Some changes of note for the 2023 tax year:

Canada Training Credit

The Canada Training Credit is available for eligible individuals between the ages of 25 and 65 at the end of the year who have earned between $10,944 and $155,625 in 2023. These individuals will have added an amount of $250 to any previous limit for the Canada Training Credit, which can be used if the taxpayer has tuition or education amounts to claim on their income tax return. The maximum available Canada Training Credit limit for a taxpayer in 2023 is now $,1000 so long as the taxpayer was eligible for the limit every year since its inception.

Canada Workers Benefit Advance Payments

The Canada Workers Benefit is a refundable tax credit that is available to taxpayers and their families who are working and earning a low income. This credit has been extended for the 2023 tax year to include a $15,239 secondary earner exemption, which will make the credit available to more Canadians.

Effective for 2023, advance payments of the CWB were issued automatically to taxpayers who were entitled to receive this benefit in the previous tax year. These payments began in July of 2023 and were made in the form of three payments with the total paid representing 50% of the CWB benefit eligibility for the prior taxation year. These taxpayers will be issued an RC210 form to include on their 2023 income tax return.

Climate Action Incentive

New Climate Action Incentive amounts for 2023 income tax returns (increased from 2022) in Ontario are:

·        $560 for single adult or first adult in couple

·        $280 for second adult in couple or first child of a single parent

·        $140 for each child under 18 (starting with second child for a single parent)

 The CAIP continues to be paid as a quarterly benefit, rather than a refundable tax credit on the income tax return. Individuals will need to file an income tax return to be eligible for these payments.

Home Office Expenses for Employees

The temporary flat rate method and the simplified T2200S methods for claiming home office expenses are discontinued for tax year 2023. Employers must complete and sign the T2200 form and provide a copy to the employee if the employee chooses to deducted expenses from their income. These expenses can include work-space-in-the-home expenses, vehicle expenses, and a variety of other expenses.

Multigenerational Home Renovation Tax Credit (“MHRTC”)

Effective Jan 1, 2023, this is a new refundable tax credit of up to $7,500 (15% of $50,000) that is available for a qualifying renovation to an eligible dwelling that is completed to allow a qualifying individual to live with a qualifying relation. Only one qualifying renovation can be claimed per qualifying individual in their lifetime and the credit must be claimed in the taxation year that includes the end of the renovation period (i.e. when final inspection or proof of project completion is received). This means some taxpayers will want to look for receipts for expenses that occurred prior to 2023. The claim is for costs spent to construct a secondary suite in the taxpayer’s home for a senior (65+) or disabled adult.  These tenants are known as the “eligible person.” In the case of adults with disabilities, these individuals must be at least 18 years of age and must be eligible for the Disability Tax Credit. The eligible person must be a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the eligible person and their spouses/common law spouse.  The credit may be split between claimants so long as the total cost of the claim does not exceed $50,000. One qualifying renovation is permitted for of an eligible person over their lifetime. A “qualifying individual” who can make this claim will ordinarily reside or intend to reside in the dwelling being renovated within 12 months after the end of the reno period or be the spouse or qualifying relation of the “eligible person”. The renovation, alteration or addition to the eligible dwelling must be of an “enduring nature” and integral to the eligible dwelling.  It must, of course, be undertaken to enable an eligible person to reside there with their qualifying relation. It is also important to establish a secondary unit within the dwelling which is self-contained.  It must be a private residence with a private entrance, kitchen, bathroom facilities and sleeping area. It can be newly constructed or created from an existing living space. Building permits for establishing a secondary unit must be obtained and renovations must be completed in accordance with the laws of the jurisdiction in which an eligible dwelling is located. The vendor must be GST/HST registered.