Rev...
Revenu Québec has issued two new forms to be used by Quebec taxpayers when authorizing a representative or cancelling an authorization which was previously granted. The first form, Authorization to C...
Since 2007, residents of Quebec have been eligible for the Quebec Education Savings Incentive (QESI) program. Individuals in the province can contribute amounts to a registered education savings plan ...
Eligible Quebec residents can receive a number of refundable tax credits and benefits, including the tax credit for child care expenses and the work premium. Those who are eligible for such credits in...
Revenu Québec has issued guidelines for residents of the province who will be using commercial tax software for the preparation of their provincial income tax returns for 2018. The Information Notice...
Revenu Québec has issued a reminder to taxpayers that, on June 27, 2018, changes were made to the rules for reporting and paying GST/HST and QST on taxable supplies of carbon emission allowances made...
Quebec taxpayers who have an outstanding amount owing to Revenu Québec can make a payment agreement to repay that amount in instalments over a period of time. Revenu Québec recently updated and re-i...
For provincial income tax purposes, employees are entitled to deduct certain types of expenses in calculating taxable income. Revenu Québec has updated and re-issued its guide to the types of expense...
The province of Quebec provides a refundable tax credit, the RenoVert tax credit, for renovation work done on a residence to improve its energy efficiency. That program was extended to be available fo...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
NetFile Quebec, the online filing service for provincial individual income tax returns, remains available for the filing of such returns for the 2017 tax year. That online filing service will be avail...
The province of Quebec provides a tax credit for eligible medical expenses incurred by a taxpayer and by his or her spouse and dependants. Revenu Québec recently issued an updated guide outlining the...
The province of Quebec provides a solidarity tax credit for eligible residents of the province, and eligibility for the credit is based in part on the taxpayer’s situation as of December 31. However...
The provincial government has announced that, effective for 2018, the total payroll threshold for the health services fund contribution rate will increase from $5 million to $5.5 million. It will then...
The third deadline for payment of instalments of 2018 provincial income tax by individuals resident in the province is September 15, 2018. Taxpayers who pay taxes by instalment should have received an...
Revenu Québec has updated and re-issued its publication ADM-597-V, Charter of Taxpayers’ and Mandataries’ Rights. That publication, which can be found on the Revenu Québec website at https://www...
Taxpayers in Quebec can notify Revenu Québec of a change in address online, through the Agency’s website. To use the change of address service, which is available at https://www.revenuquebec.ca/e...
Revenu Québec has posted a notice on its website alerting Quebec residents of the need to be aware of individuals who contact taxpayers in the province fraudulently claiming to be from Revenu Quebec....
Revenu Québec has issued a reminder notice for employers who may be employing students, including those under age 18, that special rules may apply to such employees for purposes of source deductions....
Revenu Québec has posted a notice on its website reminding taxpayers who have not yet filed their provincial income tax returns for the 2017 or 2016 tax years that they can still file such returns on...
As part of the province’s 2018-19 Budget, the Minister of Finance announced that the rate for health services fund contributions required of small and medium-sized businesses (SMBs) would be reduced...
Revenu Québec has updated and re-issued its guide to estate taxation, for use by persons responsible for settling the estate of a deceased individual. The updated guide, which can be found at https:/...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
The province of Quebec provides eligible seniors with a tax credit to help offset the cost of items which they need to continue living independently. The credit is equal to 20% of the cost of the purc...
In this year’s Budget, it was announced that changes would be made to the refundable tax credit provided by the province for volunteer respite services. That refundable tax credit is provided in rel...
As announced in this year’s Budget, the province has enhanced the provincial tax credit which may be claimed by caregivers. A new component has been added to the existing credit, in order to provide...
The next deadline for Quebec taxpayers who make instalment payments of provincial income tax is Friday June 15, 2018. Instalment payments of tax are generally required of taxpayers for whom there is a...
As announced in this year’s provincial Budget, the province is providing small and medium-sized Quebec businesses (SMBs) which offer training to their workers with a refundable tax credit. The tax ...
As announced in this year’s provincial Budget, two of the three annual limits on childcare expenses eligible for the refundable tax credit for childcare expenses have been increased. Beginning with ...
As announced in the 2018-19 provincial Budget, first-time home buyers in the province, as well as disabled individuals who purchase a property which is better suited for their needs, will be eligible ...
In this year’s budget, the provincial government announced that the provincial small business deduction rate will be increased over the next four years. The maximum rate will now be as follows: 4.7%...
In order to encourage experienced workers to stay in the labour force, the province of Quebec provides an experienced worker tax credit. That tax credit is based on a specified amount of eligible work...
All provincial income tax amounts payable by individuals for the 2017 tax year must be paid to Revenu Québec on or before Monday April 30, 2018. Interest will be charged on any unpaid amounts beginni...
The province provides a refundable tax credit to help offset the cost of eco-friendly home renovations. That credit – the RenoVert tax credit – was scheduled to expire as of March 31, 2018, but ha...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
Revenu Québec has announced that individuals and representatives can now use NETFILE Quebec to file individual provincial income tax returns for the 2016 tax year, as well as for 2017. In addition, i...
On March 27, 2018, the Quebec Minister of Finance brought down the province’s fourth consecutive balanced budget. The Budget papers also project balanced budgets for the province over the next sever...
Revenu Québec provides and administers a Voluntary Disclosure Program for both provincial income tax and consumption taxes. Under that program, taxpayers who are in default of their provincial tax fi...
Revenu Québec has issued a notice to address any confusion with respect to the conversion rate for personal tax credits to be used during 2018 in calculating both employee source deductions and incom...
Revenu Québec has issued a reminder to taxpayers that the RenoVert tax credit program will be available only for qualifying renovation contracts which are entered into prior to April 1, 2018. Payment...
For the 2018 tax year, the province will provide the following personal tax credit amounts: Basic amount …………………………………………… $15,012 Amount transferred between spou...
While the majority of Quebec taxpayers will likely use Revenu Québec’s online filing services to file their 2017 individual income tax returns, taxpayers do still have the option of filing such a r...
Revenu Québec has released its Tax Preparers’ Guide, Individuals (SW-223-V), containing instructions for using the NetFile Quebec system to file provincial tax returns for the 2017 tax year. The gu...
Revenu Québec has updated and re-issued its general guide to the administration of the goods and services tax (GST), the harmonized sales tax (HST) and the Quebec sales tax (QST) in the province. The...
Revenu Québec has announced that its NETFILE service for 2017 individual provincial income tax returns will be available as of February 26, 2018. Such returns can be filed by NETFILE until mid-Januar...
Each person or partnership that, at the end of 2017, owned and leased a residential building for which rent was paid is required to file an RL-31 slip with Revenu Québec and provide a copy of that sl...
Revenu Québec has issued the provincial income tax return form (Form TP-1.D-V) to be used by individual residents of the province for the 2017 tax year. That form, along with the supporting schedules...
The province of Quebec levies and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates to be levied and pa...
Revenu Quebec has updated and re-issued its Support Payments Bulletin, which is now current to January 2018. The Bulletin, which can be found on the Revenu Quebec website at http://www.revenuquebec.ca...
Revenu Québec has announced the contribution rates and limits which will apply for the 2018 calendar year, and those are as follows. Maximum contributory earnings for the year are $52,400. The employ...
Revenu Québec has announced the income limits and contribution rates which will apply for purposes of the Quebec Parental Insurance Plan during 2018, and those are as follows. The maximum insurable ...
Revenu Québec has released the individual income tax rates and bracket amounts which will apply during the 2018 taxation year. The increased brackets amounts are the result of the indexation of the p...
Users of Revenu Québec’s My Account feature are now able to log in to that online service using the identifier and password which they use to sign into their financial institution’s online servic...
In the November Update issued by the Minister of Finance on November 21, it was announced that the tax rate which applies to the first bracket of an individual’s income will be reduced, and that suc...
A number of the refundable personal credits provided by the province, including the tax credit for child care expenses, the work premium and adapted work premium, and the tax credit for home-support s...
Employers in the province are required to provide employees with an RL-1 slip for each taxation year, and Revenu Québec has issued a notice outlining the changes which will affect the preparation of ...
The Employment Insurance premium rate for 2021 is unchanged at 1.58%.
The Employment Insurance premium rate for 2021 is unchanged at 1.58%.
Yearly maximum insurable earnings are set at $56,300, making the maximum employee premium $889.54.
As in previous years, employer premiums are 1.4 times the employee premium. The maximum employer premium for 2021 is therefore $1,245.36.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Quebec Pension Plan contribution rate for 2021 is set at 5.9% of pensionable earnings for the year.
The Quebec Pension Plan contribution rate for 2021 is set at 5.9% of pensionable earnings for the year.
Maximum pensionable earnings for the year will be $61,600, and the basic exemption is unchanged at $3,500.
The maximum employer and employee contributions to the plan for 2021 will be $3,427.90 each.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Canada Pension Plan contribution rate for 2021 is set at 5.45% of pensionable earnings for the year.
The Canada Pension Plan contribution rate for 2021 is set at 5.45% of pensionable earnings for the year.
Maximum pensionable earnings for the year will be $61,600, and the basic exemption is unchanged at $3,500.
The maximum employer and employee contributions to the plan for 2021 will be $3166.45 each, and the maximum self-employed contribution will be $6,332.90.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Dollar amounts on which individual non-refundable federal tax credits for 2021 are based, and the actual tax credit claimable, will be as follows:
Dollar amounts on which individual non-refundable federal tax credits for 2021 are based, and the actual tax credit claimable, will be as follows:
Credit amount Tax credit
Basic personal amount* 13,808 2,071.20
Spouse or common law
partner amount* 13,808 2,071.20
Eligible dependant amount* 13,808 2,071.20
Age amount 7,713 1,156.95
Net income threshold for erosion of
age credit 38,893
Canada employment amount 1,257 188.55
Disability amount 8,662 1,299.30
Adoption expenses credit 16,729 2,509.35
Medical expense tax credit
Income threshold amount 2,421
*For taxpayers having net income for the year of more than $151,978, amounts claimable for the basic personal amount, the spousal amount, and the eligible dependant amount for 2021 may differ.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The indexing factor for federal tax credits and brackets for 2021 is 1.0%. The following federal tax rates and brackets will be in effect for individuals for the 2021 tax year.
The indexing factor for federal tax credits and brackets for 2021 is 1%. The following federal tax rates and brackets will be in effect for individuals for the 2021 tax year.
Income level Federal tax rate
$13,808 - $49,020 15%
$49,021 - $98,040 20.5%
$98,041 - $151,978 26%
$151,979 - $216,511 29%
Over $216,511 33%
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Each new tax year brings with it a listing of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2021 are listed below.
Each new tax year brings with it a listing of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2021 are listed below.
RRSP deduction limit and contribution deadline
The RRSP current year contribution limit for the 2020 tax year is $27,230. In order to make the maximum current year contribution for 2020 (for which the contribution deadline will be Monday March 1, 2021), it will be necessary to have earned income for the 2019 taxation year of $151,278.
Tax-free savings account (TFSA) contribution limit
The TFSA contribution limit for 2021 is unchanged at $6,000. The actual amount which can be contributed by a particular individual includes both the current-year limit and any carryover of uncontributed or re-contribution amounts from previous taxation years.
Taxpayers can find out their personal 2021 contribution limit by calling the Canada Revenue Agency’s (CRA) Individual Income Tax Enquiries line at 1-800-959-8281. Those who have registered for the CRA’s online tax service My Account can obtain that information by logging into that service.
Individual tax instalment deadlines for 2021
Millions of individual taxpayers pay income tax by quarterly instalments, which are due on the 15th day of March, June, September, and December 2021.
The actual tax instalment due dates for 2021 are as follows:
Monday March 15, 2021
Tuesday June 15, 2021
Wednesday September 15, 2021
Wednesday December 15, 2021
Old Age Security income clawback threshold
For 2021, the income level above which Old Age Security (OAS) benefits are clawed back is $79,845.
Individual tax filing and payment deadlines in 2021
For all individual taxpayers, including those who are self-employed, the deadline for payment of all income tax owed for the 2020 tax year is Friday, April 30, 2021.
Taxpayers (other than the self-employed and their spouses) must file an income tax return for 2020 on or before Friday, April 30, 2021.
Self-employed taxpayers and their spouses must file a 2020 income tax return on or before Tuesday June 15, 2021.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Planning for – or even thinking about – next year’s taxes when it’s not yet even mid-December may seem more than a little premature. However, most Canadians will start paying their taxes for 2021 with the first paycheque they receive in January, and it’s worth taking a bit of time to make sure that things start off – and stay – on the right foot.
Planning for – or even thinking about – next year’s taxes when it’s not yet even mid-December may seem more than a little premature. However, most Canadians will start paying their taxes for 2021 with the first paycheque they receive in January, and it’s worth taking a bit of time to make sure that things start off – and stay – on the right foot.
For most Canadians, (certainly for the vast majority who earn their income from employment), income tax, along with other statutory deductions like Canada Pension Plan contributions and Employment Insurance premiums, are paid periodically throughout the year by means of deductions taken from each paycheque received, with those deductions then remitted to the Canada Revenue Agency on the taxpayer’s behalf by his or her employer.
