Amateur Athlete Trusts (AAT)
Starting in 2014, contributions to an Amateur Athlete Trust will now qualify as earned income for the purposes of calculating the RRSP contribution limit of the trust’s beneficiary. These beneficiaries can now elect for such contributions made in 2011, 2012 and 2013 to also qualify for calculating 2014 RRSP contribution room.
Canada Child Benefit
Payments under this new benefit began in July 2016. This program has replaced the Canada Child Tax Benefit (CTTB) as well as the Universal Child Care Benefit (UCCB). This benefit will not be indexed until July, 2020.
Canada Caregiver Credit
Beginning with tax year 2017, the Infirm Dependent Credit, Caregiver Credit, and Family Caregiver Credits have been consolidated into the new Canada Caregiver Credit (CCC). Taxpayers can now claim this new credit for infirm dependents 18+ years of age that do not live with them. Non-infirm senior parents or grandparents will NOT be eligible to claim for this credit.
Donations made to eligible charitable organizations may be eligible for non-refundable tax credits. Donations may be carried forward for up to 5 years. Taxpayers may choose to claim donations made in multiple years at the same time, so as to take advantage of the higher credit percentage for donations exceeding $200.
Please refer to the 'First-Time Donor Super Credit' section below for additional information.
Charitable Donations – New Tier for High Income Taxpayers
Beginning in 2016, there are new tiers being applied to charitable donations for taxpayers who are subject to the new 33% tax bracket. For taxpayers whose federal tax rate is 33%, charitable donations will be calculated as:
· 15% on 1st $200
· 33% on the amount of donations (after the 1st $200) that is equal to the amount of income being taxed at 33%
· Remainder at 29%
· First time donors will receive 25% of $1,000 in charitable donations
Note that the first time donor super credit (available to all taxpayers) will expire starting with tax year 2017. Please refer to the 'First-Time Donor Super Credit' section below for additional information.
Child Care Expenses – Increased Limits
The maximum amount of child care expenses that can be deducted were increased in 2015:
Previous Amounts New Amounts for 2015
Per Child Under 7 $7,000 $8,000
Per Child Aged 7-16 $4,000 $5,000
Infirm dependents over 16 $4,000 $5,000
Per severely disabled child $10,000 $11,000
Children’s Arts Tax Credit
Starting with the 2011 tax year, this is a 15% federal tax credit on up to $500 of eligible expenses per child paid in a year, yielding a maximum credit of up to $75/child. The credit is available for the enrolment of a child, which is under 16 years of age at the beginning of the year, in an eligible program of artistic, cultural, recreational or developmental activities. For a child who is under 18 at the beginning of the year and is eligible for the disability tax credit, an additional 15% credit of $500 ($75) is available when a minimum of $100 is paid in eligible expenses.
The allowable amount for the Children’s Arts Tax Credit has been reduced to $250 per child for the 2016 tax year. Additional amounts are available for children who qualify for the disability tax credit. Any amounts paid in 2016 for eligible activities that occur in 2017 will be eligible. Beginning with tax year 2017, this tax credit has been eliminated.
Children’s Fitness Tax Credit - Now Refundable
Beginning in 2015, this credit has become refundable, meaning that even if a taxpayer has no federal tax to pay for the year, the credit will be paid to the taxpayer. This is a refundable federal tax credit of 15% of eligible child fitness expenses for children 16 years of age or under (18 years or under if the child is eligible for the disability amount). Taxpayers may claim a maximum of $1,000/child per tax year, yielding a maximum credit of up to $150/child. Additional credit is available for children with disabilities.
Federal - The federal amount for the Child Fitness Tax Credit has been increased in 2014 to a maximum of 15% of $1,000 per child (increased from 15% of $500 per child in 2013). For 2014, this tax credit remains non-refundable (meaning that it can reduce tax to zero, but any remaining credit is lost), however, beginning in 2015, this credit has become refundable (meaning that even if a taxpayer has no federal tax to pay for the year, the credit will be paid to the taxpayer). There is also an additional credit for disabled children who are 18 years of age or younger and eligible for the disability tax credit. This additional credit applies if the taxpayer incurs at least $100 of eligible expenses, in which case, an additional $75 federal tax credit is available. This additional tax credit for disabled dependents will also change from non-refundable to refundable for the 2015 tax year.
