The federal government has announced that eligible Canadians will receive a $250 Working Canadians Rebate to help them meet recent increases in the cost of living. The non-taxable rebate payment will ...
The federal government recently announced that a temporary tax holiday would be provided from the imposition of the GST/HST. The two-month holiday will run from December 14, 2024, to February 15, 2025...
The most recent release of Statistics Canada’s Consumer Price Index shows an increase in the overall rate of inflation for the month of October 2024. During October, the overall inflation rate stood...
Federal personal income tax brackets and tax credit amounts are indexed, with such indexing based on year-over-year changes in the overall Consumer Price Index. The Canada Revenue Agency (CRA) recentl...
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...
The most recent release of Statistics Canada’s Labour Force Survey shows no change in the overall unemployment rate for the month of October. That rate stood at 6.5%, the same rate recorded for the ...
Canadians who earn income from the online economy are required to report all such income earned on their annual tax returns. To assist the tax authorities in the enforcement of those reporting obligat...
The federal government has announced the Canada Pension Plan contribution percentages and amounts which will be in effect during 2025. Maximum pensionable earnings for 2025 will be $71,300, and the ba...
The Canada Revenue Agency (CRA) provides a comprehensive guide to the federal tax rules relevant to post-secondary students during the current taxation year. That guide, P105 – Students and Income T...
In its budget for the 2024-25 year, the federal government announced that a new Canada Carbon Rebate (CCR) would be provided for small businesses. In order to receive the CCR, a business must be a Can...
The federal government has announced the Employment Insurance (EI) premium rates which will be payable by employees and employers during the 2025 calendar year. For 2025, those rates are set at $1.64 ...
In its regularly scheduled interest rate announcement made on October 23, the Bank of Canada announced that the Bank Rate would be lowered by one-half percentage point, from 4.5% to 4.0%. In the press...
The October release of the federal Labour Force Survey shows a slight reduction in the overall rate of unemployment recorded for September 2024, as compared to the previous month. That rate declined b...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation fell to 1.6% for the month of September 2024. As noted in the StatsCan release, that rate...
Millions of Canadians earn income by selling goods or services through websites or apps, and the revenue from such sales represents income to those vendors, which they are required to report on their ...
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...
Canadian businesses which have sales of taxable goods or services in excess of $30,000 must register for GST/HST purposes and are required to file returns and remit GST/HST amounts on a prescribed sch...
The Bank of Canada has provided the dates on which it will make scheduled interest rate announcements during the 2025 calendar year. Those dates are as follows. Wednesday, January 29, Wednesday, Marc...
Benefit amounts provided under the federal Old Age Security (OAS) program are indexed to inflation and adjusted at the beginning of each quarter of the calendar year. The federal government has announ...
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...
The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows that the overall rate of inflation for the month of August 2024, as measured on a year-over-year basis, stood at 2.0% ...
Finance Canada has announced that, effective as of December 15, 2024, all first-time home buyers and all buyers of new-build residential properties will qualify for 30-year amortization periods (the t...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight increase in the overall unemployment rate for the month of August. That rate rose to 6.6%, as compared to the 6.4% r...
The third individual income tax instalment payment for the 2024 tax year is due and payable on or before September 15, 2024. As September 15 falls on a Sunday this year, tax instalments due will be co...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for 2024, as well as the rates that will apply for the purpose of calculating emp...
In its regularly scheduled interest rate announcement made on September 4, the Bank of Canada reduced interest rates by 0.25%, meaning that the Bank Rate is now 4.5%. In its press release announcing t...
The federal government provides a non-refundable tax credit for volunteer firefighters and search and rescue volunteers who perform at least 200 hours of combined volunteer service during the year. Th...
The federal, provincial, and territorial governments provide a number of child and family tax credit and benefit programs, and the current benefit year for such programs began on July 1, 2024. In most...
Individuals who pay income tax by instalments must make the third such instalment payment for the 2024 tax year on or before September 15th, 2024. As that date falls on a Sunday this year, such paymen...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation (as measured on a year-over-year basis) stood at 2.5% for the month of July - the lowest ...
The most recent release of Statistics Canada’s Labour Force Survey shows no change in the overall unemployment rate for the month of July 2024. That rate stood at 6.4%, the same rate recorded for Ju...
In this year’s budget, the federal government announced that the inclusion rate for all capital gains earned by corporations after June 24, 2024 would increase from 50% to 66.6%. At the same time, t...
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...
The federal and provincial governments offer a range of tax credit and benefit programs which provide tax-free payments to eligible Canadians. The current benefit year for such credit and benefit prog...
Home purchasers who take out a mortgage must pay back that mortgage amount (plus interest) over a specified period of time, known as the amortization period. While the standard amortization period is ...
The federal and provincial governments offer a number of tax credits and benefits for which both eligibility and the amount receivable are determined, in part, by the income of the recipient. In order...
The Canada Revenue Agency (CRA) administers a program – the Taxpayer Relief Program – under which interest and penalty charges can be waived where taxpayers are unable to meet their tax filing or ...
In its regularly scheduled interest rate announcement made on July 24, the Bank of Canada announced that rates would be lowered by 25 basis points. As a result, the Bank Rate now stands at 4.75%. In t...
The Canada Revenue Agency has issued a News Release reminding taxpayers and mental health service providers that mental health services are now generally (except in the province of Québec) exempt fro...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation declined slightly during the month of June 2024. That rate stood at 2.7%, as compared to ...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight increase in the overall rate of unemployment during the month of June 2024. That rate stood at 6.4%, as compared to ...
In this year’s budget, the federal government announced that the Canada Carbon Rebate program would be expanded to be available to small businesses. In order to be eligible for the rebate a small bu...
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...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation during the month of May 2024 stood at 2.9% – an increase from the 2.7% inflation figure...
The federal and provincial governments provide eligible taxpayers with a range of refundable tax credit and benefit amounts. Such benefits are generally paid on a monthly or quarterly basis and are re...
The Old Age Security (OAS) benefit paid to Canadian residents aged 65 and older is indexed quarterly to changes in the Consumer Price Index. The federal government recently announced that, for the thi...
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 announced in the 2024-25 federal budget, the percentage of capital gains included in income will increase from 50% to 66.6%, effective for gains realized after June 24, 2024. The change in the incl...
The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of May increased slightly, to 6.2%. The comparable rate for April 2024 was 6.1%. Acr...
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 2024, as well as the rates that will apply for th...
All self-employed taxpayers, and their spouses, are required to file an individual income tax return for the 2023 tax year on or before Monday June 17, 2024. All taxpayers (including those who are sel...