Of course, each taxpayer’s situation is unique and so the employer has to have some guidance as to how much to deduct and remit on behalf of each employee. That guidance is provided by the employee/taxpayer in the form of TD1 forms which are completed and signed by each employee, sometimes at the start of each year, but certainly at the time employment commences. Each employee must, in fact, complete two TD1 forms – one for federal tax purposes and the other for provincial tax imposed by the province in which the taxpayer lives. Federal and provincial TD1 forms for 2021 (which have not yet been released by the Canada Revenue Agency but, once published, will be available on the Agency’s website at https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later.html) list the most common statutory credits claimed by taxpayers, including the basic personal credit, the spousal credit amount and the age amount. Adding amounts claimed on each form gives the Total Claim Amounts (one federal, one provincial) which the employer then uses to determine, based on tables issued by the CRA, the amount of income tax which should be deducted (or withheld) from each of the employee’s paycheques and remitted on his or her behalf to the federal government.
While the TD1 completed by the employee at the time his or her employment commenced will have accurately reflected the credits claimable by the employee at that time, everyone’s life circumstances change. Where a baby is born, or a son or daughter starts post-secondary education, a taxpayer turns 65 years of age, or an elderly parent comes to live with his or her children, the affected taxpayer will be become eligible to claim tax credits not previously available. And, since the employer can only calculate source deductions based on information provided to it by the employee, those new credit claims won’t be reflected in the amounts deducted at source from the employee’s paycheque.
Consequently, it’s a good idea for all employees to review the TD1 form prior to the start of each taxation year and to make any changes needed to ensure that a claim is made for any and all credit amounts currently available to him or her. Doing so will ensure that the correct amount of tax is deducted at source throughout the year.
As well, it’s often the case that a taxpayer will have available deductions which cannot be recorded on the TD1, like RRSP contributions, deductible support payments or child care expenses. While such claims make things a little more complicated, it’s still possible to have source deductions adjusted to accurately reflect those claims, and the employee’s resulting reduced tax liability for 2021. The way to do so is to file Form T1213 - Request to Reduce Tax Deductions at Source (available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html) with the Agency. Once that form is filed with the CRA, the Agency will, after verifying that the claims made are accurate, provide the employer with a Letter of Authority authorizing that employer to reduce the amount of tax being withheld from the employee’s paycheque.
Of course, as with all things bureaucratic, having one’s source deductions reduced by filing a T1213 takes time. While a T1213 can be filed with the CRA at any time of the year, the sooner it’s done, the sooner source deductions can be adjusted, effective for all subsequent paycheques. Providing an employer with an updated TD1 for 2021 as soon as possible, along with filing the T1213 with the CRA, will ensure that source deductions made starting January 1, 2021 will accurately reflect all of the employee’s current circumstances, and consequently his or her actual tax liability for the year.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
During the month of December, it’s customary for employers to provide something “extra” for their employees, by way of a holiday gift, a year-end bonus or an employer-sponsored social event. And while the annual office holiday party definitely won’t be happening in 2020, employees may still be able to look forward to something additional in the way of compensation during the last month of the year.
During the month of December, it’s customary for employers to provide something “extra” for their employees, by way of a holiday gift, a year-end bonus or an employer-sponsored social event. And while the annual office holiday party definitely won’t be happening in 2020, employees may still be able to look forward to something additional in the way of compensation during the last month of the year.
It’s certainly the case that employers who provide such extras don’t intend to create a tax liability for their employees. Unfortunately, it’s also the case that a failure to properly structure such gifts or other extras can result in unintended and unwelcome tax consequences to those employees.
Trying to formulate and administer the tax rules around holiday gifts is something of a no-win situation for the Canada Revenue Agency. On an individual or even a company level, the amounts involved are usually small, or even nominal, and the range of situations which must be addressed by the related tax rules are virtually limitless. As a result, the cost of drafting and administering those rules can outweigh the revenue generated by the enforcement of such rules, to say nothing of the potential ill will generated by imposing tax consequences on holiday gifts. Notwithstanding, the potential exists for employers to provide what would otherwise be taxable remuneration in the guise of holiday gifts, and it’s the responsibility of the tax authorities to ensure that such situations don’t slip through the tax net.
There is, as a result, a detailed set of rules which outline the tax consequences of gifts and awards provided by the employer. The starting point for the rules is that any gift (cash or non-cash) received by an employee from his or her employer at any time of the year is considered to constitute a taxable benefit, to be included in the employee’s income for that year. However, the CRA makes an administrative concession in this area, allowing non-cash gifts (within a specified dollar limit) to be received tax-free by employees, as long as such gifts are given on religious holidays such as Christmas or Hanukkah, or on the occasion of a significant life event, like a birthday, a marriage or the birth of a child.
In sum, the CRA’s administrative policy is simply that non-cash gifts to an arm’s length employee, regardless of the number of such gifts, will not be taxable if the total fair market value of all such gifts (including goods and services tax or harmonized sales tax) to that employee is $500 or less annually. The total value over $500 annually will be a taxable benefit to the employee, and must be included on the employee’s T4 for the year, and on which income tax must be paid.
It’s important to remember the “non-cash” criterion imposed by the CRA, as the $500 per year administrative concession does not apply to what the CRA terms “cash or near-cash” gifts and all such gifts are considered to be a taxable benefit and included in income for tax purposes, regardless of amount. For this purpose, the CRA considers anything which could be easily converted to cash as a “near-cash” gift. Even a gift or award which cannot be converted to cash will be considered to be a near-cash gift if, in the CRA’s words, it “functions in the same way as cash”. So, a gift card or gift certificate which can be used by the employee to purchase his or her choice of merchandise or services would be considered a near-cash gift, and taxable as such. It’s not hard to see that drawing a firm line between cash and non-cash gifts can be difficult. The CRA provides the following information and examples to help clarify that difference.
You give your employee a voucher (which may be a ticket or a certificate) that entitles the employee to receive an item for a set value at a store. For example, you may give your employees a voucher for a turkey valued up to $30 as a Christmas gift, and for convenience, you arrange for your employees to go to a particular grocery store and exchange the voucher for a turkey. The employees can only use the voucher to receive a turkey valued up to $30 (no substitutes). Such vouchers are generally considered non cash gifts.
You give your employee a $100 gift card or gift certificate to a department store. The employee can use this to purchase whatever merchandise or service the store offers. We consider the gift card or gift certificate to be an additional remuneration that is a taxable benefit for the employee because it functions in the same way as cash.
It may seem nearly impossible to plan for employee holiday gifts and other benefits without running afoul of one or more of the detailed rules and administrative policies surrounding the taxation of such gifts and benefits. However, designing a tax-effective plan is possible, if the following rules are kept in mind.
Any cash or near-cash gifts should be avoided, as they will, no matter how large or small the amount, create a taxable benefit to the employee. Although gift certificates or pre-paid credit cards are a popular choice, they aren’t a tax-effective one, as they will invariably be considered by the CRA to create a taxable benefit to the employee.
Where non-cash holiday gifts are provided to employees, gifts with a value of up to $500 can be received free of tax. The employer must be mindful of the fact that the $500 limit is a per-year and not a per-occasion limit. Where the employee receives non-cash gifts with a total value of more than $500 in any one taxation year, the portion over $500 is a taxable benefit to the employee.
While the rules around employer gifts aren’t complex, it is necessary to consider carefully the kinds of gifts which are given and to be mindful of the annual $500 per employee limit on non-cash gifts. At the end of the day, a gift which results in unintended and unwanted tax consequences to the employee will leave the employer looking a lot less like Santa and a lot more like Scrooge!
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
While Canadians benefit from a publicly funded health care system, there are nonetheless a significant (and increasing) number of medical and para-medical expenses which are not covered by provincial health care plans. As well, an increasing number of Canadians – who may work on contract or who hold several part-time jobs - do not have private insurance coverage for such costs through their employer.
While Canadians benefit from a publicly funded health care system, there are nonetheless a significant (and increasing) number of medical and para-medical expenses which are not covered by provincial health care plans. As well, an increasing number of Canadians – who may work on contract or who hold several part-time jobs - do not have private insurance coverage for such costs through their employer.
In many instances, therefore, Canadians have to pay for such unavoidable expenditures – including dental care, prescription drugs, ambulance trips and many other para-medical services, like physiotherapy, on an out-of-pocket basis. The good news is that where such costs must be paid for partially or entirely by the taxpayer, the tax system provides a medical expense tax credit to help offset those costs. The bad news is that the computation of such expenses and, in particular, the timing of making a claim for the credit, can be confusing. In addition, the determination of what expenses qualify for the credit and which do not isn’t necessarily intuitive, nor is the determination of when it’s necessary to obtain prior authorization from a medical professional in order to ensure that the contemplated expenditure will qualify for the credit.
The basic rule is that qualifying medical expenses (a lengthy list of which can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return.html) over 3% of the taxpayer’s net income, or $2,397, whichever is less, can be claimed for purposes of the medical expense tax credit on the taxpayer’s return for 2020.
Put in more practical terms, the rule for 2020 is that any taxpayer whose net income is less than $79,900 will be entitled to claim medical expenses that are greater than 3% of his or her net income for the year. Those having income over $79,900 will be limited to claiming qualifying expenses which exceed the $2,397 threshold.
The other aspect of the medical expense tax credit which can cause some confusion is that it’s possible to claim medical expenses which were incurred prior to the current tax year, but weren’t claimed on the return for the year that the expenditure was made. The actual rule is that the taxpayer can claim qualifying medical expenses incurred during any 12-month period which ends in the current tax year, meaning that each taxpayer must determine which 12-month period ending in 2020 will produce the greatest amount eligible for the credit. That determination will obviously depend on when medical expenses were incurred so there is, unfortunately, no universal rule of thumb which can be used.
Medical expenses incurred by family members – the taxpayer, his or her spouse, children who were born in 2003 or later, and certain other dependent relatives - can be added together and claimed by one member of the family. In most cases, it’s best, in order to maximize the amount claimable, to make that claim on the tax return of the lower income spouse, where that spouse has tax payable for the year.
As December 31st approaches, it’s a good idea to add up the medical expenses which have been incurred during 2020, as well as those paid during 2019 and not claimed on the 2019 return. Once those totals are known, it will be easier to determine whether to make a claim for 2020 or to wait and claim 2020 expenses on the return for 2021. And, if the decision is to make a claim for 2020, knowing what medical expenses were paid, and when, will enable the taxpayer to determine the optimal 12-month period for that claim.
It’s worth noting that, for many Canadians, 2020 has been a year in which income was reduced, owing to temporary layoffs or even permanent job loss. Where income is lower (assuming such income is below the $79,900 threshold), the extent to which qualifying medical expenses incurred during the year will be claimable for purposes of the medical expense tax credit increases. Take, for example, an individual who was laid off for three months during 2020 and who has incurred $2,500 in eligible medical expenses. If that individual’s income for 2020 is $30,000, he or she will be able to claim $1,600 of those expenses for purposes of the medical expense tax credit. If the individual returns to full employment in 2021 and earns $40,000, he or she will be able to claim only $1,300 of those eligible medical expenses on the return for 2021.
Finally, it’s a good idea to look into the timing of medical expenses which will have to be paid early in 2021. Where those are significant expenses (for instance, a particularly costly medication which must be taken on an ongoing basis) it may make sense, where possible, to accelerate the payment of those expenses to December 2020, where that means they can be included in 2020 totals and claimed on the 2020 return.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Canadian Emergency Response Benefit
In March of this year, in response to the pandemic, the federal government announced and rolled out a number of benefit programs to assist individuals who had experienced a pandemic-related interruption in earnings.
Canadian Emergency Response Benefit
In March of this year, in response to the pandemic, the federal government announced and rolled out a number of benefit programs to assist individuals who had experienced a pandemic-related interruption in earnings.
The most widely used of those benefits was the Canada Emergency Response Benefit, or CERB, which was received by over 8 million individual Canadians. That CERB benefit, of $500 per week, ran from mid-March until the end of September, meaning that those who were eligible for CERB for that entire period could have received as much as $14,000.
When the CERB program was launched, the priority for the federal government was getting the benefit into the hands of Canadian as quickly as possible. Consequently, although the CERB represented taxable income to those who received it, no tax was deducted from the benefits paid. As a result, anyone who received CERB (and did not repay it) will receive a T4A slip for that income, will need to report it on their income tax return for 2020 and will have to pay tax on that income when the return is filed in the spring of 2021.
While that filing and payment deadline is still months away, it would be prudent for CERB recipients to at least determine how much tax will be payable and to start to make provision for setting that money aside. The amount of tax owed on CERB benefits will depend, of course, on the amount of benefit received, but also on the taxpayer’s total income for 2020 and on the province or territory in which the taxpayer resides.
Taxpayers can arrive at a rough estimate the amount of federal tax payable on their CERB benefits as follows:
- For taxpayers having income for 2020 from all sources of less than $50,000, the percentage of tax payable on CERB received will be 15%.
- For taxpayers having income for 2020 from all sources of between $50,000 and $100,000, the percentage of tax payable on CERB received will be 20.5%.
- For taxpayers having income for 2020 from all sources of between $100,000 and $150,000, the percentage of tax payable on CERB received will be 26%.
- For taxpayers having income for 2020 from all sources of between $150,000 and $214,400, the percentage of tax payable on CERB received will be 29%.
- For taxpayers having income for 2020 from all sources of more than $214,400, the percentage of tax payable on CERB received will be 33%.
Of course, in each case, provincial or territorial tax must be added to arrive at the total tax payable on CERB amounts received. The provincial and territorial tax rates which apply for 2020 at different income levels can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html#provincial.
Home office expenses
One of the hallmarks of 2020 has been the number of Canadians working from home. A work-from-home arrangement has many benefits, and one of the less known of those benefits is the ability to claim a tax deduction on the 2020 tax return for household costs that would have been incurred in any event.