Provincial – The maximum tax credit for combined Fitness and Arts credits for Ontario in 2014 is 10% of $541 per child.
While this credit remains refundable for 2016, the allowable amount has been reduced to $500 per child. Additional amounts are available for children who qualify for the disability tax credit. Any amounts paid in 2016 for eligible activities that occur in 2017 will be eligible. Beginning with tax year 2017, this tax credit has been eliminated.
Child Care Expenses
Child care expenses can be claimed for child care expenses made to:
· Caregivers providing child care services
· Day nursery schools and daycare centres
· Educational institutions for the part of the fees that relate to child care services
· Day camps and day sports schools where the primary goal of the camp is to care for children
· Boarding schools, overnight sports schools, or camps where lodging is involved Eligible expenses are deductible from income if they enable you or your spouse to be employed or in school. The expenses must generally be deducted from the spouse with lower income for that tax year. The maximum deductions are $8,000/child under 7 years of age, $5,000/child aged 7-16, and $11,000 for disabled children. Applicable deductibles are $175/week/child under 7 years of age, $100/week/child aged 7-16, and $250/week/child for disabled children. In addition, the deduction cannot be greater than 2/3 of the taxpayer’s earned income for the year.
Family Tax Cut (“Income Splitting”)
The Family Tax Cut is a new non-refundable tax credit of up to $2,000 for eligible couples with minor children. The credit will be effective for 2014 and subsequent years and is based on the net reduction of federal tax that would be realized if up to $50,000 of an individual's taxable income was transferred to the individual's eligible spouse or common-law partner. This would take advantage of a spouse's lower income tax bracket. Only one spouse may claim the Family Tax Cut; it cannot be shared. This tax credit does NOT change the actual net income or taxable income of either spouse and as such, it does not affect other federal or provincial benefits and tax credits. This tax credit was in effect until tax year 2015 and was discontinued beginning in tax year 2016.
First-Time Donor's Super Credit (FDSC)
Beginning in tax year 2013, the federal government is offering a temporary non-refundable credit called the First-Time Donor's Super Credit to supplement the existing credit for charitable donations. An individual will be considered a first-time donor if neither the individual nor the individual’s spouse or common-law partner has claimed the Charitable Donations Tax Credit (CDTC) in any of the five preceding tax years. This new credit effectively adds 25% to the rates used in the calculation of the CDTC for up to $1,000 of monetary donations. Only donations of money that are made after March 20, 2013 will qualify for the FDSC.
First-Time Home Buyer’s Tax Credit
This is a non-refundable federal tax credit of 15% for eligible first-time home buyers; this is in addition to the Home Buyer’s Plan available to first-time home buyers. Taxpayers may claim a maximum of $5,000, yielding a maximum credit of $750. To be eligible, the home must be acquired (i.e. closed) after Jan 27, 2009 and the taxpayer cannot have lived in another home owned by themselves or their spouse or common-law partner in the year of acquisition or any of the four preceding years.
GST/HST Credit Administration
Starting in 2014, individuals no longer need to apply for the GST/HST credit; CRA will now automatically determine eligibility for every individual who files a return. A notice of determination will be sent to those who are eligible for the credit.
Home Buyer’s Plan
The Home Buyer’s Plan allows a taxpayer to borrow funds temporarily from an existing RRSP to buy a house as long as neither spouse/common-law partner has owned a home in the last 5 years. The maximum amount that can be withdrawn tax-free is $25,000 per individual. Both spouses may withdraw for a total maximum of $50,000. This RRSP loan must be repaid within 15 years, beginning on the 2nd year following the year of withdrawal (minimum payment of 1/15 of the original withdrawn amount per year) and unlike regular RRSP contributions, the amount of the payment is not deductible from income. The taxpayer may participate in the Home Buyer’s Plan in conjunction with the Lifelong Learning Plan (see below).