In its regularly scheduled interest rate announcement made on June 5, the Bank of Canada announced that rates would be lowered by 25 basis points. As a result, the Bank Rate now stands at 5.0%. The ch...
In its 2024-25 budget, the federal government announced the creation of the Canada Carbon Rebate for Small Businesses, which will be provided to eligible Canadian-controlled private corporations which...
The second individual income tax instalment payment for the 2024 tax year is due and payable on or before Monday June 17, 2024. Taxpayers who are subject to the instalment payment requirement will hav...
The Canada Revenue Agency’s digital services make it possible for Canadian taxpayers to manage all of their personal tax filing, payment, and appeal rights and obligations online, on the Agency’s ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation declined slightly during the month of April. For that month, the inflation rate stood at ...
The Canada Revenue Agency has issued a notice indicating that applications for the GST/HST rebate for new purpose-built rental housing (PBRH) can be made online, on the CRA website, as of May 13, 2024...
The most recent release of Statistics Canada’s Labour Force Survey shows that, while employment during the month of April increased by 90,000, the overall unemployment rate was unchanged from March,...
Self-employed taxpayers (and their spouses) are required to file an individual income tax return for the 2023 tax year on or before June 17, 2024. The Canada Revenue Agency (CRA) recently updated and ...
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...
All Canadian individual taxpayers were required to pay any balance of income tax owed for the 2023 tax year on or before April 30, 2024. While self-employed taxpayers and their spouses have until June...
The 2024-25 federal budget included a measure to increase the percentage of capital gains which must be included in income by corporations and trusts and, in some circumstances, individual taxpayers. ...
Most Canadian individual taxpayers are required to file their income tax return for the 2023 tax year on or before Tuesday April 30, 2024. The exception is self-employed taxpayers (and their spouses) ...
All Canadian individual taxpayers who have tax amounts owing for the 2023 tax year must pay those amounts in full on or before Tuesday April 30, 2024. Where amounts owed are not paid in full by that d...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation rose from 2.8% in February 2024 to 2.9% in March 2024. Both rates are as measured on a ye...
The federal home buyers' plan (HBP) allows eligible first-time home buyers to withdraw up to $35,000 from a registered retirement savings plan (RRSP) to purchase or build a first home. No tax is payab...
Budget 2024 proposes to repeal the exception to the debt forgiveness rules for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations. This change would subject bankru...
Budget 2024 proposes to remove the tax-indifferent investor exception (including the exchange traded exception) to the anti-avoidance rule. This measure would simplify the anti-avoidance rule and prev...
Budget 2024 proposes amendments to the Income Tax Act to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (includ...
Budget 2024 proposes to introduce a supplementary rule to strengthen the tax debt anti-avoidance rule, applicable in the following circumstances: there has been a transfer of property from a tax debt...
Legislative proposals to implement the excessive interest and financing expenses limitation (EIFEL) rules are currently before Parliament in Bill C-59. The EIFEL rules provide an exemption for interes...
Budget 2024 proposes to return a portion of fuel charge proceeds from a province via the new Canada Carbon Rebate for Small Businesses, an automatic, refundable tax credit directly for eligible busine...
Budget 2024 proposes to provide immediate expensing for new additions of property in respect of Class 44 (patents or the rights to use patented information for a limited or unlimited period), Class 46...
Budget 2024 proposes to provide an accelerated CCA of 10% for new eligible purpose-built rental projects that begin construction on or after Budget Day and before January 1, 2031, and are available fo...
Budget 2024 proposes adjustments to the Clean Technology Manufacturing investment tax credit to provide greater support to businesses engaged in the production of qualifying materials at polymetallic ...
Budget 2024 provides the design and implementation details of the Clean Electricity investment tax credit announced in Budget 2023. Eligible corporations would be: taxable Canadian corporations; prov...
Budget 2024 proposes to increase the home buyers' plan (“HBP”) withdrawal limit from $35,000 to $60,000. This increase would also apply to withdrawals made for the benefit of a disabled individual...
Budget 2024 proposes to extend the period for which qualifying foreign charities are registered as a qualified donee from 24 months to 36 months. In addition, foreign charities would be required to su...
Budget 2023 proposed tax rules to facilitate the creation of employee ownership trusts (“EOTs”). These legislative proposals are currently before Parliament in Bill C-59. The 2023 Fall Economic St...
Budget 2024 proposes to expand the list of expenses recognized under the Disability Supports Deduction, subject to the specified conditions, such as the cost of: an ergonomic work chair (including an...
Budget 2024 proposes to amend the Income Tax Act to extend eligibility for the Canada Child Benefit (“CCB”) in respect of a child for six months after the child's death (the "extended period"), if...
Budget 2023 announced amendments to the Income Tax Act that would change the Alternative Minimum Tax (“AMT”) calculation. Draft legislative proposals to implement these changes were published for ...
Budget 2024 proposes to double the credit amount for the Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit from $3,000 to $6,000, applicable to the 2024 and subsequent ...
Budget 2024 proposes to increase the capital gains inclusion rate from one half to two thirds for corporations and trusts, and from one half to two thirds on the portion of capital gains realized in t...
Budget 2024 proposes to introduce the Canadian Entrepreneurs' Incentive, which would reduce the tax rate on capital gains on the disposition of qualifying shares by an eligible individual. Specificall...
The amount of the Lifetime Capital Gains Exemption (“LCGE”) is $1,016,836 in 2024 and indexed to inflation. Budget 2024 proposes to increase the LCGE to apply to up to $1.25 million of eligible ca...
In its regularly scheduled interest rate announcement made on April 10, the Bank of Canada indicated that, in its view, no change was required to current interest rates. Accordingly, the Bank Rate rem...
The most recent release of Statistics Canada’s Labour Force Survey shows a small increase in the rate of unemployment during the month of March. That rate increased by 0.3%, to 6.1%. Among demograph...
The federal government provides investors in flow-through shares of qualifying mineral exploration companies with a non-refundable 15% tax credit. That mineral exploration tax credit program was sched...
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...
Increases to benefits payable under the Old Age Security program are based on changes to the Consumer Price Index, with such benefit amounts indexed quarterly. The federal government has announced tha...
Post-secondary students are entitled to claim a number of tax deductions and credits for costs relating to their education. In addition, such students are frequently in a position to claim several tax...
The most recent release of Statistics Canada’s Consumer Price Index shows a slight decline in the overall inflation rate for the month of February 2024. That rate stood at 2.8%, a 0.1% decline from ...
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 2024, as well as the rates that will apply for the purpose ...