In order to claim a deduction for costs related to a work from home space, employees must meet at least one of the following conditions.
- The home work space is where the individual mainly (more than 50% of the time) does their work; or
- the individual uses the workspace only to earn his or her employment income. He or she must also use it on a regular and continuous basis for meeting clients, customers, or other people in the course of his or her employment duties.
To establish that the required circumstances exist, and that the employee is not receiving an allowance or a reimbursement for home office expenses from the employer it’s necessary to have a particular form completed and signed by that employer. That form, the T2200, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2200.html.
Once the requisite criteria are met, and certified by the employer on the T2200, a broad range of costs become deductible by the employee. Specifically, a salaried employee can claim and deduct the part of specified costs that relate to his or her work space, such as the cost of electricity, heating and home maintenance.
Where an individual who qualifies under either of the criteria outlined above is a commission employee, an even broader range of costs become deductible. In addition to costs for electricity, heating and home maintenance, a commission employee can also deduct a proportionate share of costs incurred for property taxes and home insurance.
There is no specific formula provided for determining the proportion of eligible costs which can be deducted for qualifying home office expenses. The employee can determine that percentage based on the square footage of the workspace as a percentage of the overall square footage of the home, or he or she can make that calculation based on the number of rooms in the house or apartment relative to the number of rooms used for work-related purposes. Whichever method is chosen, the most important consideration is that the approach taken (and the expenses claimed) be reasonable. In all cases, the Canada Revenue Agency can ask the taxpayer to provide documentation and support for claims made.
In order to determine the amount of any deduction for eligible home office expenses which can be claimed on the return for 2020, it’s necessary to gather together bills and receipts for the various expense categories (utilities bills, property tax notices etc.). It’s a tedious and sometimes time-consuming task, but necessary both in order to determine the amount of any available deduction and to have the required documentation for that deduction available should the CRA ask to see it. The T2200 signed by the employer does not have to be filed with the return, but should also be kept as part of that documentation.
RRSP contributions to be made by the calendar year-end
Most Canadians, even those who aren’t particularly familiar with our tax system, know that contributions to one’s registered retirement savings plan (RRSP) must be made by the end of February to be claimed as a deduction on the return for the previous calendar year.
There are, however, two instances in which making an RRSP contribution before the end of the calendar year is either necessary or advisable.
The first such instance affects Canadians who turn 71 years of age during 2020. Each of those individuals must collapse their RRSP by the end of 2020 – usually by converting the RRSP into a registered retirement income fund (RRIF) or by purchasing an annuity. An individual who turns 71 during the year is still entitled to make a final RRSP contribution for that year, assuming that he or she has sufficient contribution room. However, in such cases, the 60-day window for contributions after December 31st is not available. Any RRSP contribution to be made by a person who turns 71 during the year must be made by December 31st of that year.
The other instance in which it is advisable to make the contribution before December 31 relates to spousal RRSP contributions. Under Canadian tax rules, a taxpayer can make a contribution to a registered retirement savings plans (RRSP) in his or her spouse’s name and claim the deduction for the contribution on his or her own return. When the funds are withdrawn by the spouse, the amounts are taxed as the spouse’s income, at a (presumably) lower tax rate. However, the benefit of having withdrawals taxed in the hands of the spouse is available only where the withdrawal takes place no sooner than the end of the second calendar year following the year in which the contribution is made. Therefore, where a contribution to a spousal RRSP is made in December of 2020, the contributor can claim a deduction for that contribution on his or her return for 2020. The spouse can then withdraw that amount as early as January 1, 2023 and have it taxed in his or her own hands. If the contribution isn’t made until January or February of 2021, the contributor can still claim a deduction for it on the 2020 tax return, but the amount won’t be eligible to be taxed in the spouse’s hands on withdrawal until January 1, 2024. It’s an especially important consideration for couples who are approaching retirement who may plan on withdrawing funds in the relatively new future. Even where that’s not the situation, making the contribution before the end of the calendar year will ensure maximum flexibility should the need for an unplanned withdrawal arise.
Adjusting the final individual income tax instalment
It’s also possible for some taxpayers to adjust the amount of remaining tax they will pay for 2020. The majority of Canadians pay their taxes by having those taxes deducted by their employer from their regular paycheque and submitted to the Canada Revenue Agency on their behalf. However, there are millions of taxpayers who pay income taxes by quarterly instalments, with the amount of those instalments representing an estimate of the taxpayer’s total liability for the year.
The final quarterly instalment for this year will be due on Tuesday December 15, 2020. By that time, almost everyone will have a reasonably good idea of what his or her income and deductions will be for 2020 and so will be in a position to estimate what the final tax bill for the year will be, taking into account any tax planning strategies already put in place, as well as any RRSP contributions which will be made on or before March 1, 2021. While the tax return forms to be used for the 2020 year haven’t yet been released by the Canada Revenue Agency, it’s possible to arrive at an estimate by using the 2019 form. Increases in tax credit amounts and tax brackets from 2019 to 2020 will mean that using the 2019 form will likely result in a slight over-estimate of tax liability for 2020.
Once an estimate of one’s tax bill for 2020 has been calculated, that figure should be compared to the total of tax instalments already made during this calendar year (that figure can be obtained by calling the CRA’s Individual Income Tax Enquiries line at 1-800-959-8281). Depending on the result, it may then be possible to reduce the amount of the tax instalment to be paid on December 15 – and thereby free up some funds for the inevitable holiday spending!
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit for qualifying donations made.
Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit for qualifying donations made.
Federally, taxpayers can claim a credit of 15% of the first $200 in donations plus 29% of donations over the $200 threshold. In all cases, in order to claim a credit for a donation in a particular tax year, that donation must be made by the end of that calendar year — there are no exceptions.
There is, however, another reason to ensure donations are made by December 31. The credit provided by the federal government is a two-level credit, in which the percentage credit claimable increases with the amount of donation made. For federal tax purposes, the first $200 in donations is eligible for a non-refundable tax credit equal to 15% of the donation. The credit for donations made during the year which exceed the $200 threshold is, however, calculated as 29% of the excess. Where the taxpayer making the donation has taxable income (for 2020) over $214,368, charitable donations above the $200 threshold can receive a federal tax credit of 33%.
As a result of the two-level credit structure, the best tax result is obtained when donations made during a single calendar year are maximized. For instance, a qualifying charitable donation of $400 made in December 2020 will receive a federal credit of $88 ($200 ×15% + $200 × 29%). If the same amount is donated, but the donation is split equally between December 2020 and January 2021, the total credit claimable is only $60 ($200 ×15% + $200 × 15%), and the 2021 donation can’t be claimed until the 2021 return is filed in April 2022. And, of course, the larger the donation in any one calendar year, the greater the proportion of that donation which will receive credit at the 29% level rather than the 15% level.
It is also possible to carry forward, for up to 5 years, donations which were made in a particular tax year. So, if donations made in 2020 don’t reach the $200 level, it is usually worth holding off on claiming the donation and carrying forward to the next year in which total donations, including carryforwards, are over that threshold. Of course, this also means that donations made but not claimed in any of the 2015, 2016, 2017, 2018, or 2019 tax years can be carried forward and added to the total donations made in 2020, and the aggregate then claimed on the 2020 tax return.
When claiming charitable donations, it is possible to combine donations made by oneself and one’s spouse and claim them on a single return. Generally, and especially in provinces and territories which impose a high-income surtax — currently, Ontario and Prince Edward Island — it makes sense for the higher income spouse to make the claim for the total of charitable donations made by both spouses. Doing so will reduce the tax payable by that spouse and thereby minimize (or avoid) liability for the provincial high-income surtax.
Since the charitable donations tax credit is a two-level credit, in which the credit percentage increases once donations made in a year exceed $200, it always makes sense to aggregate donations in a single year, so as to maximize the amount of credit claimable.
Any charity seeking or receiving a donation should be able to provide a registered charitable number, and a searchable current listing of registered charities can be found on the Canada Revenue Agency website at https://apps.cra-arc.gc.ca/ebci/hacc/srch/pub/dsplyBscSrch?request_locale=en. Information on the charitable donations tax credit is available on the same website at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/349/menu-eng.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The Canadian tax system is a “self-assessing system” which relies heavily on the voluntary co-operation of taxpayers. Canadians are expected (in fact, in most cases, required), to complete and file a tax return each spring, reporting income from all sources, calculating the amount of tax owed and remitting that amount to the federal government by a specified deadline. Although the rate of compliance among Canadian taxpayers is very high — just over 30 million individual income tax returns for the 2019 tax year were filed with the Canada Revenue Agency (CRA) between February and October of 2020 — there are, inevitably, those who do not either file or pay on time.
The Canadian tax system is a “self-assessing system” which relies heavily on the voluntary co-operation of taxpayers. Canadians are expected (in fact, in most cases, required), to complete and file a tax return each spring, reporting income from all sources, calculating the amount of tax owed and remitting that amount to the federal government by a specified deadline. Although the rate of compliance among Canadian taxpayers is very high — just over 30 million individual income tax returns for the 2019 tax year were filed with the Canada Revenue Agency (CRA) between February and October of 2020 — there are, inevitably, those who do not either file or pay on time.
There are a lot of reasons why individual Canadians don’t file their returns or pay their taxes on a timely basis, and almost all of them are based on a lack of understanding of how our tax system works, or on incorrect information about that system. In addition, there are a number of Canadians who file returns in which income amounts are underreported and/or deductions or credits to which that taxpayer is not entitled are claimed.
While the overall percentage of taxpayers who don’t file or pay on time, or who file returns which are not accurate isn’t high, there are a lot of such returns when measured by absolute numbers. And, although each such instance of non-compliance represents lost revenue to the Canadian government, the resources needed to track down each and every instance of non-compliance simply aren’t available, especially since, in many cases, the amount recovered may be less than the costs which must be incurred to recover that amount.
With all of that in mind, several years ago the CRA instituted a program — the Voluntary Disclosure Program, of VDP — intended to encourage non-compliant taxpayers to come forward and put their tax affairs in order. The incentive to do so arose from the fact that, in most cases, while taxpayers who participate in the VDP program have to pay outstanding tax amounts owed, plus interest, they avoid the penalties which would normally be imposed and, in addition, avoid the risk of criminal prosecution.
To qualify for relief under the VDP, an application made with respect to non-compliance with income tax filing and payment obligations must:
- be voluntary (meaning that it is done before the taxpayer becomes aware of any compliance or enforcement action by the CRA);
- be complete;
- involve the application or potential application of a penalty;
- include information that is at least one year past due; and
- include payment of the estimated tax owing.
The VDP program includes two separate “tracks” for income tax disclosures — the Limited Program and the General Program — and the kind and extent of relief available depends on the track to which a particular application is assigned.
While the CRA will make a determination of whether an application should proceed under the Limited or the General Program on a case-by-case basis, there are guidelines in place. The CRA’s intention is to restrict the Limited Program to instances in which applications disclose non-compliance which appears to include intentional (as distinct from inadvertent) conduct on the part of the taxpayer. In making its determination of the appropriate track for a disclosure, the factors which the CRA will consider include the following:
- the dollar amounts involved;
- the number of years of non-compliance; and
- the sophistication of the taxpayer; and
- whether efforts were made to avoid detection through the use of offshore vehicles or other means.
Those whose applications are accepted under the Limited Program will not be subject to criminal prosecution and will be exempt from the more stringent penalties which usually apply in cases of gross negligence on the part of the taxpayer. Interest on outstanding tax balances will be payable, however, and other penalties will be levied.
Taxpayers whose conduct does not consign them to the Limited Program will instead be considered under the General Program. Under that Program, no penalties will be charged and no criminal prosecutions will take place. As well, the CRA will provide partial interest relief, specifically for the years preceding the three most recent years of non-compliance — i.e., for the years preceding the three most recent years of returns required to be filed. For example, a taxpayer who makes an application to the VDP and who has failed to file returns for the 2013 through 2018 taxation years may be provided with interest relief with respect to taxes owed for the 2013, 2014, and 2015 taxation years. Such relief is generally equal to 50% of interest owed — in other words, the taxpayer will be required to pay only half of the interest charges which would otherwise be levied for those years. No interest relief will, however, be provided on tax amounts owed for the three most recent (2016, 2017, and 2018) taxation years. Since interest charges levied by the CRA are, by law, higher than current commercial rates (for instance, the rate levied for the fourth quarter of 2020 is 5%) and interest charged is compounded daily, having interest amounts forgiven, even in part, can make a significant difference to the overall tax bill faced by the taxpayer.
In order to benefit from the VDP, taxpayers must first make an application to the program. That application must include payment of the estimated taxes owing, as a condition of participation in the VDP. Where a taxpayer is financially unable to make that tax payment, he or she can request that the CRA consider a payment arrangement.
The decision to apply to the VDP and to “come clean” about all previous tax transgressions is something that most taxpayers will likely consider with considerable trepidation. Those who are unsure about whether they want to move forward with a VDP application have the option of using the CRA’s “pre-disclosure discussion service”. As the name implies, that service allows taxpayers to participate in preliminary discussions with a CRA official, on an anonymous basis, to gain some knowledge about the VDP program, the process involved, and the potential relief available.