LLP (Lifelong Learning Plan)
The Lifelong Learning Plan allows a taxpayer to withdraw funds temporarily from an existing RRSP for full-time post-secondary education. The maximum amount that can be withdrawn tax-free is $20,000 total, and $10,000/year. The taxpayer’s spouse or common-law partner may also withdraw from the RRSP to double the maximums. This RRSP loan must be repaid within 10 years, with a minimum payment of 1/10 of the original withdrawn amount per year). LLP repayments are not deductible for tax purposes. Once repaid, the taxpayer can participate in the LLP again with the same maximums and requirements. The taxpayer may participate in the LLP program in conjunction with Home Buyer’s Plan (see above).
A taxpayer may deduct eligible moving expenses from the employment or self-employment income earned at his/her new place of employment if he/she has moved at least 40 kilometers closer to the new location. Similarly, a student may deduct moving expenses if he/she has moved 40 kilometers closer to the educational institution to study as a full-time student. Students can only deduct these expenses from scholarships, bursaries, fellowships and certain grants and prizes that are required to be part of their income. The new home must be the ordinary residence of the taxpayer and generally, the old and new home locations must both be from within Canada.
Ontario Children’s Activity Tax Credit
The Ontario Children’s Activity Tax Credit is a refundable tax credit introduced for the 2010 tax year to assist parents with the cost of enrolling their children in fitness and non-fitness related extra-curricular activities. This provincial tax credit is applicable to activities that are also eligible for the federal Children’s Fitness tax credit, but also includes non-fitness extra-curricular activities. Please visit the CRA website for a full list of eligible activities. Parents can claim up to $541 per child (under 16 years of age). Additional amounts are available for children with disabilities.
Ontario Child Benefit (OCB)
The Ontario Child Benefit is a non-taxable monthly payment to help families with low incomes to provide for their children.
Ontario Community Food Program Donation Tax Credit
Starting in 2014, a new non-refundable tax credit introduced by the Ontario government allows an individual to claim 25% of the fair market value of agricultural products donated to eligible food programs in Ontario, including food banks. This credit can be claimed in addition to the charitable donation tax credit.
Ontario Energy and Property Tax Credit
Beginning with the 2010 tax year, the Ontario Sales Tax Credit and the Ontario Property Tax Credit have been separated on income tax returns. The province of Ontario has changed the calculation for the Property Tax Credit for credits being paid out in 2011. Legislated increases for this credit in 2010 increase the energy and property tax relief provided to low- to middle-income individuals and families by 70 percent compared to 2009. If rent or property tax amounts paid in the past have not been of benefit, it is worth re-checking again this year to see if you now qualify for this credit.
Ontario Healthy Homes Renovation Tax Credit
This is a refundable tax credit that is available starting in 2012 to seniors (age 65+) and family members who live with them. Qualifying taxpayers can claim up to $10,000 in eligible expenses for a 15% credit (i.e. a maximum of $1,500). For the 2012 tax year, taxpayers can claim eligible expenses related to work billed between October 1, 2011 and December 31, 2012. Only certain expenses related to making the home safer and more accessible qualify for this tax credit, such as non-slip flooring in a bathroom, installing a hand-held shower and installing wheelchair ramps. General home renovations including plumbing, electrical, roofing, furnace/air conditioning, and installing new windows are NOT eligible for this tax credit.
Ontario Property Tax Credit
The Ontario property tax credit provides relief to low- to middle-income homeowners and tenants. This tax credit can be claimed by taxpayers who were 16 years or older, resident of Ontario on December 31 of the tax year being filed and paid rent or property tax on their principal residence. You cannot claim this credit if you were under 19 years of age at the end of the tax year and lived with someone who received a Canada Child Tax Benefit payment for you in the year or claimed you as a wholly dependent person.
Effective July 2012 and for subsequent years, payments of the Ontario Sales Tax Credit, the Northern Ontario Energy Credit and the Ontario Energy and Property Tax Credit will be combined into a single benefit payment called the Ontario Trillium Benefit.
Ontario Trillium Benefit
Effective July 2012, payments of the Ontario Sales Tax Credit, Ontario Energy and Property Tax Credit and Northern Ontario Energy Credit will be combined into a single benefit payment called the Ontario Trillium Benefit.