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...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight increase in the overall rate of unemployment during the month of February. That rate rose to 5.8%, as compared to th...
Finance Canada has announced that the federal budget for the upcoming (2024-25) fiscal year will be brought down on Tuesday April 16, 2024, at around 4 p.m. Once the budget measures are announced, the...
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 5.25...
The Canada Revenue Agency has published the income threshold which will apply for purposes of the Old Age Security (OAS) clawback threshold during 2024. Individuals who receive OAS benefits can have u...
Canadian businesses which have registered for goods and services tax/harmonized sales tax (GST/HST) purposes must file returns with the federal government on a prescribed schedule, which can be monthl...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation declined to below 3% during the month of January 2024. The inflation rate for that month (as meas...
The Canada Revenue Agency has announced that its digital services for the filing of individual income tax returns for the 2023 tax year are now open. Both NETFILE and ReFILE services are available 21...
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...
The most recent release of Statistics Canada’s Labour Force Survey shows a slight drop in the overall rate of unemployment for the month of January 2024. That rate declined by 0.1%, from 5.8% to 5.7...
The Canada Revenue Agency (CRA) has announced that the filing deadline for individual income tax returns for the 2023 tax year will be Tuesday April 30, 2024. Self-employed individuals and their spous...
The Canada Revenue Agency has announced that the deadline for making registered retirement savings plan (RRSP) contributions which can be deducted on the return for the 2023 tax year will be Thursday ...
While the majority of Canadian taxpayers file their income tax returns by electronic means, paper returns can still be filed with and processed by the Canada Revenue Agency (CRA). The Agency will be s...
The Canada Revenue Agency has announced that its services for the online filing of individual income tax returns for the 2023 tax year will be available in mid-February. Both NETFILE and ReFILE servic...
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 regularly scheduled interest rate announcement made on January 24, 2024, the Bank of Canada indicated that, in its view, no change to current rates was needed. Accordingly, the Bank Rate remain...
Canadian taxpayers can still file individual income tax returns for the 2017 to 2022 tax years using the Canada Revenue Agency’s online tax filing service NETFILE. The NETFILE filing service provide...
The most recent release of Statistics Canada’s Consumer Price Index shows an increase in the overall rate of inflation for the month of December 2023. That rate stood at 3.4%, as compared to the 3.1...
During the pandemic, the federal government provided loan financing to eligible Canadian businesses through the Canada Emergency Business Assistance (CEBA) program. Such loan amounts provided are part...
The most recent release of Statistics Canada’s Labour Force Survey shows no change in the overall unemployment rate for the month of December 2023. That rate stood at 5.8%, the same as the rate reco...
The most recent release of Statistics Canada’s Consumer Price Index shows no change in the overall rate of inflation for the month of November 2023. That rate stood at 3.1%, the same rate recorded f...
Benefits paid under the Canada Pension Plan are indexed annually, based on changes to the Consumer Price Index. The federal government has announced that CPP benefits paid during the 2024 calendar yea...
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...
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 2024, as well as the rates that will apply for the purpo...
Employment and Social Development Canada (ESDC) has announced that Old Age Security (OAS) payments for the first quarter (January to March) of 2024 will increase by 0.8%. OAS benefit amounts are adjus...
Individual taxpayers who pay income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment for the 2023 tax year must be mad...
The most recent release of Statistics Canada’s Labour Force Survey shows little change in the general unemployment rate for the month of November 2023. For that month, unemployment stood at 5.8%, as...
In its regularly scheduled interest rate announcement made on December 6, 2023, the Bank of Canada indicated that, in its view, no change to current rates was needed. Accordingly, the Bank Rate remain...
The Canada Revenue Agency has issued a Tax Tip reminding employers and pension plan administrators of a change in T4 and T4A reporting rules, beginning with the 2023 tax year. All issuers of T4s and T...
Annual changes in personal income tax brackets and tax credit amounts are based on changes in the Consumer Price Index. The Canada Revenue Agency has announced that, for the upcoming 2024 tax year, su...
The 2023-24 Fall Economic Statement brought down by the Minister of Finance on November 21 indicates that the federal government will run a deficit of $40 billion for the current (2023-24) fiscal year...
The most recent release of Statistics Canada’s Consumer Price Index shows a drop in the overall inflation rate for the month of October, with the inflation rate for that month coming in at 3.1%, as ...
The federal government levies a 1% underused housing tax (“UHT”) on some owners of vacant or underused residential properties in Canada. Generally, affected property owners are foreign nationals, ...
Finance Canada has announced that the Fall Economic Statement for the 2023-24 fiscal year will be presented by the Minister of Finance on Tuesday November 21, 2023 at around 4 p.m. Once the measures i...
The most recent release of Statistics Canada’s Labour Force Survey shows little change in the unemployment rate recorded for the month of October 2023. That rate rose by 0.2%, from 5.5% to 5.7%, wit...
The Canada Revenue Agency (CRA) has announced the contribution percentages, limits, and amounts which will apply for purposes of the Canada Pension Plan (CPP) during 2024. Those figures include change...
Residents of Ontario, Nova Scotia, New Brunswick, Manitoba, Prince Edward Island, Saskatchewan, Alberta, and Newfoundland and Labrador receive a Climate Action Incentive Payment (CAIP) from the federa...
The federal government has announced that sales of home heating oil delivered between November 9, 2023 and April 1, 2027 will be exempt from the federal carbon tax. In the same announcement, the feder...
Canadians who hold “crypto-assets”, including cryptocurrency, are required to report any income or capital gains resulting from transactions involving such assets. The Canada Revenue Agency recent...
In its regularly scheduled interest rate announcement made on October 25, the Bank of Canada indicated that, in its view, no change to current interest rates was required. The Bank Rate accordingly re...
EFILE services for the filing of individual income tax returns for the 2023 tax year will be available sometime in early 2024. The Canada Revenue Agency recently issued a program update reminding EFIL...
The most recent release of Statistics Canada’s Consumer Price Index shows a drop in the overall rate of inflation for the month of September. That rate stood at 3.8%, as compared to the 4.0% inflati...
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...
The most recent release of Statistics Canada’s Labour Force Survey shows no change in the overall unemployment rate recorded for the month of September, with that rate remaining at 5.5% for the thir...
The Canada Employment Insurance Commission has announced the premium rates and limits which will apply for purposes of the Employment Insurance program during the 2024 calendar year. For 2024, as a re...
The federal government has announced that amounts paid under the Old Age Security (OAS) program will increase for the fourth quarter (October to December) of 2023. The increases are based on changes t...