Taxpayers who decide to move forward with an application to the VDP can complete and file Form RC199, Voluntary Disclosures Program Application, which is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc199.html. Once the application is received, the CRA will check to make certain that the applicant is eligible to apply and that all of the required information, documentation, and payment has been sent. The next step is for the CRA to evaluate the application to ensure that the criteria for participation in the VDP are satisfied and, if so, to determine the program (Limited or General) to which the application should be assigned, and the taxation year(s) for which relief is being considered. At each step the taxpayer will be provided with written notice of the CRA’s decisions. The CRA’s advice is that taxpayers should contact them (for individual taxpayers, by calling the Individual Income Tax Enquiries line at 1-800-959-8281) if they have not heard from the CRA within four or five weeks of submitting an application.
If the decision made is that the application is not eligible for the VDP, the taxpayer will also be advised in writing, with reasons, of the CRA’s decision to deny the application.
Where the decision made by the CRA is one with which the taxpayer does not agree, he or she is entitled to ask for a second review of the application. If that decision is also unfavourable, it is possible for a taxpayer to ask a court to review the decision and direct the CRA to re-consider the VDP application. However, a taxpayer who wishes to pursue his or her application to the extent of filing such a court application is well advised to obtain legal advice before doing so.
Finally, taxpayers should recognize that the VDP Program can’t be used as a kind of “get out of jail free card” with respect to repeated failures to meet tax filing and payment obligations. The CRA website makes it clear that the CRA expects taxpayers who have benefitted from the VDP to thereafter meet their tax obligations, and a second review will be provided for the same taxpayer only in unusual situations where the circumstances are beyond the taxpayer’s control.
Detailed information on the VDP program can be found on the CRA website at https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
One of the more unexpected effects of the current pandemic has been the impact on the Canadian real estate market. In each of July, August, and September 2020 the number of home sales, especially in major cities, has set a year-over-year record and, in many of the same places, the vacancy rate for rental accommodation has gone up.
One of the more unexpected effects of the current pandemic has been the impact on the Canadian real estate market. In each of July, August, and September 2020 the number of home sales, especially in major cities, has set a year-over-year record and, in many of the same places, the vacancy rate for rental accommodation has gone up.
There are a number of possible explanations for the surge in real estate sales. Interest rates are at historic lows — a five-year mortgage can be obtained for a rate of less than 2%. As well, pre-pandemic, Canadians generally sought to live as close as possible to their workplaces, in order to minimize the cost and time involved in the daily commute. Now that millions of Canadians are working from home (and the likelihood that such arrangements will continue for some time to come, or even become permanent) it’s become possible for them to move further out from the major urban centres, where it’s also usually possible to buy a bigger house for less money.
The other driver of changes in the real estate market is less positive — as many Canadians have lost their jobs or had their hours and therefore their income reduced, their changed financial circumstances have forced a move to find new employment.
For any number of reasons, a lot of Canadians will be moving this fall. And, whatever the reason for the move or the distance to the new location, all moves have two things in common — stress and cost. Even where the move is a desired one, moving inevitably means upheaval of one’s life and the costs can be very significant. There is not much that can diminish the stress of moving, but the associated costs can be offset somewhat by a tax deduction which may be claimed for many of those costs.
While it’s common to refer simply to the “moving expense deduction”, as though it were available in all circumstances, the fact is that there is actually no across-the-board deduction available for moving costs. In order to be tax deductible, such moving costs must be incurred in specific and relatively narrow circumstances. Our tax system allows taxpayers to claim a deduction only where the move is made to get the taxpayer closer to his or her new place of work, whether that work is a transfer, a new job, or self-employment. Specifically, moving expenses can be deducted where the move is made to bring the taxpayer at least 40 kilometres closer to his or her new place of work. That requirement is satisfied where, for instance, a taxpayer moves from Toronto to Halifax to take a new job. It is also met where a taxpayer is transferred by his or her employer to another job in a different location and the taxpayer’s move will bring him or her at least 40 kilometres closer to the new work location. It’s not met where an individual or family move up the property ladder by selling and purchasing a new home in the same town or city, without any change in work location.
It is not, as well, actually necessary to be a homeowner in order to claim moving expenses. The list of moving-related expenses which may be deducted is basically the same for everyone — homeowner or tenant — who meets the 40-kilometre requirement. Students who move to take a summer job (even if that move is back to the family home) can also make a claim for moving expenses where that move meets the 40-kilometre requirement.
It is important to remember, however, that even where the 40-kilometre requirement is met, it is possible to deduct moving costs only from employment or self-employment (business) income — there is no deduction possible from other types of income, like investment income or employment insurance benefits.
The general rule is that a taxpayer can claim reasonable amounts that were paid for moving himself or herself, family members, and household effects. In all cases, the moving expenses must be deducted from employment or self-employment income earned at the new location. Where the move takes place later in the year, and moving costs are significant, it is possible that the amount of income earned at the new location in the year of the move will be less than deductible moving expenses incurred. In such instances, those expenses can be carried over and deducted from income earned at the new location in any future year.
Within the general rule, there are a number of specific inclusions, exclusions, and limitations. The following is a list of expenses which can be claimed by the taxpayer without specific dollar figure restrictions (but subject, as always, to the overriding requirement of “reasonableness”).
- traveling expenses (including vehicle expenses), meals, and accommodation, to move the taxpayer and members of his or her family to their new residence (note that not all members of the household have to travel together or at the same time);
- transportation and storage costs (such as packing, hauling, movers, in-transit storage, and insurance) for household effects, including such items as boats and trailers;
- costs for up to 15 days for meals and temporary accommodation near the old and the new residences for the taxpayer and members of the household;
- lease cancellation charges (but not rent) on the old residence;
- legal or notary fees incurred for the purchase of the new residence, together with any taxes paid for the transfer or registration of title to the new residence (excluding GST or HST);
- the cost of selling the old residence, including advertising, notary or legal fees, real estate commissions, and any mortgage penalties paid when a mortgage is paid off before maturity; and
- the cost of changing an address on legal documents, replacing driving licences and non-commercial vehicle permits (except insurance), and costs related to utility hook-ups and disconnections.
When real estate markets are slow, or a move must be made in a short time frame, it sometimes happens that a move to the new home takes place before the old residence is sold. In most such circumstances, the taxpayer is entitled to deduct up to $5,000 in costs incurred for the maintenance of that residence while it is vacant and efforts are being made to sell it. Specifically, costs including interest, property taxes, insurance premiums, and heat and utilities expenses paid to maintain the old residence while efforts were being made to sell it may be deducted. If any family members are still living at the old residence, or it is being rented, no such deduction is available. As well, a claim for such home maintenance expenses on a vacant house can be claimed only where reasonable efforts are being made to sell the property and is not permitted where the taxpayer delayed selling for investment purposes, or until the real estate market improved.
It may seem from the foregoing that virtually all moving-related costs will be deductible — however, there are some costs for which the Canada Revenue Agency (CRA) will not permit a deduction to be claimed, as follows:
- expenses for work done to make the old residence more saleable;
- any loss incurred on the sale of the old residence;
- expenses for job-hunting or house-hunting trips to another city (e.g., costs to travel to job interviews or meet with real estate agents);
- expenses incurred to clean or repair a rental residence to meet the landlord’s standards;
- costs to replace such personal-use items as drapery and carpets; and
- mail forwarding costs; and
- mortgage default insurance.
To claim a deduction for any eligible costs incurred, supporting receipts must be obtained. While the receipts do not have to be filed with the return on which the related deduction is claimed, they must be kept in case the CRA wants to review them.
Anyone who has ever moved knows that there are an endless number of details to be dealt with. For some types of costs, the administrative burden of claiming moving-related expenses can be minimized by choosing to claim a standardized amount for certain types of expenses. Specifically, the CRA allows taxpayers to claim a fixed amount, without the need for detailed receipts, for travel and meal expenses related to a move. Using that standardized, or flat rate method, taxpayers may claim up to $17 per meal, to a maximum of $51 per day, for each person in the household. Similarly, the taxpayer can claim a set per-kilometre amount for kilometres driven in connection with the move. The per-kilometre amount ranges from 48 cents for Alberta to 64.5 cents for the Northwest Territories. In all cases, it is the province or territory in which the travel begins which determines the applicable rate.
These standardized travel and meal expense rates are those which were in effect for the 2019 taxation year — the CRA will be posting the rates for 2020 on its website early in 2021, in time for the tax filing season.
Once eligibility for the moving expense deduction is established, the rules which govern the calculation of the available deduction are not complex, but they are very detailed. The best summary of those rules is found on the form used to claim such expenses — the T1-M. The current version of that form can be found on the CRA’s website at https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t1-m/t1-m-17e.pdf, and more information (including a link to rates for standardized meal and travel cost claims) is available at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/219/menu-eng.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Since the pandemic began early in 2020, and especially after many non-essential businesses were required to close temporarily as a public health measure, the federal government has brought forward a broad range of financial relief programs for both individuals and businesses.
Since the pandemic began early in 2020, and especially after many non-essential businesses were required to close temporarily as a public health measure, the federal government has brought forward a broad range of financial relief programs for both individuals and businesses.
Some of those programs, like the Canada Emergency Response Benefit, or CERB, were used by millions of individual Canadians to bridge a time of unemployment or reduced income. Other programs — like the Canada Emergency Commercial Rent Assistance Program — attracted less interest, for a variety of reasons.
As most of the country has now entered the second wave of the pandemic, the federal government has re-tooled, expanded, or extended three different relief programs for businesses — the Canada Emergency Rent Subsidy, the Canada Emergency Wage Subsidy and the Canada Emergency Business Account. While the type of assistance varies by program, the underlying purpose is the same —providing businesses with the financial assistance needed to keep their bills paid and keep their employees on the payroll until better times return.
Canada Emergency Rent Subsidy
While a fortunate few small businesses own their own premises, it is more often the case that the business premises are rented from a landlord and that, consequently, rent must be paid regardless of the open or closed state of the business.
In April of this year, the federal government announced the creation of the Canada Emergency Commercial Rent Assistance (CECRA) program. That program was structured such that the landlord was the one who applied for the benefit and, as a condition of receiving that benefit, was required to reduce the rent payable by the commercial tenant by a specific percentage over a specific time period. The CECRA program did not attract the level of participation sought and so the federal government has made some changes and re-introduced the benefit, effective September 27, 2020, as the new Canada Emergency Rent Subsidy, or CERS.
The most important change is that application for the CERS is now made by the tenant (which can include a business, non-profit organization, or charity) and the benefit is paid directly to that tenant. The amount of benefit payable will be based on the percentage of revenue loss experienced by the business, up to a maximum of 65% of eligible expenses, until December 19, 2020.
As the pandemic enters its second stage, required business closures are being implemented on a more localized and targeted basis, as distinct from the general lockdowns which were mandated in the spring of 2020. Recognizing that reality, the CERS program will provide a top-up subsidy of 25% for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority. Such top-up is in addition to the general subsidy of up to 65%.
Canada Emergency Wage Subsidy
The CEWS program, which was introduced in March of this year, provides eligible employers with a direct subsidy of up to a maximum of 65% of employee wages. The CEWS program was scheduled to end on December 19, 2020 but has instead been extended to be available until June 2021.
Canada Emergency Business Account (CEBA)
The CEBA program, as originally announced in April of this year, provided businesses and not-for-profits which have been seriously impacted by the pandemic with an interest-free loan of up to $40,000.
The program has now been expanded to allow for an additional interest free loan amount of $20,000. Where the business is able to repay that additional $20,000 by the end of 2022, half of that loan amount (i.e., $10,000) will be forgiven.
The CEBA program is intended to benefit those businesses which have been most affected by the pandemic and, in order to qualify for CEBA loans, such businesses will be required to provide an “attestation” of the impact which the pandemic has had on them.
The application deadline for CEBA has also been extended to December 31, 2020.
The rules governing eligibility for benefits and the amount of benefits which can be obtained under the numerous federal business pandemic relief programs are undeniably complex. In addition, the frequent changes made to such programs to adapt to changing circumstances have led to confusion, creating an additional hurdle to participation. To assist those businesses wishing to participate, the federal government has created program-specific webpages outlining in detail the rules and requirements of each such program and has also set up toll-free telephone lines which business owners can call to obtain clarification or answers to questions.
The starting point to obtain such information is the main webpage for business pandemic relief programs, which includes both links to more detailed information on each such program and specific toll-free numbers to call for additional information or clarification. That webpage can be found on the federal government website at https://www.canada.ca/en/services/business/maintaining-your-business.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.
Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.
They can be accessed below.
Corporate:
Personal:
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
When the state of emergency was declared in March of this year, the federal government extended the usual deadlines for both the filing of individual tax returns and payment of taxes owed, for both 2019 and 2020. Sometimes those deadlines (like the deadline for filing of individual income tax returns for 2019) were put off until June, but most such deadlines were deferred until September 30. A summary of the federal individual income tax deadlines which will fall this year on September 30 is set out below.
When the state of emergency was declared in March of this year, the federal government extended the usual deadlines for both the filing of individual tax returns and payment of taxes owed, for both 2019 and 2020. Sometimes those deadlines (like the deadline for filing of individual income tax returns for 2019) were put off until June, but most such deadlines were deferred until September 30. A summary of the federal individual income tax deadlines which will fall this year on September 30 is set out below.
Final payment of income taxes due for 2019
While the return for 2019 had to have been filed by June 1 (or June 15 for self-employed individuals and their spouses), payment of any income tax balance owed for 2019 is due on or before September 30. Where that payment deadline is not met, interest and penalty charges will be imposed.
As well, although the filing deadline for returns was in June, the Canada Revenue Agency (CRA) has indicated that late-filing penalties will not be imposed, as long as the required individual income tax return for 2019 is filed on or before September 30.