Ontario Trillium Benefit (OTB) Payment Schedule
New rules were implemented for the 2013 and subsequent tax years for the payment schedule of the Ontario Trillium Benefit. In general, if your OTB entitlement for the year is:
· $2 or less, you will not receive a payment (in accordance with the general CRA rule of not charging or refunding amounts of less than $2).
· Between $2 and $10, it will be increased to $10 and paid out as a single payment.
· Between $10 and $360, and if you file your tax return by April 30th, 2014, you will receive a single payment on July 10th, 2015. If you file your return late, it will be paid in your first payment month.
· Over $360, based on your 2014 tax return, you will have a choice of receiving your OTB payments monthly or as a single payment at the end of the benefit year (June, 2015). This new rule was implemented starting in 2014 for tax year 2013 and subsequent tax years.
Ontario Senior Homeowners’ Property Tax Grant
This grant is an annual amount provided to help offset property taxes for seniors with low to middle incomes who own their own home. In 2009, the maximum grant is $250. In 2010 and subsequent years, the maximum grant is $500. To be eligible, the taxpayer must
· Be 64 years or older on December 31, 2009
· Be a resident of Ontario on December 31, 2009
· Have owned and occupied a principal residence on December 31, 2009 (or owned by spouse/common-law partner) for which the taxpayer or spouse/common-law partner paid Ontario property taxes in 2009
· Not have been confined to a prison or similar institution on December 31, 2009
· Meet the income requirements to receive the grant
Ontario Sales Tax Credit (OSTC)
The Ontario Sales Tax Credit program is designed to help low income individuals and families with the sales tax they pay. The amount received is NOT subject to tax and depends on the family size adjusted family net income. The payment amount is adjusted for inflation each year. The amount received by single taxpayers who have an adjusted family net income of over $20,360 will be reduced by four per cent of income over $20,360. Families (including single parents) with over $25,450 in adjusted family net income will see their.payments reduced by four per cent of their income over $25,450.
Effective July 2012 and for subsequent years, payments of the Ontario Sales Tax Credit, the Northern Ontario Energy Credit and the Ontario Energy and Property Tax Credit will be combined into a single benefit payment called the Ontario Trillium Benefit and delivered on a monthly basis.
Ontario Sales Tax Transition Benefit
The Ontario Sales Tax Transition Benefit was introduced for 2009 to assist eligible Ontario individuals and families with the transition to the new sales tax system (HST). Taxpayers must be 18 years of age or older to be eligible for this benefit. Taxpayers will receive 3 payments: June 2010, December 2010, and June, 2011 at a maximum of $300 per individual and $1,000 for single parents and couples. The maximum payment is reduced by 5% of the adjusted family net income of $80,000 for single individuals and $160,000 for single parents and couples.
Ontario Seniors’ Public Transit Tax Credit
This is a refundable credit available to seniors (65 years of age or older) who lived in Ontario by the end of the year and have incurred eligible public transit expenses. Taxpayers can claim up to $3,000 in expenses per year ($1,500 for 2017, as only half of the year is applicable), and receive up to $450 each year ($225 in 2017).
Pre-Authorized Debit Agreement
Beginning in tax year 2016 and continuing for 2017, taxpayers have the option to set up a one time payment for individual income tax amount owing on their T1 tax return. The taxpayer would need to complete the required portion of the T183 form and the information must be submitted when the return is eFiled.
Public Transit Tax Credit
This is a non-refundable federal tax credit of 15% of eligible public transit expenses such as local buses, streetcars, subways, commuter trains/buses, or local ferries.
The Federal Public Transit Tax Credit has been eliminated for amounts paid for eligible transit passes after June, 2017.
The Province of Ontario has introduced a credit for certain amounts paid by seniors beginning July 1, 2017 (See the ‘Ontario Seniors’ Public Transit Tax Credit’ section above for more information).
Retirement Income Security Benefits (RISB) for Armed Forces
Beginning in 2016, these pensions will now be eligible for pension splitting.
RRIF Withdrawal Rates – Minimum amounts reduced
Starting in 2015, the minimum RRIF withdrawal percentage for taxpayers who were 71 at the beginning of the year reduce from 7.38 per cent to 5.28 per cent. For those that are 72, the minimum is reduced from 7.48 per cent to 5.40 per cent, and so on.