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...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of August stood at 4.0%, as compared to the 3.3% inflation rate recorded fo...
The Canada Revenue Agency has issued a Tax Tip indicating that interest and penalty relief will be provided to taxpayers who are unable to meet their tax filing and/or payment obligations due to this ...
During the pandemic, the federal government provided the small business sector with financial assistance through the Canada Emergency Business Account (CEBA) program. That program provided eligible sm...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the last quarter of 2023, as well as the rates that will apply for the purpos...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of August stood at 5.5%, the same rate recorded for the month of July. As no...
Individual Canadian taxpayers who pay federal income tax by instalments make those instalment payments of tax four times each year, by specified deadlines. The third income tax instalment deadline for...
In its regularly scheduled interest rate announcement made on September 6, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the Bank Rate re...
During the pandemic a number of post-secondary students received the Canada Emergency Response Benefit (CERB) and, in some cases, have been asked to repay those benefits to the federal government. The...
Canadian parents can save for their children’s post-secondary education on a tax-assisted basis, through the federal Registered Education Savings Plan (RESP) program, which allows parents to contrib...
Beginning in 2023, Canadians are able to save for the purchase of a first home on a tax-assisted basis through the new First Home Savings Account (FHSA) program. One of the features of the FHSA progra...
For several years, businesses which file more than 50 information returns (slips and summaries) have been required to file those returns by electronic means, rather than paper filing. Effective as of ...
Beginning in 2023, Canadians aged 18 and over can save for the purchase of a first home on a tax-assisted basis, through the First Home Savings Account (FHSA) program. Contributions (to a maximum of $...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall inflation rate increased by .5% for the month of July. That rate reached 3.3%, as compared to the 2.8% infl...
The federal government provides a refundable tax credit to lower and middle-income Canadians, to help offset the impact of the goods and services tax/harmonized sales tax (GST/HST). That credit is p...
The most recent release of Statistics Canada’s Labour Force Survey shows little change in overall unemployment rate for the month of July 2023. That rate increased by 0.1% to 5.5%. Across demographi...
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...
The Bank of Canada issues interest rate announcements on eight scheduled dates throughout the year, and the Bank recently released its schedule for such announcements during 2024. Interest rate announ...
Through its Canada Child Benefit program, the federal government provides a non-taxable monthly benefit to parents of children under the age of 18. Benefit amounts are adjusted at the start of each be...
During the pandemic, relieving changes were made to the policies and practices of the Canada Revenue Agency (CRA) with respect to the collection of tax amounts owed by Canadians. In the past several m...
The Canada Revenue Agency has issued a reminder to Canadian taxpayers that applications for the second benefit period for the Canada Dental Benefit can be made as of July 1, 2023. Eligible families ca...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of June 2023 (as measured on a year-over-year basis) stood at 2.8%. The com...
The federal government has announced that maximum payments under the Old Age Security program will increase for the July to September 2023 benefit period. Effective with the July 2023 payment, the max...
In its regularly scheduled interest rate announcement made on July 10, the Bank of Canada indicated that, in its view, another increase to interest was warranted. Consequently, the Bank Rate now stand...
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...
The Canada Workers’ Benefit (CWB) is a refundable tax credit provided to lower-income individuals and families which have working income from employment or self-employment. In previous years, the CW...
The Canada Revenue Agency has issued a reminder to Canadians of the availability of administrative relief from tax interest and penalty charges for taxpayers who have been affected by this spring’s ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for May 2023 stood at 3.4%, as measured on a year-over-year basis. The comparable rate fo...
Qualifying Canadians are entitled to claim a disability tax credit which reduces both federal and provincial tax payable. In order to claim that credit an individual must complete and submit an applic...
The federal government has released additional details of the “grocery rebate” which was announced in the 2023 federal Budget. That rebate is scheduled to be paid to eligible Canadians on July 5, ...
The most recent release of Statistics Canada’s Labour Force Survey shows that unemployment rose slightly during May 2023, the first such increase since August of 2022. During May, the unemployment r...
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 2023, as well as the rates that will apply for th...
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 regularly scheduled interest rate announcement made on June 7, the Bank of Canada indicated that interest rates would be increased by one-quarter percentage point, bringing the Bank Rate to 5%....
Canadians who pay income tax by instalment make those instalment payments of tax four times each year, by specified deadlines. The second income tax instalment deadline for the 2023 tax year falls on ...
While most Canadian taxpayers were required to file their income tax returns for the 2022 tax year on or before May 1, 2023, self-employed taxpayers (and their spouses) have until Thursday June 15, 20...
The federal (and provincial) governments provide taxpayers with a number of tax credits and benefits which are delivered through monthly or quarterly direct payments. In many cases, eligibility for su...
In its 2023-24 budget, the federal government announced that, to assist Canadians coping with recent inflationary increases in the cost of food, it would be providing a one-time “grocery rebate”. ...
All Canadian individual taxpayers were required to pay any tax balance owed for the 2022 tax year on or before May 1, 2023. As of May 2, 2023, interest at a rate of 9% is levied on all such outstandin...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation increased slightly during the month of April, to 4.4%. The comparable rate for March 2023...
Most Canadians were required to file an income tax return for the 2022 tax year by the end of April 2023. For each such filing, a Notice of Assessment is issued by the Canada Revenue Agency (CRA), out...
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...
Canadians who receive Old Age Security (OAS) benefits and whose net income is above a specified threshold (currently $86,912) must repay a portion of those benefits, through the OAS recovery tax (or c...
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...
Most individual Canadian taxpayers must file their income tax returns for the 2022 tax year on or before Monday, May 1, 2023. Self-employed individuals and their spouses, however, have until June 15, ...
Monday May 1, 2023 is the deadline by which all individual income taxes owed for the 2022 tax year must be paid. The May 1 payment deadline applies regardless of the date by which an individual must f...
In the 2023-24 budget, the federal government announced that a one-time payment would be made to Canadians to help them meet inflationary increases in the cost of living. That payment – the “groce...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall inflation rate for the month of March 2023 stood at 4.3%, as compared to the 5.2% rate recorded for Februar...
In its scheduled interest rate announcement made on April 12, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate remains at 4.75...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of March 2023 stood at 5.0%, the same rate recorded for the previous month. ...
Old Age Security (OAS) benefits paid monthly to eligible Canadians are indexed to inflation on a quarterly basis, meaning that such benefit amounts increase to reflect that indexing at the beginning o...
The federal government imposes a 1% annual Underused Housing Tax (UHT) on the ownership of vacant or underused housing in Canada. While the tax usually applies to non-resident, non-Canadian owners it ...