The payment deadline extension also applies to amounts owed with respect to final returns filed for individuals who died between January 1 and October 31, 2019. Where an individual died after October 2019 and before June 16, 2020, final payment is due by September 30, 2020, or six months after the date of death, whichever is later.
Finally, income tax balances and instalments due by trusts or corporations on or after March 18, 2020 and before September 30, 2020 are due on or before September 30.
Payment of income tax instalments for 2020
Canadian taxpayers who pay tax by quarterly instalments usually make those payments by the 15th day of March, June, September, and December.
Earlier this year, the CRA announced that the June 15 and September 15 instalment due dates would be postponed, and that both such instalment payments would be due and payable by September 30. Interest charges will not be levied where that September 30 payment deadline is met.
End of interest-free period
As part of its pandemic response, the CRA also announced that it was suspending the accumulation of interest charges on existing income tax debts effective as of April 1, 2020. That interest-free grace period ends on September 30 and the usual interest charges will once again be imposed (and begin to accumulate) as of October 1, 2020.
It is worth noting that interest on debts owed to the CRA is levied at higher than commercial rates, and that such interest charges are compounded daily, meaning that each day interest is levied on interest charges imposed on the previous day.
A full listing of the filing and payment deadlines for 2020 is provided on the CRA website at https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html#extend.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Of all the many financial relief programs introduced by the federal government to address the economic impact of the pandemic, probably none has had a bigger impact than the Canada Emergency Relief Benefit (CERB). As of August 16, nearly 9 million Canadians had applied for and received payments under the CERB program, and the program had paid out just over $70 billion.
Of all the many financial relief programs introduced by the federal government to address the economic impact of the pandemic, probably none has had a bigger impact than the Canada Emergency Relief Benefit (CERB). As of August 16, nearly 9 million Canadians had applied for and received payments under the CERB program, and the program had paid out just over $70 billion.
As the country emerges from the near complete economic lockdown which was in effect in the spring, the current financial situation of those who received CERB benefits will vary widely. Some may be back at work and earning the same income as they did pre-pandemic. Others may be back at work with reduced hours and, consequently, reduced income. Still others may still be waiting for their employer to call them back to work and some, unfortunately, may have worked for businesses which will never re-open.
Given the sheer number of CERB recipients, the economic impact of the termination of the CERB program on October 3, 2020 will be significant. In recognition of that fact, the federal government has announced three new programs intended to allow Canadians to transition from CERB. In addition, changes will be made to the Employment Insurance (EI) program which will make it easier for individuals to receive EI benefits.
The three new programs will allow Canadians whose income loss resulting from the pandemic continues to claim benefits, within prescribed limits, up until September 27, 2021. The particular program under which an individual may qualify depends on his or her particular circumstances — the programs and the qualifying criteria, as outlined on the federal government website, are summarized below.
Canada Recovery Benefit (CRB)
The CRB will provide $400 per week for up to 26 weeks to individuals who are self-employed or who are otherwise not eligible for EI and who still require income support, if they are available for and looking for work.
The CRB benefit would be available to Canadian residents who:
- are at least 15 years old and have a valid Social Insurance Number (SIN);
- have stopped working due to the pandemic and are available and looking for work, or are working but have had a reduction in their employment or self-employment income for pandemic-related reasons;
- are not eligible for Employment Insurance;
- had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; and,
- have not quit their job voluntarily.
There is provision for a clawback of CRB benefits received where the income of a recipient (excluding CRB payments) is greater than $38,000. In such circumstances, the recipient will be required to repay 50 cents of the benefit for each dollar of their annual net income above $38,000 in the calendar year, to a maximum of the amount of benefit they received.
The CRB would be payable (subject to the weekly maximum claim period of 26 weeks) until September 27, 2021.
Canada Recovery Sickness Benefit (CRSB)
As the name implies, the CRSB will be paid to individuals who must quarantine or self-isolate for two weeks for pandemic-related reasons. The benefit will be $500 per week for that two-week period.
To qualify for the benefit, an individual must:
- be a Canadian resident who is at least 15 years of age and has a valid SIN;
- be employed or self-employed at the time of the application; and
- have earned at least $5,000 in 2019 or in 2020.
Like the CRB, the CRSB will be paid (for a maximum two-week period) anytime before September 27, 2021.
Canada Recovery Caregiving Benefit (CRCB)
Once again, the name is self-explanatory. The CRCB will provide $500 per week, for up to 26 weeks, per household to eligible Canadians whose work availability has been reduced by at least 60% resulting from the need to provide caregiving services to their children or to disabled family members. The CRCB recognizes that the upcoming school year will look very different and that grade school children who would normally attend school on a full day, every day basis may well have a different schedule for pandemic-related reasons.
In order to be eligible for the CRCB, an individual must:
- reside in Canada;
- be at least 15 years of age on the first day of the benefit period for which they are applying;
- have a valid Social Insurance Number;
- be employed or self-employed on the day before the start of the benefit period;
- have earned at least $5,000 in 2019 or in 2020;
- have been unable to work for at least 60% of their normally scheduled work within a given week because they must take care of a child who is under 12 years of age on the first day of the benefit period because that child’s school or daycare is closed or operates under an alternative schedule for reasons related to the pandemic, or where that child cannot attend school or day care due to medical risks, or because the child’s usual caregiver is not available for pandemic related reasons;
- have been unable to work for at least 60% of their normally scheduled work within a given week because they are providing care to a family member with a disability or dependent because the dependent’s day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19, or the dependent cannot attend their day program or care facility due to medical risks, or because the dependant’s usual caregiver is not available for pandemic-related reasons;
- not be in receipt of paid leave from an employer in respect of the same week; and
- not be in receipt of the CERB, the EI Emergency Response Benefit, the CRB, the CRSB, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan benefits in respect of the same week.
In some cases, individuals who have lost jobs or had their income reduced as the result of the pandemic can qualify for Employment Insurance benefits. However, the EI system has very specific requirements and those requirements have the potential to exclude large numbers of workers, including those who were working part-time or on a short-term contract, or who live in areas of low unemployment. The changes which will be made to the EI system will provide greater flexibility and consequently allow more individuals to qualify for EI benefits.
Generally speaking, in order to qualify for EI benefits, an individual must have worked for a specified number of hours within a prescribed time frame (the qualifying period). The number of hours required depends on the unemployment rate in the location where the individual lives and, where the local unemployment rate is lower, the number of work hours required to qualify for EI increases. Finally, the amount of EI benefit which may be received is calculated as a percentage of weekly earnings received during the qualifying period. In order to ensure that EI benefits can be claimed by more Canadians, and that greater benefits can be received, the following changes will be made.
- The minimum unemployment rate for purposes of the EI program will be set at 13.1% in all locations, effective as of August 9, 2020; and
- Canadians who have at least 120 hours of insurable work will be able to qualify for EI benefits, as they will be provided with a temporary, one-time credit of:
- 300 insurable hours for those claiming EI regular benefits
- 480 insurable hours for those claiming EI special benefits (maternity, parental, sickness, compassionate care, and family).
Under the new rules, individuals who qualify for EI benefits will receive a minimum benefit of $400 per week in regular benefits and $240 per week for extended parental benefits.
The federal government’s intention is that individuals who need financial support as the result of a pandemic-related loss of income should turn first to the Employment Insurance program. Where EI benefits are not available to them, they may be eligible for one of the three new programs — the CRB, the CRSB, and the CCRB — which can provide a comparable level of financial support. It is important as well for recipients of any of these benefits, or of EI, to recognize that all such income received is taxable income, which must be reported as income on the tax return filed for the year in which it is received.
More detailed information on each of these programs, and the changes to the EI system is available on the federal government website at https://www.canada.ca/en/department-finance/economic-response-plan.html#individuals.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Most Canadians who participate in the paid work force do so as employees. Consequently, they receive a regular paycheque from their employer and they pay income taxes by means of amounts deducted from that paycheque and remitted to the federal government on their behalf.
Most Canadians who participate in the paid work force do so as employees. Consequently, they receive a regular paycheque from their employer and they pay income taxes by means of amounts deducted from that paycheque and remitted to the federal government on their behalf.
There are, however, a significant number of Canadians who fall outside that group — like retirees, or the self-employed — who must pay their taxes by some other method. That method is the payment of income tax through the instalment payment system.
The rule is that an individual is subject to the instalment payment requirement where his or her tax owed on filing for the current year and either of the two previous years is more than $3,000. In other words, the amount of tax collected from that individual throughout the year was at least $3,000 less than the actual tax owed for that year.
Canadian taxpayers who thus fall into the tax instalment payment system remit an amount to the federal government four times a year, by the 15th of March, June, September, and December. Where the amount remitted ends up being more than their actual tax liability for the year, the excess is returned to them in the form of a tax refund when they file their income tax return for the year. Where instalment amounts remitted are less than the taxpayer’s tax liability for the year, the balance owing must be paid when the return is filed.
Where a taxpayer is subject to the instalment requirement, the Canada Revenue Agency (CRA) sends them two “Instalment Reminders” each year (one in February, the second in August), setting out the amounts to be paid on each upcoming due date. Regardless of the type or amount of his or her income for the year, or the amount of any instalment payments, the options available to the recipient of an Instalment Reminder are the same. On its website, the CRA describes the three different payment options open to taxpayers, and outlines the benefits and risks of each option in different circumstances, as follows:
No-calculation option
This option is best for you if your income, deductions, and credits stay about the same from year to year.
We will give the no-calculation option amount on the instalment reminders that we will send you. We determine the amount of your instalment payments based on the information in your latest assessed tax return.
Prior-year option
This option is best for you if your 2020 income, deductions, and credits will be similar to your 2019 amount but significantly different from those in 2018.
You determine the amount of your instalment payments based on the information from your tax return for the 2019 tax year. Use the calculation chart found at https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/Instalment-chart-fill-20e.pdf to help you calculate your total instalment amount due.
If you use the prior-year option and make the payments in full by their 2020 due dates, we will not charge instalment interest or a penalty unless the total instalment amount due you have calculated is too low. For more information, see Instalment interest and penalty charges.
Current-year option
This option is best for you if your 2020 income, deductions, and credits will be significantly different from those in 2019 and 2018.
You determine the amount of your instalment payments based on your estimated current-year (2020) net tax owing, any CPP contributions payable, and any voluntary EI premiums. Use the calculation chart (https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/Instalment-chart-fill-20e.pdf) to help you calculate your total instalment amount due.
If you use the current-year option and make the payments in full by their 2020 due dates, we will not charge instalment interest or a penalty unless the amounts you estimated when calculating your total instalment amount due were too low. For more information, see Instalment interest and penalty charges.”
The first option — paying the amounts identified on the Instalment Reminder by the identified deadlines — is the easiest and simplest choice. If the total instalment amounts paid during the year represent an overpayment of taxes for 2020, the taxpayer will receive a refund of that overpayment on filing in the spring of 2021. If the amounts identified turn out be an underpayment of tax (in that they are insufficient to cover total tax owed for the year), the taxpayer will have a balance owing on filing. In no case, however, will the taxpayer be charged any interest on insufficient instalment payments.
Taxpayers who don’t wish to pay the amounts specified in the Instalment Reminder (perhaps because they believe that such amounts don’t accurately reflect their tax payable for the year) can use options 2 or 3. The only risk to doing so is that, should the instalments paid be insufficient to cover tax liability for the year, interest will be levied on the underpayments.
While the instalment payment system works well in most instances, this year it has been altered by the circumstances of the pandemic. In many ways those changes have been beneficial for the taxpayer, since they push payment deadlines off to a later date. However, the changes can make it difficult to determine just what amount needs to be remitted, and when.
Initially, the usual June 15 due date for the June instalment remittance was deferred until September 1. More recently, the CRA announced that that deadline would be pushed back again, to September 30, 2020 and that the instalment remittance normally due on September 15 would also not be due until September 30.
Owing to the postponement of payment dates, the instalment payment amount for June 15 (found on the instalment reminder sent out in February) and the amount for September 15 (found on the second instalment reminder sent in August) are both due and payable by September 30, 2020.
The CRA recently posted a notice on its website alerting taxpayers to the fact that some second instalment reminder notices for 2020 (that is, those sent out in August) identify the September payment due date as September 15. That is now incorrect, and the actual deadline for payment is September 30.
While all of this can seem somewhat confusing, the steps to be taken by a taxpayer who receives an Instalment Reminder haven’t really changed. He or she must first determine whether to make an instalment payment, and in what amount, based on the considerations outlined above in the three available options. Second, he or she must pay the June and September instalment amounts on or before Wednesday, September 30. Barring any further announcements, the December instalment will be due on the usual instalment due date of December 15, 2020.
More detailed information on the instalment payment system, including the payment methods available to taxpayers who receive an Instalment Reminder, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
It’s an acknowledged reality that times of crisis bring out both the best and the worst in people. While most Canadians would never consider using the current pandemic as a means of defrauding others, this is not, unfortunately, true of everyone.
This is a time when Canadians are particularly vulnerable to scammers and fraud artists, for a number of reasons. First, of course, is the financial dislocation which has resulted from the pandemic — many Canadians have lost income and may be in real financial difficulty, making them especially vulnerable to fraudulent communications indicating that there is money available to them. Second, the federal government has instituted a great number of programs to provide financial assistance to those hit hard by the pandemic. The sheer number of those programs, however, and the fact that they have had to be revised frequently to take account of changing conditions has resulted in an inevitable degree of confusion about just what is available, who is eligible for the different benefits, and how to claim them. That confusion makes it easier for fraud artists to convince their victims of the validity of what they are “offering”. It also makes taxpayers vulnerable to phone calls or voice mails in which they are, in effect, accused of receiving benefits to which they were not entitled and demanding that they send funds in repayment.