With the RRIF holder being forced to withdraw less than before, he or she leaves more in their RRIF account to (hopefully) grow or accumulate. At the very least, they should end up depleting the capital at a slower rate.
For the 2009 tax year, contributions made in the remainder of 2009 as well as the 1st 60 days of 2010 can be claimed. Any contributions made to an RRSP account within the first 60 days of a given year should be reported on the previous year’s income tax return.
Safety Deposit Box Deduction (Removed)
Individual taxpayers will no longer be allowed to claim a deduction for safety deposit boxes for the 2014 and subsequent taxation years.
Search and Rescue Volunteers’ Tax Credit (SRVTC)
Starting in 2014, a new non-refundable tax credit is available for qualifying volunteers who perform at least 200 hours of eligible search and rescue services in the year. This $3,000 credit is similar to the existing Volunteer Firefighter Tax Credit (VFTC), and in fact, the qualifying volunteer hours can be combined for both types of volunteer activity, however, only one of the tax credits can be claimed.
Teacher and Early Childhood Educator School Supply Tax Credit
Starting in 2016 and continuing for 2017, this new tax credit will allow employee taxpayers who are eligible educators to claim a 15% refundable tax credit based on an amount of up to $1,000 of purchases of eligible teaching supplies by the employee in a taxation year. To be eligible, the supplies must be:
· purchased for teaching or facilitating learning, and directly consumed or used in an elementary or secondary school or in a regulated child care facility in the performance of the teacher or educator’s duties of employment;
· not reimbursable and not subject to an allowance or other form of assistance
· not deducted or used in calculating a deduction from any person’s income for any taxation year.
· consumable, with the exceptions of games and puzzles, books, containers such as plastic boxes or bankers boxes, and educational software, which will all be eligible
Other non-consumable items such as tablets, computers, rugs for children to sit on are NOT eligible.
To claim this credit, the taxpayer must be able to produce a signed certificate from a school official on request
TFSA (Tax-Free Savings Account)
Contributing to a Tax-Free Savings Account allows taxpayers to set money aside, tax-free, throughout their lifetimes. Although contributions to a TFSA and the interest on money borrowed to invest in a TFSA are not tax deductible, the income generated in the TFSA is tax-free when withdrawn. To contribute to a TFSA, the taxpayer must be a resident of Canada, at least 18 years of age, and have a valid social insurance number (SIN).
Tradesperson’s Tools Expenses
Deduct up to $500 from your net income for eligible tools purchased to earn employment income as a tradesperson. This cost includes and GST, PST, or HST paid.
Universal Child Care Benefit (UCCB)
The Universal Child Care Benefit is available to families with children under the age of 6 years and was paid in instalments of $100 per month per child in 2014 and prior years. Taxpayers receiving this benefit can expect to receive government form RC62 and are required to report this income when filing their tax return.
Universal Child Care Benefit – Increased and Expanded
The UCCB was increased from $100/month to $160/month for children up to age 6, and expanded to pay out $60/month for children aged 6-17 starting in 2015. Although the increases took effect in January, 2015, the amounts were not being paid until July. As such, families received up to $420 per child in July 2015 for the months of January to July 2015, and began receiving the additional $60 on a monthly basis beginning in August, 2015.
Universal Child Care Benefit for Single Parents
The Universal Child Care Benefit (UCCB) is available to families with children under the age of 6 years and is paid in installments of $100 per month per child. This benefit is included as income for the lower-income spouse in a two-parent family. Effective 2010, however, a single parent can designate these payments to be included in the income of the parent’s dependent child for whom the ‘equivalent to spouse’ credit is claimed. If there is no equivalent to spouse, this income can be designated to any of the children for whom the benefit is paid.
Volunteer Firefighters Tax Credit
Starting with the 2011 tax year, a non-refundable tax credit equal to 15% of $3,000 ($450) is available for volunteer firefighters who have completed at least 200 hours of volunteer firefighting services with one or more fire departments in the year.
Please refer also to the 'New Tax Credits for 2014' page for information about the new Search and Rescue Volunteers' Tax Credit introduced in 2014.