Where the Canada Revenue Agency (CRA) owes an amount to the taxpayer (such as a tax refund), the Agency has the right to deduct from that amount any debts owed by the taxpayer to the federal governmen...
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 2023, as well as the rates that will apply for the purpose of cal...
Budget 2023 proposes to temporarily cap the inflation adjustment for excise duties on beer, spirits, and wine at two per cent, for one year only, as of April 1, 2023. The excise duty rates on all alco...
Budget 2023 proposes to amend the GAAR by: introducing a preamble; changing the avoidance transaction standard; introducing an economic substance rule; introducing a penalty; and extending the reasse...
Budget 2023 proposes to amend the rules introduced by Bill C-208 to ensure that they apply only where a genuine intergenerational business transfer takes place. To provide flexibility, it is proposed ...
Budget 2023 proposes to extend the qualifying family member measure (which allows a family member to open an RDSP for an adult relative) by three years, to December 31, 2026. Siblings will also be qua...
Budget 2023 proposes to increase limits on certain RESP withdrawals from $5,000 to $8,000 for full-time students, and from $2,500 to $4,000 for part-time students. Budget 2023 also proposes to allow d...
Budget 2023 proposes to double the maximum employment deduction for tradespeople’s and apprentice mechanics’ tools from $500 to $1,000, effective for 2023 and subsequent taxation years....
The CRA’s automatic tax filing service called “File My Return”, which reached some 53,000 Canadians in 2022, will be expanded to reach more than 2 million Canadians by 2025. The government will ...
Budget 2023 proposes to introduce an increase to the maximum GST/HST tax credit (“GSTC”) amount for January 2023 that would be known as the Grocery Rebate. Eligible individuals would receive an ad...
The federal government proposes to: Increase the Alternative Minimum Tax (“AMT”) capital gains inclusion rate from 80% to 100%. Capital loss carry forwards and allowable business investment losse...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
The most recent release of Statistics Canada’s Consumer Price Index puts the overall rate of inflation for the month of February 2023 at 5.2%, as compared to the 5.9% rate recorded for January. Both...
As part of the 2022 Federal Budget, the federal government introduced the Tax-Free First Home Savings Account (FHSA). The FHSA allows eligible taxpayers to contribute $8,000 per year (to a lifetime ma...
The Minister of Finance has announced that the 2023-24 Federal Budget will be brought down on Tuesday March 28, 2023, at around 4 p.m. EST. The media release providing the budget date can be found on ...
The Canada Revenue Agency (CRA) provides taxpayers with several telephone help lines, through which taxpayers can obtain both general tax information and information specific to their tax situation. T...
For the first time since January of 2022, the Bank of Canada has determined that no increase to current interest rates is needed. Consequently, the Bank Rate remains at 4.75%. In the press release ann...
Taxpayers are entitled to make a claim on their annual return for costs incurred in certain circumstances for meal costs and vehicle expenses. Such costs may, for instance, be claimable by individuals...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation continues to moderate. The inflation rate for the month of January 2023 stood at 5.9%, as...
In 2022, the federal government announced the creation of a top-up to the existing Canada Housing Benefit, which would provide a one-time payment of $500 to lower income individuals who pay a dispropo...
Millions of Canadians received federal government benefits during the pandemic, and those benefits represented income which must be reported on the annual tax return. The CRA will, by the end of Febru...
The most recent release of Statistics Canada’s Labour Force Survey shows that, while there was an increase in employment during January 2023, the unemployment rate was unchanged at 5.0%. Employment ...
The Canada Revenue Agency has announced that the tax payment deadline for individual income taxes owed for the 2022 tax year will be Monday May 1, 2023. While the payment deadline is usually April 30,...
The Canada Revenue Agency has announced that the filing deadline for individual income tax returns for the 2022 tax year will be Monday May 1, 2023. While the filing deadline is usually April 30, an e...
The Canada Revenue Agency has announced that the deadline for making registered retirement savings plan (RRSP) contributions which can be deducted on the return for the 2022 tax year will be Wednesday...
The Canada Revenue Agency (CRA) has issued the tax package to be used for the filing of individual income tax returns for the 2022 tax year. That package, which includes both the income tax return and...
The Canada Revenue Agency (CRA) has announced that its NETFILE service for filing of federal individual income tax returns for the 2022 tax year will be available on Monday February 20, 2023. Informat...
While the majority of Canadian taxpayers file their individual income tax returns electronically, a significant number of taxpayers file a paper return. The Canada Revenue Agency has issued a Tax Tip ...
In its regularly scheduled interest rate announcement made on January 25, the Bank of Canada announced that interest rates would be increased by one-quarter percentage point. That change marks the eig...
The Canada Revenue Agency has announced that its NETFILE service for the filing of prior year returns will be available until January 27, 2023. Specifically, NETFILE and ReFILE services for tax years ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation declined slightly during the month of December 2022. For that month, inflation stood at 6...
Finance Canada is currently conducting the consultation process leading to the release of the 2023-24 federal Budget this spring. There are two parts to the budget consultation process – an online s...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of December 2022 stood at 5.0%. During the month of December, the country ad...
The federal government has announced the amounts which may be paid as benefits under the Canada Pension Plan (CPP) during 2023. The amount of retirement benefit receivable by an individual is based on...
The federal government has announced the amounts which will be paid to recipients of Old Age Security benefits for the first quarter of 2023. Such benefit amounts are indexed quarterly, based on the c...
The Bank of Canada announces its decision with respect to interest rates on eight scheduled dates each year, and the Bank has provided the dates on which such interest rate announcements will be made ...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2023, as well as the rates that will apply for the purpose of ...
The federal government is providing a one-time non-taxable $500 payment to assist eligible Canadians who pay more than 30% of their income for rental housing, and the application process for that bene...
Individual taxpayers who pay income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment for the 2022 tax year must be mad...
In its regularly scheduled interest rate announcement made on December 7, the Bank of Canada announced that interest rates would be increased by one-half percentage point. That change marks the sevent...
Most Canadians are eligible to receive Old Age Security (OAS) benefits after they turn 65 (although receipt of such benefits can be deferred to as late as age 70). Regardless of the age at which recei...
The Canada Revenue Agency (CRA) has updated and re-issued its publication T4130 Employers’ Guide – Taxable Benefits and Allowances. The Guide, which can be found on the CRA website at T4130 Employ...
Canadians over the age of 17 can make annual contributions (up to a specified maximum) to a tax-free savings account (TFSA). While contributions made are not deductible from income, all investment inc...