It’s an acknowledged reality that times of crisis bring out both the best and the worst in people. While most Canadians would never consider using the current pandemic as a means of defrauding others, this is not, unfortunately, true of everyone.
This is a time when Canadians are particularly vulnerable to scammers and fraud artists, for a number of reasons. First, of course, is the financial dislocation which has resulted from the pandemic — many Canadians have lost income and may be in real financial difficulty, making them especially vulnerable to fraudulent communications indicating that there is money available to them. Second, the federal government has instituted a great number of programs to provide financial assistance to those hit hard by the pandemic. The sheer number of those programs, however, and the fact that they have had to be revised frequently to take account of changing conditions has resulted in an inevitable degree of confusion about just what is available, who is eligible for the different benefits, and how to claim them. That confusion makes it easier for fraud artists to convince their victims of the validity of what they are “offering”. It also makes taxpayers vulnerable to phone calls or voice mails in which they are, in effect, accused of receiving benefits to which they were not entitled and demanding that they send funds in repayment.
In addition, the pandemic has made it necessary for Canadians to manage just about everything online or by phone, opening up opportunities for fraudsters to misrepresent themselves as government officials through e-mail or telephone, or to create fake “government” websites. Individuals who are not accustomed to managing their financial affairs in the online world are especially vulnerable right now to these approaches. Finally, since the filing deadlines for income tax return for the 2019 tax returns have passed, the Canada Revenue Agency (CRA) will, as happens each year, be contacting some taxpayers seeking clarification of income amounts reported or documentation of deductions or credits claimed on the annual return. Consequently, it wouldn’t necessarily strike taxpayers as unusual to receive, at this time of the year, a communication purporting to be from the CRA, with a message regarding that person’s taxes. All in all, 2020 represents a “perfect storm” of opportunity for scammers and fraudsters.
The federal government has already identified at least one specific scam which has arisen in relation to pandemic benefits. Canadians have received a text message indicating that a deposit has been made to their bank account, representing benefits under the Canada Emergency Response Benefit (CERB) program. The message is invariably fraudulent, as the federal government does not, under any circumstances, contact taxpayers by text. Recipients should not click on the link provided and should delete the text entirely.
When receiving a communication of any kind from someone purporting to be from the federal government, a taxpayer should ask themselves the following questions.
Is the federal government likely to be contacting me in this way? In most cases, the federal government communicates with taxpayers by regular mail or, if the taxpayer has signed up for online communication, through the taxpayer’s online account with Service Canada (for pandemic-related benefits, Canada Pension Plan, Old Age Security, or Employment Insurance) or the CRA (for all income tax related matters). The federal government does not and has never communicated with taxpayers by text. While the CRA and Service Canada will communicate with taxpayers by telephone, there are ways in which a taxpayer can ensure that the call, and the caller, are legitimate.
Anyone calling from a government department or agency should be able to identify themselves, if not by name, then by employee or agent number. Second, they should be able to provide a telephone number at which they can be called back.(It’s important to note that call display cannot be relied on to accurately identify the source of the call, as scammers have been able to manipulate call display to show actual government phone numbers.) Finally, if the caller really is from the federal government, then they should already have certain information about the taxpayer they are calling — at a minimum the taxpayer’s social insurance number. If they don’t, and they request that information from the taxpayer, it’s a sure sign that caller is not who they claim to be. If the taxpayer has any doubt about the legitimacy of the call or the caller, and especially if a demand for money is made, the best course of action is to hang up and place a call to the particular government department or agency to verify the legitimacy of the initial call. For that purpose, the CRA’s individual income tax help line number is 1-800-959-8281. If the suspect call received was about the Canada Emergency Response Benefit, and the taxpayer has questions about his or her current or past eligibility for the benefit, he or she should call the CERB at 1-833-966-2099. If the call or e-mail was clearly fraudulent, it should be reported to the Canada Anti-Fraud Centre at 1-888-495 8501.
The Service Canada numbers (both of which are toll-free) to call are as follows:
- Canada Pension Plan and Old Age Security: 1-800-277 9914
- Employment Insurance: 1-833-966-2099
Generally, there are two ways in which financial fraud artists prey on Canadians. In the first, the taxpayer is contacted, by phone, text, or e-mail and advised that he or she is owed money by the federal government. In order to receive the money owed, the taxpayer must click on a link in the e-mail or text, or to provide financial information (like a bank account number) over the phone. The e-mail or text link leads to a “dummy” site closely resembling the actual CRA or Service Canada website. The taxpayer must then, in order to have his or her “refund” processed, provide personal and financial information which can then be used by the scammer to gain access to their bank accounts.
The second approach, and one which has been used with great success over the past few years, is to falsely inform the taxpayer (this time, usually by telephone) that he or she has received benefits or a tax refund to which they are not entitled and that the money must be repaid immediately to the federal government. Since literally millions of Canadians have received pandemic-related benefits over the past four months, Canadians are particularly vulnerable to a scam like this right now. A failure to pay, the taxpayer is told, will mean seizure of his or her assets, cancellation of his or her passport and/or social insurance card or other government-issued identification, deportation or imprisonment. Further, such payment must be made only by wire transfer or pre-paid credit card. This type of fraud has become so ubiquitous, in fact, that many businesses which provide money transfer services post warnings on their premises to would-be users of the need to be aware of the fraud risk.
There are, in fact, several things about such a phone call that should alert the recipient to the fact that it’s not legitimate. First of all, if a taxpayer does owe money to any department or agency of the federal government, he or she will be first advised of that fact by mail and never by telephone. Second, there is no agency or department of the federal government that would suggest or require that a taxpayer send funds to that agency by wire transfer or by using a prepaid credit card. Any payment of money owed to the federal government is made online, through a legitimate government website, through the taxpayer’s financial institution (in person or online), or by mailing a cheque. Finally, any suggestion that the federal government would (or could) cancel a taxpayer’s passport or other government issued ID for failure to make payment is simply ludicrous.
There is almost no limit to the number and variety of scams, frauds, and phishing attempts that are carried out using the name of the CRA or Service Canada and new ones, which appear frequently, are usually identified on the CRA website at http://www.cra-arc.gc.ca/scrty/frdprvntn/menu-eng.html and on the Service Canada website at https://www.canada.ca/en/employment-social-development/corporate/portfolio/service-canada/fraud.html. Unfortunately, many such scams originate outside Canada, limiting the ability of law enforcement authorities to monitor or stop them. For the most part, therefore, the onus will fall on individual taxpayers to protect themselves, through a healthy degree of caution and skepticism.
The CRA suggests that, in order to avoid becoming a victim of such scams, taxpayers should keep the following general guidelines in mind.
The CRA and Service Canada will never:
- ask for personal information of any kind by email or text message;
- send an e-mail or text with a link to be used;
- request payment by prepaid credit cards;
- ask for a taxpayer’s credit card information;
- give taxpayer information to another person, unless formal authorization is provided by the taxpayer; or
- leave personal information on an answering machine.
When in doubt, a taxpayer should ask him or herself the following:
- Did I sign up to receive online mail through My Account or My Service Canada Account?
- Did I provide my email address on my income tax and benefit return to receive mail online?
- Am I expecting more money from the CRA or Service Canada?
- Does this sound too good to be true?
- Is the requester asking for information I would not be asked for in my tax return (like a credit card number)?
- Is the requester asking for information I know the CRA or Service Canada already has on file for me (e.g., my social Insurance number)?
As ever, the best defence against becoming a victim of such fraud artists is by refusing to provide personal or financial information, and especially never to make any kind of payment, whether by phone, e-mail, or online, without first contacting the particular government department to verify the legitimacy of the request.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
When states of emergency were being declared across the country in March of this year, thousands of businesses were forced to close their doors and, as a result, were faced with the necessity of laying off some or all of their employees.
The question of when, or even whether, those employees could and would be recalled to work was essentially unknown at that time. To address that reality the federal government established the Canada Emergency Wage Subsidy (CEWS) program. As the name implies, the program involved the payment of a subsidy to the employer, who would use those funds to keep employees on the payroll pending the re-opening of the business and the return to work.
When states of emergency were being declared across the country in March of this year, thousands of businesses were forced to close their doors and, as a result, were faced with the necessity of laying off some or all of their employees.
The question of when, or even whether, those employees could and would be recalled to work was essentially unknown at that time. To address that reality the federal government established the Canada Emergency Wage Subsidy (CEWS) program. As the name implies, the program involved the payment of a subsidy to the employer, who would use those funds to keep employees on the payroll pending the re-opening of the business and the return to work.
The initial launch of the CEWS is probably best described as a partial success. While some employers did avail themselves of the subsidy, there were criticisms that the eligibility criteria were too rigid or too narrow and that the time frame for providing support was too short. As well, employees whose income had been curtailed for pandemic-related reasons could often claim benefits under the Canada Emergency Response Benefit (CERB) program, which in some cases provided them with a better financial result.
Following consultations with interested groups, the federal government addressed the identified deficiencies of the CEWS and, on July 17, announced both that changes would be made to the program’s eligibility criteria to improve flexibility and that the program would be extended to provide support until December 19, 2020 (the original program end date had been August 29, 2020).
Inevitably, greater flexibility means greater complexity, but the basic structure of the CEWS program beginning July 5, 2020 is that the amount of subsidy payable will be calculated based on the percentage of revenue loss experienced by the employer over a specified time period, with different amounts payable depending on whether the employee in respect of whom the subsidy is paid has returned to work, or is still “furloughed”.
For “active” employees (those who have returned to work) the CEWS would consist of two parts;
- abase subsidy available to all eligible employers that are experiencing a decline in revenues, with the subsidy amount varying depending on the scale of revenue decline and the time period involved; and
- a “top-up” subsidy of up to an additional 25% for those employers that have been most adversely affected by the pandemic crisis.
For purposes of the base subsidy, employers will be assigned to one of two groups, depending on whether their revenue loss is more or less than 50% over a particular period. The calculation of the available subsidy will then differ for each group, in each time period, as shown on the Finance Canada website at https://www.canada.ca/en/department-finance/news/2020/07/adapting-the-canada-emergency-wage-subsidy-to-protect-jobs-and-promote-growth.html.
The amount of the top-up subsidy benefit, for employers who have been particularly hard-hit, will be based on the employer’s three-month average revenue drop, as measured on a year-over-year basis, where that drop exceeds 50%.
For employees who are still furloughed, a subsidy benefit will still be provided, with the amount of such benefit dependent on the time period for which the subsidy is paid. Generally, for the July 5 to August 29 period, the available subsidy for a furloughed employee would be the greater of the following two amounts:
- for arm’s-length (generally meaning non-related) employees, 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
- 75% of the employee’s pre-crisis weekly remuneration up to a maximum benefit of $847 per week or the amount of remuneration paid, whichever is less.
After August 29th, the CEWS subsidy for furloughed employees would be adjusted to align with the benefits provided through the Canada Emergency Response Benefit (CERB) and/or Employment Insurance (EI).
The changes to the CEWS program, while addressing many of the concerns expressed by stakeholders, have undoubtedly increased the complexity of the program. However, Finance Canada has prepared and posted on its website a backgrounder and guide showing how the subsidy amount is actually calculated for each category of business and employee, over several different time periods. That guide can be found on the Finance Canada website at https://www.canada.ca/en/department-finance/news/2020/07/adapting-the-canada-emergency-wage-subsidy-to-protect-jobs-and-promote-growth.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
For post-secondary students the upcoming academic year is going to be unlike anything they have previously experienced. Post-secondary institutions across the country are now determining whether, and to what extent, students should return to in-class learning or whether, at least for the fall semester of the 2020-21 academic year, programs should be delivered entirely through online or remote learning. While some institutions have already indicated that they will be only providing online learning, and a smaller group intends to continue entirely with the traditional in-class model, most universities and colleges have taken a “wait and see” approach, choosing to employ a “hybrid” model which combines in-class learning with online courses.
For post-secondary students the upcoming academic year is going to be unlike anything they have previously experienced. Post-secondary institutions across the country are now determining whether, and to what extent, students should return to in-class learning or whether, at least for the fall semester of the 2020-21 academic year, programs should be delivered entirely through online or remote learning. While some institutions have already indicated that they will be only providing online learning, and a smaller group intends to continue entirely with the traditional in-class model, most universities and colleges have taken a “wait and see” approach, choosing to employ a “hybrid” model which combines in-class learning with online courses.
While the current situation leaves post-secondary students in something of a quandry when it comes to planning their living arrangements in September, there are some aspects of post-secondary education which haven’t changed. Regardless of where and how classes are held, students will have to pay tuition. As well, many will be taking out or extending government student loans to finance their studies. And, fortunately for those students, the tax breaks and credits which were available to them in previous years to help offset the costs of their education will also be claimable for the upcoming academic year, regardless of the form that education takes.
Those tax credits, deductions and benefits which can be claimed by post-secondary students (or their spouses, parents, or grandparents) in relation to the 2020-21 academic year are summarized below.
Tuition fees
The good news is that a tax credit continues to be available for the single largest cost associated with post-secondary education — the cost of tuition. Any student who incurs more than $100 in tuition costs at an eligible post-secondary institution (which would include most Canadian universities and colleges) can still claim a non-refundable federal tax credit of 15% of such tuition costs. The provinces and territories also provide students with an equivalent provincial or territorial credit, with the rate of such credit differing by jurisdiction.