Each year, personal income tax brackets and tax credit amounts are increased to reflect year-over-year changes in the Consumer Price Index. The Canada Revenue Agency has announced that the indexing fa...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of October 2022 stood at 5.2%.During that month, employment increased among ...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of October stood at 6.9%, the same rate recorded for the month of September...
The federal government has announced the amount of Employment Insurance (EI) premiums which will be payable by employees and employers during the 2023 calendar year. The 2023 EI premium rate is $1.63 ...
The Canada Workers Benefit is a refundable tax credit provided by the federal government to lower income Canadians who have “earned working income” during the year. The credit of up to $1,428 for ...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
The Canada Revenue Agency (CRA) has announced that the maximum pensionable earnings under the Canada Pension Plan (CPP) for 2023 will be $66,600. The basic exemption amount for 2023 remains $3,500. Th...
In its regularly scheduled interest rate announcement made on October 26, the Bank of Canada once again announced an increase in interest rates, bringing the Bank Rate to 4.00%. The most recent change...
The characterization of an individual as an employee or as a self-employed taxpayer affects both the tax treatment of that individual’s income and the remittance and filing obligations which are imp...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
The most recent release of Statistics Canada’s Consumer Price Index shows that inflationary increases in the price of food continue to outpace the overall inflation rate.During September, that overa...
The Canada Revenue Agency has announced that administrative tax relief will be provided to taxpayers living in Atlantic Canada who were affected by Hurricane Fiona. Specifically, the CRA has announced...
The most recent release of Statistics Canada’s Labour Force Survey shows that there was little change in the overall employment picture for the month of September. The unemployment rate for that mon...
The federal government has announced that maximum payments under the Old Age Security (OAS) program will increase for the October to December 2022 benefit period. For that period, and owing to changes...
While the last of the pandemic benefit programs for Canadian businesses ended as of May 7, 2022, eligible businesses have up to 180 days after the end of a benefit claim period to apply for such benef...
Finance Canada has announced that it plans to provide a one-time payment of $500 under the Canada Housing Benefit program, to assist individuals and families who must allocate a significant portion of...
The federal government has announced that, for a period of 30 days (until October 24, with the possibility of extension), it will match donations made to the Canadian Red Cross for storm relief effort...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of August was down slightly. That rate stood at 7.0% (as measured on a year...
The federal government provides eligible Canadians with a GST/HST tax credit, with the amount of credit receivable based on family composition, size, and income. For the July 2022 through June 2023 b...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of August rose slightly, to 5.4%. Among demographic groups, employment fell among yo...
The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for 2022, as well as the rates that will apply for the purpose of calculating employee ...
In its regularly scheduled interest rate announcement made on September 7, the Bank of Canada once again announced an increase in interest rates, bringing the Bank Rate to 3.50%. The most recent chang...
Canadian employees have tax deducted from their income at source – that is, the employer deducts income tax from the employee’s wages and then remits such tax to the federal government on the empl...
Individual taxpayers who pay income tax by instalment are required to make such payments quarterly. The third instalment payment deadline for the 2022 tax year falls on Thursday September 15, 2022. Mo...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
All Canadian resident corporations, regardless of size, are required to file a T2 corporation income tax return annually. The Canada Revenue Agency (CRA) has issued a Tax Tip for such corporate filers...
In this year’s budget, the federal government announced that, beginning in 2023, first-time home buyers would be able to save for a home purchase on a tax-free basis, through the new Tax-Free First ...
The most 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 7.6%. The comparable rate for Jun...
The benefit year for most individual tax credit and benefit programs administered by the Canada Revenue Agency runs from July 1 to the following June 30, and benefit amounts change with each year. The...
The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment for the month of July was unchanged, at 4.9%. Employment was down in Ontario and Prince Edward ...
Since 2009 Canadians have been able to save on a tax-sheltered basis through Tax Free Savings Accounts, or TFSAs. While TFSA contributions made are not tax-deductible, investment income earned by cont...
The Bank of Canada has released the schedule on which it will make interest rate announcements during the 2023 calendar year. Those announcements will be made on the following dates: January 25, Mar...
The prescribed leasing interest rate mandated by the Canada Revenue Agency must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescrib...
Canadian individual taxpayers who pay income tax by instalments make such payments four times a year, on prescribed dates. The third such instalment payment for 2022 is due and payable on or before Th...
The Canada Child Benefit is a non-taxable payment made monthly by the federal government to eligible families having children under the age of 18. There are two benefit levels – one for children und...
The July release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation reached 8.1% for the month of June, as measured on a year-over-year basis. That 8.1% figure was ...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of June fell by 0.2%, to a new record low of 4.9%. Statistics Canada, howeve...
In its regularly scheduled interest rate announcement made on July 13, the Bank of Canada increased interest rates by a full percentage point. Consequently, the Bank Rate now stands at 2.75%, the high...
While the remaining pandemic benefit relief programs for businesses ended on May 7, 2022, the application process for such benefits for 2022 is still open. Applications are made and benefits paid sepa...
The federal government has announced that maximum payments under the Old Age Security (OAS) program will increase for the July to September 2022 benefit period. Two changes will take effect as of July...
The Office the Superintendent of Financial Institutions (OSFI) has announced that changes will be made with respect to maximum borrowings permitted under some “combined loan plans”. Those products...
For many federal tax benefits, including the GST/HST credit, the Canada Child Benefit, the Canada Workers Benefit, and the Climate Action Incentive Payment, the new benefit payment year starts on July...
The federal government provides residents of Ontario, Alberta, Manitoba, and Saskatchewan with a Climate Action Incentive (CAI) intended to help offset the cost of the federal carbon tax. In previous ...
The overall inflation rate for the month of May, as measured on a year-over-year basis, stood at 7.7% – nearly a full percentage point higher than the 6.8% increase recorded for the month of April 2...
Effective as of July 1, 2022, the monthly Old Age Security benefit will be increased by 10% for recipients aged 75 and older. Recipients who turn 75 after July 1, 2022 will see the increase in their b...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall rate of unemployment for the month of May stood at 5.1% – marking a new record low for the third consecuti...
The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first three quarters of 2022, as well as the rates that will apply for the purp...
Individual taxpayers who pay income tax by instalment are required to make such payments quarterly. The second instalment payment deadline for the 2022 tax year falls on Wednesday June 15, 2022. Most ...
While all individual taxpayers were required to pay any balance of taxes owed for the 2021 tax year on or before April 30, 2022, self-employed taxpayers (and their spouses) benefit from a later tax re...
As anticipated, in its scheduled interest rate announcement made on June 1, the Bank of Canada raised interest rates by another one-half percentage point. This latest change brings the Bank Rate to 1....