The charges imposed on post-secondary students under the heading of “tuition” include myriad costs which may differ, depending on the particular program, and not all of those costs will qualify as “tuition” for purposes of the tuition tax credit. The following specific amounts do, however, constitute eligible tuition fees for purposes of that credit:
- admission fees;
- charges for use of library or laboratory facilities;
- exemption fees;
- examination fees (including re-reading charges) that are integral to a program of study;
- application fees (but only if the student subsequently enrolls in the institution);
- confirmation fees;
- charges for a certificate, diploma, or degree;
- membership or seminar fees that are specifically related to an academic program and its administration;
- mandatory computer service fees; and
- academic fees.
The following charges do not, however, constitute tuition fees for purposes of the credit:
- extracurricular student social activities;
- medical expenses;
- transportation and parking;
- board and lodging;
- goods of enduring value that are to be retained by students (such as a microscope, uniform, gown, or computer);
- initiation fees or entrance fees to professional organizations including examination fees or other fees (such as evaluation fees) that are not integral to a program of study at an eligible educational institution;
- administrative penalties incurred when a student withdraws from a program or an institution;
- the cost of books (other than books, compact disks, or similar material included in the cost of a correspondence course when the student is enrolled in such a course given by an eligible educational institution in Canada); and
- courses taken for purposes of academic upgrading to allow entry into a university or college program — these courses would usually not qualify for the tuition tax credit as they are not considered to be at the post-secondary school level.
Certain ancillary fees and charges, such as health services fees and athletic fees, may also be eligible tuition fees. However, such fees and charges are limited to $250 unless the fees are required to be paid by all full-time students or by all part-time students.
At both the federal and provincial levels, the tuition tax credit is a non-refundable credit, which means it reduces income tax which would otherwise be payable by the student for the tax year in which the tuition fees are paid. Where, as is often the case, a student doesn’t have tax payable for the year (or insufficient tax to use up the full tuition tax credit), credits earned can be carried forward and claimed by the student in any future tax year, or transferred (within limits) in the current year to be claimed by a spouse, parent, or grandparent.
Personal and living expenses
This year, it’s possible that students will not have to move to the city in which their post-secondary institution is located, where that institution chooses to deliver courses using an online learning model only. However, the fact that residence fees or rent for an off-campus apartment won’t have to be paid won’t change anything with respect to the student’s tax position. As has always been the case, living costs incurred by a post-secondary student (whether on campus or off) are characterized as personal and living expenses, for which no tax deduction or credit is allowed.
Student debt
Most post-secondary students in Canada must incur some amount of debt in order to complete their education, and repayment of that debt is typically not required until after graduation. Once repayment starts, a tax credit can be claimed for the amount of interest being paid on such debt, in some circumstances.
Students who are still in school and arranging for loans to finance their education should be mindful of the rules which govern that student loan interest tax credit, since decisions made while still in school with respect to how post-secondary education will be financed can have tax repercussions down the road, after graduation. That’s because while all interest paid on a qualifying student loan is eligible, without limit, for that tax credit, only some types of student borrowing will qualify. Specifically, only interest paid on government-sponsored (federal or provincial) student loans will be eligible for the credit. Interest paid on loans of any kind from any financial institution will not.
It’s not uncommon (especially for students in professional programs, like law or medicine) to be offered lines of credit by a financial institution, often at advantageous or preferential interest rates. As well, once a student has graduated and begun to repay a government-sponsored student loan, financial institutions will offer to consolidate that student loan with other kinds of debt, also at advantageous interest rates. However, it should be kept in mind that interest paid on that line of credit (or any other kind of borrowing from a financial institution to finance education costs) will never be eligible for the student loan interest tax credit.
As explained in the Canada Revenue Agency (CRA) publication on the subject: “ [I]f you renegotiated your student loan with a bank or another financial institution, or included it in an arrangement to consolidate your loans, you cannot claim this interest amount”. In other words, where a government student loan is combined with other debt and consolidated into a borrowing of any kind from a financial institution, the interest on that government student loan is no longer eligible for the student loan interest tax credit.
Students who are contemplating borrowing from a financial institution rather than getting a government student loan (or considering a consolidation loan which incorporates that student loan amount) must remember, in evaluating the benefit of any preferential interest rate offered by a financial institution, to take into account the loss of the student loan interest tax credit on that borrowing in future years.
Credits withdrawn but available for carryforward
Formerly, post-secondary students were able to claim an education tax credit and the textbook tax credit. Both credits were, unfortunately, eliminated as of the end of 2016. It’s important to remember, however, that where education and textbook credits were earned but not claimed in years before 2017 they are still available to be claimed by the student as carryover credits in any subsequent tax year, including after graduation.
Other credits and deductions
There are, as well, a number of credits and deductions which, while not specifically education-related, are frequently claimed by post-secondary students (for instance, deductions for moving costs). The CRA publishes a very useful guide which summarizes most of the rules around income and deductions which may apply to post-secondary students. The current version of that guide, entitled Students and Income Tax, is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p105.html.
Finally, most post-secondary students count on summer earnings to help offset the cost of their education, or to minimize the amount of debt they must take on to complete that education. This year, of course, it has been nearly impossible for such students to earn summer earnings as they did in previous years. There is, however, a federal government grant, provided as part of the pandemic response plan, which students can claim to help make up that shortfall. That grant program is the Canada Emergency Student Benefit (CESB), which will, generally, provide students who are unable to find work due to the pandemic with $1,250 in taxable income for each four-week period between May and August 2020. There are, of course, eligibility requirements for the CESB and those requirements, along with other program details, can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/benefits/emergency-student-benefit.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
When the Canada Pension Plan was put in place on January 1,1966, it was a relatively simple retirement savings model. Working Canadians started making contributions to the CPP when they turned 18 years of age and continued making those contributions throughout their working life. Those who had contributed could start receiving CPP on retirement, usually at the age of 65. Once an individual was receiving retirement benefits, he or she was not required (or allowed) to make further contributions to the CPP. The CPP retirement benefit for which that individual was eligible therefore could not increase (except for inflationary increases) after that point.
When the Canada Pension Plan was put in place on January 1,1966, it was a relatively simple retirement savings model. Working Canadians started making contributions to the CPP when they turned 18 years of age and continued making those contributions throughout their working life. Those who had contributed could start receiving CPP on retirement, usually at the age of 65. Once an individual was receiving retirement benefits, he or she was not required (or allowed) to make further contributions to the CPP. The CPP retirement benefit for which that individual was eligible therefore could not increase (except for inflationary increases) after that point.
Retirement looks a lot different now than it did it 1966, and the Canada Pension Plan has evolved and changed to recognize those differences. What that means for the average Canadian is much more flexibility in determining how to structure both their contributions to the CPP and their receipt of CPP retirement benefits.
While greater flexibility in retirement income planning is always a good thing, having that flexibility comes at a price of greater complexity when it comes to determining which choices are the right ones in one’s particular circumstances. And one of the decisions which must be made, when it comes to CPP, is whether and when it might made sense to stop making CPP contributions.
The need to make that choice arises where a decision is made to continue to stay in the work force, whether on a part-time or full-time basis, even after beginning to receive CPP retirement benefits. While it has always been possible to work while receiving such benefits, it was, until 2012, not possible to make CPP contributions related to that work. A change made in that year, however, allowed individuals who continued to work while receiving the CPP retirement benefit to also continue to contribute to the Canada Pension Plan and, as a result, increase the amount of CPP retirement benefit they received each month. That benefit is the CPP Post-Retirement Benefit or PRB.
The rules governing the PRB differ, depending on the age of the taxpayer. In a nutshell, an individual who has chosen to begin receiving the CPP retirement benefit but who continues to work will be subject to the following rules:
- Individuals who are 60 to 65 years of age and continue to work are required to continue making CPP contributions.
- Individuals who are 65 to 70 years of age and continue to work can choose not to make CPP contributions. To stop contributing, such an individual must fill out Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, which can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt30.html.
- A copy of that form must be given to the individual’s employer and the original sent to the Canada Revenue Agency (CRA). An individual who has more than one employer must make the same choice (to continue to contribute or to cease contributions) for all employers and must provide a copy of Form CPT30 to each.
- A decision to stop contributing can be changed, and contributions resumed. To make that change, the individual must complete section D of Form CPT30, give one copy of the form to his or her employer, and send the original to the CRA
- Individuals who are over the age of 70 and are still working cannot contribute to the CPP.
Overall, the effect of these new rules is that CPP retirement benefit recipients who are still working and who are under age 65, as well as those who are between 65 and 70 and choose not to opt out, will continue to make contributions to the CPP system and will continue therefore to earn new credits under that system. As a result, the amount of retirement benefits which they are entitled to will increase with each year’s additional contributions.
Where an individual makes CPP contributions while working and receiving CPP retirement benefits, the amount of any CPP PRB earned will automatically be calculated by the federal government, and the individual will be advised of any increase in that monthly CPP retirement benefit each year. The PRB will be paid to that individual automatically the year after the contributions are made, effective January 1 of every year. Since the federal government needs information about employer contributions made, the first annual payment of the PRB is usually issued in early April and includes a lump sum amount representing benefits back to January of that year. Thereafter, the PRB is paid monthly and the PRB amount is added to the individual’s CPP retirement benefit amount and issued as a single payment.
While the rules governing the PRB can seem complex (and certainly the actuarial calculations are), the individual doesn’t have to concern him or herself with those technical details. For CPP retirement benefit recipients who are under age 65 or over 70, there is no decision to be made. For the former, CPP contributions will be automatically deducted from their paycheques and for the latter, no such contributions are allowed.
Individuals in the middle group — aged 65 to 70 — will need to make a decision about whether it makes sense, in their individual circumstances, to continue making contributions to the CPP. Some assistance in making that decision is provided on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement/benefit-amount.html, which shows the calculations which would apply for individuals of different ages and income levels.
More information on the PRB generally is also available on that website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Just over a decade ago, it was possible to buy a home in Canada with no down payment — financing 100% of the purchase price — and extending the repayment period for that borrowing over a 40-year period.
Just over a decade ago, it was possible to buy a home in Canada with no down payment — financing 100% of the purchase price — and extending the repayment period for that borrowing over a 40-year period.
A lot has changed since then and one of those changes has been a steady tightening of the rules governing mortgage financing in Canada, especially for mortgages guaranteed by the Canada Mortgage and Housing Corporation (CMHC). The latest such set of changes will take effect on July 1, 2020.
To understand those changes, a bit of background is required. When Canadians buy a home, they must provide a percentage of the purchase price as a down payment. Where the purchase price of the home is $500,000 or less, the minimum down payment is 5%. However, where the down payment made on such a home is less than 20% of the purchase price, there is a requirement to obtain mortgage default insurance. While there are private companies which provide such insurance, in many cases the insurer is CMHC.
Although the borrower/home purchaser pays the premiums on the mortgage default insurance issued by CMHC, it’s actually the lender (usually a bank or other financial institution) who is protected. Essentially, CMHC guarantees that if the homebuyer defaults on his or her mortgage obligations, the Agency will step in to limit any losses incurred by the lender.
Like all insurance providers, CMHC imposes requirements on those who apply for mortgage default insurance and it is those requirements which will change on July 1 (effective for any new applications made on or after that date).
As of July 1, the following new requirements will apply.
New limits on the amount of non-mortgage debt which prospective homeowners can carry
Most Canadians carry debt in some form besides their mortgage debt (car loans, credit cards, lines of credit, etc.), and that non-mortgage debt is factored into the determination of the credit-worthiness of the mortgage insurance applicant. There are two measurements used — Gross Debt Service (GDS) and Total Debt Service (TDS). The first (the GDS) is a measure of housing costs, and includes mortgage payments, property taxes, heating and, where applicable, condominium fees. The second measurement (the TDS) includes housing costs plus all other debt-related payments. In each case, the total amount of debt-servicing obligations is measured as a percentage of gross household income.
The changes which take effect on July 1 will place more stringent limits on the amount of both housing and non-housing debt costs which applicants can have. Prior to July 1, CMHC requirements were that GDS and TDS for an applicant should be no more than 39% and 44% respectively — that is, GDS of no more than 39% of gross household income and TDS of no more than 44% of gross household income. For new applications made after June 30, those numbers will tighten, and applicants will be required to have GDS and TDS ratios of no more than 35% and 42%, respectively. In other words, housing costs which make up the GDS must be no more than 35% of gross household income and total debt servicing obligations which make up the TDS must be no more than 42% of gross household income.
A requirement that at least one of the prospective homeowners have a credit score of at least 680
Most Canadians are familiar with credit scores, which are widely used in assessing the credit-worthiness of an individual. Briefly, a credit score is a measure of both the amount of debt currently held by an individual and the individual’s past history in managing credit. A credit score can range from 300 to 900.
Previously, CMHC had required that applicants for mortgage default insurance have a credit score of at least 600. After June 30, that requirement will increase, as at least one member of the household will need to have a credit score of at least 680 to meet the CMHC’s requirements.
Changes to the rules around borrowing to obtain a down payment
While mortgage insurance applicants have been required to have a down payment of at least 5% (where the purchase price of the home is $500,000 or less) there have, to date, been no restrictions on how that down payment can be obtained. On July 1, for those seeking CMHC mortgage insurance, that will change.
Optimally, a down payment comes from the savings of the prospective home purchasers. However, it is not uncommon for that down payment to be obtained from other sources, including private borrowings (often from parents) or borrowings from other sources like lines of credit or even credit cards. Regardless of the source of the funds, CMHC was prepared to treat the borrowed down payment funds as an asset of the prospective home buyers. However, that policy will change and the new rule will be that where the down payment arises from borrowed funds (whatever their source) CMHC will no longer consider those funds to be an asset of the applicant — or, as set out in the CMHC announcement of the changes “[n]on-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.”
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
While Canadians had an extended time this year to file their income tax returns for the 2019 tax year, the extended filing deadlines (June 1 for the majority of Canadians, and June 15 for self-employed individuals and their spouses) have passed and returns should be filed.
While Canadians had an extended time this year to file their income tax returns for the 2019 tax year, the extended filing deadlines (June 1 for the majority of Canadians, and June 15 for self-employed individuals and their spouses) have passed and returns should be filed.
In most cases, the taxpayer files a return and then waits for a Notice of Assessment from the Canada Revenue Agency (CRA) letting them know whether the tax authorities are in agreement with the taxpayer’s information on his or her tax situation. And, in most of those cases the CRA will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA does agree with the information filed and tax result obtained by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can go “off the rails” in any number of ways.
By the third week of June 2020, over 27 million individual income tax returns for the 2019 tax year had been filed with the CRA. And, inevitably, some of those returns contain errors or omissions that must be corrected — in 2019 the CRA received about 2 million requests for adjustment(s) to an already filed return.
Just over 90% of the returns which have already been filed for the 2019 tax year were filed through online filing methods, meaning that they were prepared using tax return preparation software. The use of such software significantly reduces the chance of making a clerical or arithmetic error, like entering an amount on the wrong line or adding a column of figures incorrectly. However, no matter how good the software, it can work only with the information that is provided to it. Sometimes taxpayers prepare and file a return, only to later receive a tax information slip that should have been included on that return. It’s also easy to make an inputting error when transposing figures from an information slip (a T4 from one’s employer, for instance) into the software, such that $49,505 in income becomes $45,905. Whatever the cause, where the figures input are incorrect or information is missing, those errors or omissions will be reflected in the final (incorrect) result produced by the software.
When the error or omission is discovered in a return which has already been filed, the question which immediately arises is how to make things right. The first impulse of many taxpayers is to file another return, in which the complete and correct information is provided, but that’s not the right answer. There are, however, several ways in which a mistake or omission on an already filed tax return can be corrected, including online options.
A few years ago the CRA introduced a new service called ReFILE, which allows taxpayers who filed their returns online (whether through NETFILE or EFILE) to advise the CRA electronically of an error or omission made in an already-filed return. The ReFILE service, which can be found at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/refile-online-t1-adjustments-efile-service-providers.html, allows taxpayers to make such corrections online, on the CRA website.
Essentially, a taxpayer is able to file a correction to an already-filed return, using the same tax return preparation software that was used to prepare the return. Whether the return was filed using NETFILE or EFILE, adjustments for returns can be filed used ReFILE for any of the 2016, 2017, 2018, or 2019 taxation years.
There are limits to the ReFILE service. The online system will accept a maximum of 9 adjustments to a single return, and ReFILE cannot be used to make changes to personal information, like the taxpayer’s address or direct deposit details. There are also some types of tax matters which cannot be handled through ReFILE, like applying for a disability tax credit or child and family benefits.
It’s also possible to make a change or correction to a return using the CRA’s “My Account” service (through the “Change My Return” feature), but that choice is available only to taxpayers who have already registered for My Account. As well, the changes/corrections which can be made using ReFILE are the same as those which can be done through My Account, without the need to become registered for My Account, a process which takes a few weeks.
Taxpayers who wish to make changes or corrections which cannot be made through ReFILE or My Account (or those who just don’t wish to use the online option) can paper-file an adjustment to their return. The paper form to be used is Form T1-ADJ E, which can be found on the CRA website at https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t1-adj/t1-adj-08-18e.pdf. Those who are unable to print the form off the website can order a copy to be sent to them by mail by calling the CRA’s individual income tax enquiries line at 1-800-959-8281. There is no limit to the number of changes or corrections which can be made using Form T1-ADJ E.
The use of the actual T1-ADJ E form isn’t mandatory — it’s also possible to file an adjustment request by sending a letter to the CRA — but using the prescribed form has two benefits. First, it makes clear to the CRA that an adjustment is being requested, and second, filling out the form will ensure that the CRA is provided with all the information needed to process the requested adjustment. And, whether the request is made using the T1 Adjustment form or by letter, it is necessary to include any relevant documents — the information slip summarizing the income not reported, or the receipt for an expense inadvertently not claimed.
Hard copy of a T1-ADJ E (or a letter) is filed by sending the completed document to the appropriate Tax Center, which is the one with which the tax return was originally filed. A listing of Tax Centres, and their addresses, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/corporate/contact-information/tax-centres.html. A taxpayer who isn’t sure any more which Tax Centre his or her return was filed with can go to https://www.canada.ca/en/revenue-agency/corporate/contact-information/tax-services-offices-tax-centres.html on the CRA website and select his or her location from the listing found there. The address for the correct Tax Centre will then be provided. Similar information is also provided on page 2 of the T1ADJ form.
Where a taxpayer discovers an error or omission in a return already filed, the impulse is to correct that mistake as soon as possible. However, no matter which method is used to make the correction — ReFILE, My Account, or the filing of a T1-ADJ in hard copy, it is necessary to wait until the Notice of Assessment for the return already filed is received. Corrections to a return submitted prior to the time that return is assessed simply can’t be processed by the CRA.
Once the Notice of Assessment is received, and an adjustment request is made, it will take at least a few weeks, usually longer, before the CRA responds. The Agency’s usual estimate is that such requests which are submitted online have a turnaround time of about two weeks, while those which come in by mail take about eight weeks. However, the CRA has indicated, in a notice posted on its website, that it is experiencing “significant” delays this year in the processing of both paper-filed T1 tax returns and paper-filed T1 ADJ E requests. The notice did not indicate how long this delay might last.
Sometimes the CRA will contact the taxpayer, even before a return is assessed, to request further information, clarification, or documentation of deductions or credits claimed (for example, receipts documenting medical expenses claimed, or child care costs). Whatever the nature of the request, the best course of action is to respond promptly, and to provide the requested documents or information. The CRA can assess only on the basis of the information with which it is provided, and it is the taxpayer’s responsibility to provide support for any deduction or credit claims made. Where a request for information or supporting documentation for a claimed deduction or credit is ignored by the taxpayer, the assessment will proceed on the basis that such support does not exist. Providing the requested information or supporting documentation can usually resolve the question to the CRA’s satisfaction, and its assessment of the taxpayer’s return can then be completed.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
While the standard (and accurate) advice is that tax and financial planning are best approached as activities to be carried on throughout the year, it’s also the case that a mid-year tax and financial checkup makes good sense, and that’s especially the case this year.
While the standard (and accurate) advice is that tax and financial planning are best approached as activities to be carried on throughout the year, it’s also the case that a mid-year tax and financial checkup makes good sense, and that’s especially the case this year.
For most Canadians, 2020 has been a year of financial uncertainty and, in many cases, significant financial stress. Millions of Canadians became suddenly unemployed when pandemic-related states of emergency were declared in mid-March and businesses closed. Many others lost income when schools closed and they needed to stay home to care for their children. By June 21, 2020, the federal government had processed over 18 million applications for the Canada Emergency Response Benefit (CERB), the $500 per week benefit which was paid (and in some cases continues to be paid) to those who suffered a pandemic-related loss of income. Of those who received CERB benefits, some may be returning to work in the near future, while others may have no idea when (or whether) their former positions will become available to them again.
All of this makes for significant financial uncertainly. And while much of the near financial future for most Canadians may still be uncertain, it’s nonetheless both possible and advisable to take stock of one’s financial and tax position to date, especially in relation to the financial and tax changes resulting from the pandemic. The first step this year should be an assessment of how the financial consequences of the pandemic have affected one’s tax position for 2020.
Tax considerations for CERB recipients
Most of the millions of Canadians who received CERB benefits are likely unaware that such benefits represent taxable income for 2020 and that no income tax was deducted from benefits paid. That tax will have to be paid when the return for 2020 is filed in the spring of 2021.
The standard CERB benefit is $500 per week and such benefits may be received for a maximum of 24 weeks. Canadians who collect CERB for the maximum allowable 24-week period will therefore be paid $12,000. For those with incomes up to about $50,000 the federal tax rate levied on CERB amounts received will be 15%. Where a taxpayer’s income for this year is between $50,000 and $100,000 the applicable federal tax rate is 20.5%. Each province will also impose tax on CERB amounts, with the rate varying by province. A listing of federal, provincial, and territorial tax rates for 2020 can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html#provincial.
While no one likes to find out that a tax amount is owed when the annual tax return is filed, that will be especially unwelcome news to those who are already dealing with income loss from unemployment. The best course of action to avoid that scenario is to start now to make provision for the taxes which will be owed on CERB amounts received.
The simplest way to do so, of course, is to begin to set aside funds which will be needed to pay the tax bill next spring. However, as with most savings goals, it’s easier to make such a commitment than to fulfill it.
Taxpayers who have returned to work and are once again receiving a paycheque have another option — they can have the amount of tax withheld from that paycheque increased to cover the tax which will be payable on CERB amounts received. Usually, the employee can simply request that his or her employer increase the amount of tax withheld from each paycheque and remitted to the federal government on the employee’s behalf.
In some cases, taxpayers won’t be able to fulfill their tax obligations from current income sources and will have to dip into savings. Generally speaking, where there is a choice, it is best to use funds that are held in non-registered savings plans, like a savings account. Where such funds aren’t available, a withdrawal from a Tax-Free Savings Account is the next best option. Amounts withdrawn from a TFSA will not be included in taxable income and, where the withdrawal is made before the end of 2020, the amount withdrawn can be replaced, where finances allow, in 2021. Taking funds out of a registered retirement savings plan should be a last resort, as any amount withdrawn will be added to income and will itself increase the tax bill for the year and, unlike a TFSA, amounts withdrawn from an RRSP cannot be replaced. Borrowing to pay taxes owed is an option, but taxpayers should be aware that interest paid on money borrowed for that purpose is not deductible.
Considerations for retirees
For those who are already retired, or those close to retirement, watching the value of their retirement savings take a sharp drop during the month of March was more than a little stressful. Recognizing the disproportionate effect that the market downturn had on such taxpayers, the federal government made some changes, for this year only, to help cushion the blow.
The changes announced affect those taxpayers over the age of 71 who have a Registered Retirement Income Fund (RRIF). The usual rules governing such RRIFs require that holders withdraw a specified percentage of the balance in the RRIF each year, with the required percentage based on the taxpayer’s age.
The difficulty which arose was that the rules require that the RRIF balance used to calculate the required withdrawal is the balance as of the beginning of the calendar year. For nearly every RRIF holder in Canada, that balance was much higher at the beginning of 2020 than it is now, so that the required withdrawal would represent a disproportionate share of RRIF. As well, where it was necessary to sell investments in order to make the withdrawal, those investments would have to be sold at a diminished, post-downturn value.
In recognition of all of these circumstances, the federal government announced that the required RRIF withdrawal would be reduced, for 2020 only, to 75% of the usual amount. For example, where a taxpayer would normally be required to withdraw $2,000 from his or her RRIF in 2020, the required withdrawal will now be $1,500.
There is no particular rule for when a taxpayer must make the required annual withdrawal from his or her RRIF. While some RRIF holders make that withdrawal at the beginning of the calendar year, others opt for monthly withdrawals throughout the year and still others wait until the last minute and make the required withdrawal at year end.
The rule change will have different impacts depending on how a particular taxpayer’s withdrawal is structured for this year. Perhaps most important, for those who made their full required 2020 withdrawal before the rule change was announced in March, it’s not possible to recontribute the “excess” 25%. Those who withdraw in equal monthly amounts throughout the year and who wish to reduce their 2020 withdrawal by the allowable 25% can take steps to adjust that monthly withdrawal to reflect the reduced amount and, of course, those who withdraw at the end of year can similarly change their planned withdrawal.
It’s important to remember two points: first, there is no requirement that RRIF holders alter their withdrawal amounts for 2020. The option to reduce the usual required withdrawal by 25% is just that — an option. Those whose cash flow requirements can accommodate a reduced withdrawal can take advantage of the available option while others who may need the funds to meet living expenses can make the full withdrawal as originally planned. Second, in all cases any withdrawals made from a RRIF are taxable income to the RRIF holder. Examples of how the change will apply can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/tax/registered-plans-administrators/registered-retirement-savings-plans-registered-retirement-income-funds-rrsps-rrifs/economic-statement-measure-annuitants-rrsp-rrif.html.
Finally, there is another bit of good tax news for retirees this year. In July, all Canadians who currently receive Old Age Security benefits will receive an additional one-time payment of $300 to help offset additional costs they may have incurred as the result of the pandemic. Those OAS recipients who also qualify for the Guaranteed Income Supplement will receive a one-time payment of $500. While OAS amounts received are usually included in taxable income, this one-time supplement of $300 or $500 will be tax-free.
Although we’re just halfway through the calendar year, 2020 has already been a very stressful year for many Canadians from a financial perspective. Planning now to take account of changed financial and tax circumstances arising from the current situation will help ensure that those stresses don’t included an unexpected tax headache.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.