The Canada Revenue Agency recently updated and re-issued its Guide RC4466 to the Tax-Free Savings Account (TFSA). The updated Guide includes information on determining TFSA contribution room, permitte...
The CRA has issued a new Tax Tip for tax filers who become aware, after the return has been filed, that their income tax return for 2021 contains an error. In all cases taxpayers should wait until the...
At the beginning of the pandemic in 2020, more than 8 million Canadians applied for and received the Canada Emergency Response Benefit (CERB). In applying for the CERB, recipients self-assessed their ...
The most recent release of Statistics Canada’s Consumer Price Survey shows that the overall rate of inflation reached 6.8% for the month of April 2022, as measured on a year-over-year basis. The lar...
Most of the pandemic benefit programs which the federal government has provided over the past two years came to an end on May 7, 2022. Notwithstanding the ending of the programs, applications for bene...
The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of April stood at 5.2%, down 0.1% from the rate recorded for March 2022. Among demog...
The federal government provides a non-refundable tax credit to first time home buyers (defined as individuals who have not owned and lived in a home in the current year or any of the previous four yea...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of March 2022 (as measured on a year-over-year basis) was the highest such rate sin...
Under current legislation, three major pandemic benefit programs for individuals are scheduled to expire on May 7, 2022. The Canada Recovery Sickness Benefit, the Canada Recovery Caregiving Benefit, a...
Since 2016, the federal government has provided a non-refundable tax credit for home renovation expenses undertaken to increase accessibility. Individuals eligible for this credit include those who ar...
In some instances, seniors who were eligible for the federal Guaranteed Income Supplement (GIS) and who received pandemic benefits during 2020 saw their GIS benefit amounts reduced or eliminated begin...
All Canadian individual taxpayers are required to pay income tax balances owed for 2021 on or before Monday May 2, 2022. Where payment is not made on or before that date, interest will be levied on al...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of March stood at 5.3%. That rate is the lowest rate on record since compara...
In its regularly scheduled interest rate announcement made on April 13, the Bank of Canada determined that an increase in interest rates was warranted. Following that increase, the Bank Rate stands at...
The proposed federal excise duty framework for vaping products would come into force on October 1, 2022. Retailers may continue to sell until January 1, 2023, unstamped products that are in inventory ...
Budget 2022 proposes to amend the Excise Tax Act to make all assignment sales in respect of newly constructed or substantially renovated residential housing taxable for GST/HST purposes....
Budget 2022 proposes targeted amendments to the Income Tax Act to align the taxation of investment income earned and distributed by “substantive CCPCs” with the rules that currently apply to CC...
Budget 2022 announces a consultation process for Canadians to share views as to how the existing rules could be modified to protect the integrity of the tax system while continuing to facilitate genu...
In order to facilitate small business growth, Budget 2022 proposes to extend the range over which the business limit is reduced based on the combined taxable capital employed in Canada of the Canadia...
Budget 2022 proposes to broaden the Medical Expense Tax Credit to recognize circumstances that involve medical expenses for individuals other than the intended parents....
Budget 2022 proposes to introduce a Labour Mobility Deduction for Tradespeople to recognize certain travel and relocation expenses of workers in the construction industry....
Profits arising from dispositions of residential property (including a rental property) that was owned for less than 12 months would be deemed to be business income....
Budget 2022 proposes to increase the annual expense limit of the Home Accessibility Tax Credit from $10,000 to $20,000....
This new refundable credit would provide recognition of eligible expenses for a qualifying renovation....
Budget 2022 proposes to double the Home Buyers’ Tax Credit amount from $5,000 to $10,000, which would provide up to $1,500 in tax relief to eligible home buyers....
Budget 2022 proposes to create the Tax-Free First Home Savings Account, a new registered account to help individuals save for their first home....
The Old Age Security (OAS) benefit payable to most Canadians over the age of 65 is indexed to inflation, with the benefit being adjusted at the beginning of each calendar quarter. For the second quart...
Many Canadian taxpayers work in the “gig” economy – holding down part-time, contract, or on-call positions or providing services to clients through online platforms, or some combination of those...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of February dropped by a full percentage point, from 6.5% to 5.5%. While emp...
The Minister of Finance has announced that the federal budget for the upcoming 2022-23 fiscal year will be brought down on Thursday April 7, 2022, at around 4 p.m. The announcement of the budget date ...
The Canada Revenue Agency provides an individual tax enquiries line where taxpayers can obtain general tax information, or information specific to their personal taxes. While the individual tax enquir...
Millions of Canadians earn money each year from online or digital sales transactions, often through platforms like Etsy or eBay. The Canada Revenue Agency recently issued a Tax Tip, reminding taxpayer...
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 2022, as well as the rates that will apply for the purpose of cal...
The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation during the month of February 2022 reached 5.7% (as measured on a year-over-year basis), t...
Canadian individual taxpayers can claim a deduction for a number of expenses which they incur in the course of their employment. For 2021, those deductible expenses can include a flat rate deduction f...
The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2017, 2018, 2019, 2020 and 2021 tax years is available 21 hours each day. The hours of servi...
Canadian individual taxpayers can now file their income tax returns for the 2021 tax year using the Canada Revenue Agency’s (CRA) NETFILE tax service. That service, which will be available until Fri...
In its regularly scheduled interest rate announcement made on March 2 the Bank of Canada, as expected, announced an increase to interest rates. Specifically, the Bank Rate has been increased from 0.50...
Dollar amounts on which individual non-refundable federal tax credits for 2022 are based, and the actual tax credit claimable, will be as follows: ...
The indexing factor for federal tax credits and brackets for 2022 is 2.4%. The following federal tax rates and brackets will be in effect for individuals for the 2022 tax year. Income level ...
During the 2021 tax year, many employees continued to work from home for pandemic-related reasons. Such employees may be eligible to claim a deduction for specified home office related expenses incurr...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of January 2022 stood at 5.1%, as measured on a year-over-year basis. The last prev...
Canadian individual taxpayers are entitled to claim a non-refundable tax credit for qualifying medical expenses incurred. Detailed information on the rules governing the types of expenses which qualif...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate rose slightly during the month of January, from 6% to 6.5%. The change marked the first su...
Post-secondary students filing a return for the 2021 tax year are entitled to claim a number of tax credits and deductions for education-related expenses which they incur, in addition to the credits a...
The Canada Revenue Agency (CRA) has announced that its NETFILE service for online filing of individual income tax returns for the 2021 tax year will be available on Monday February 21, 2022. In order ...
The January release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of December 2021 (as measured on a year-over-year basis) reached 4.8%. While pr...
In its regularly scheduled interest rate announcement made on January 26, the Bank of Canada indicated that, in its view, no change to current rates was needed. Consequently, the Bank Rate remains at ...
Taxpayers who filed their income tax return on paper last year will automatically receive the 2021 income tax package from the Canada Revenue Agency (CRA) by February 21, 2022. The package taxpayers w...
The Canada Revenue Agency (CRA) has announced the automobile expense deduction limits which will apply during the 2022 taxation year. Owing to increases in the Consumer Price Index, most such limits h...
The Canada Revenue Agency (CRA) has announced that individual (T1) income tax return forms for the 2021 tax year will be available on the Agency’s website on January 18, 2022. Such returns must be f...
In October 2021, the federal government announced the creation of a new pandemic benefit, the Canada Worker Lockdown Benefit (CWLB), which was intended to be provided to workers affected by regional p...
The amount of Old Age Security (OAS) benefit paid to eligible Canadians is adjusted each quarter to take account of increases in the Consumer Price Index. Based on recent increases to the Consumer Pri...
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 2022, as well as the rates that will apply for the purpose ...
The Canada Revenue Agency (CRA) has issued the TD1 form to be used by all Canadian resident employees for the 2022 tax year. On the TD1 form, the employee indicates the federal personal tax credit amo...
Canadian taxpayers who have a registered retirement savings plan (RRSP) must collapse that RRSP by the end of the year in which the taxpayer turns 71. Such taxpayers are entitled to make a final RRSP ...
As part of the Economic and Fiscal Update, the federal government announced that small businesses would be provided with a refundable Small Businesses Air Quality Improvement Tax Credit. That credit, ...
As part of pandemic relief measures, changes were made to the existing home office expense deduction for employees. Those changes, which were for the 2020 tax year only, allowed employees to use a fla...
Individual taxpayers who pay income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment for the 2021 tax year must be mad...
The 2021 Economic and Fiscal Update will be delivered by the Minister of Finance on Tuesday, December 14 at around 4 p.m. The update is expected to include information on the current state of the Cana...
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...
The Canada Revenue Agency (CRA) has posted a Tax Tip on its website reminding individuals who have been affected by the recent extreme weather events of the availability of the Taxpayer Relief Program...
The fourth and final income tax instalment payment deadline for individuals for 2021 falls on Wednesday December 15. Taxpayers who pay income tax by instalment will have received an Instalment Reminde...
The Canada Revenue Agency (CRA) publishes a guide for post-secondary students which outlines the tax treatment of the types of income and expenses (like scholarship income and tuition expenses) which ...
The Canada Revenue Agency (CRA) has released the indexing factor which will apply for purposes of determining individual income tax brackets and non-refundable tax credits for 2022. That indexing fact...
The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows that during the month of October inflation rose by 4.7%, as measured on a year-over-year basis. That increase marked t...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate declined slightly during the month of October, from 6.9% to 6.7%. Employment held steady f...
The federal government has announced the premium rates and amounts which will apply for purposes of the Employment Insurance program during the 2022 calendar year. For 2022, maximum insurable earnings...
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...
The Canada Revenue Agency (CRA) has released the contribution rates and amounts which will apply with respect to the Canada Pension Plan (CPP) during the 2022 calendar year. For 2022, the employer and...
In its regularly scheduled interest rate announcement made on October 27, the Bank of Canada indicated that, in its view, no change was required to current interest rates. Accordingly, the Bank Rate r...
The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation, as measured on a year-over-year basis, rose by 4.4% during the month of September. The compa...
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...
The Canada Revenue Agency (CRA) has announced that new security measures have been made available with respect to the authorization of online representatives by taxpayers. Generally, representatives a...
The federal government currently provides a range of pandemic benefit programs, for both individuals and businesses, and a number of those programs are scheduled to end on Saturday October 23, 2021. H...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate declined during the month of September, by 0.2 percentage points. The September unemployme...
The federal government has announced the premium rates and amounts which will apply for purposes of Employment Insurance during the 2022 calendar year. The contribution rates for both employers and em...
The amount of Old Age Security (OAS) benefit paid to eligible Canadians is adjusted each quarter to take account of increases in the Consumer Price Index. Based on recent increases to the CPI, the fed...
In the 2020 Fall Economic Statement, the federal government announced that, as part of its pandemic relief measures, an additional amount would be paid during 2021 to qualifying families who were elig...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for 2021, as well as the rates that will apply for the purpose of calculating employ...
A number of pandemic relief benefit programs provided to individual Canadians are currently scheduled to end as of October 23, 2021. Those programs are as follows: Canada Recovery Benefit Canada Reco...
The latest release of Statistics Canada’s Consumer Price Index shows that the rate of inflation, as measured on a year-over-year basis, rose by 4.1% during the month of August, as compared to the 3....
The most recent release of Statistics Canada’s Labour Force Survey shows a decline in the overall unemployment rate during the month of August. During that month, the rate declined by 0.4%, to 7.1%....
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...
Individual taxpayers who pay income tax for the year through instalment payments do so by four prescribed deadlines each year. The third of those deadlines falls on Wednesday September 15, 2021. Taxpa...
In its regularly scheduled interest rate announcement made on September 8, the Bank of Canada (the “Bank”) indicated that, in its view, no change to current rates was needed. Accordingly, the Bank...
Each year, on pre-announced dates, the Bank of Canada releases its decision on any changes to current interest rates. The Bank recently issued a listing of the dates on which such interest rate announ...
The benefit year for many federal tax credits, including the GST/HST tax credit, runs from July 1 to June 30 of the following year. Each year, credit amounts change, as do the income thresholds which ...
In July of this year, the federal government announced that the Canada Emergency Wage Subsidy (CEWS) program would be extended to be available to employers until October 2021. The Canada Revenue Agenc...
This year’s federal Budget included a proposal for a “luxury tax” which would apply, at varying rates, to sales of specified goods over a prescribed price threshold. The proposal indicated that ...
The Canadian tax system provides credits and incentives for taxpayers who carry out qualifying scientific research and experimental development (SR&ED) work. When claims are made for such credit a...
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 3.7%. The comparable rate ...
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...
Individual taxpayers who pay income tax by instalments must make the third instalment payment of the year on or before Wednesday September 15, 2021. Such taxpayers should receive an Instalment Reminde...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of June, as measured on a year-over-year basis, reached 3.1%. That rate was slightl...
The federal government has announced that a number of pandemic relief benefit programs, for both businesses and individuals, have been extended. The changes announced are as follows. The eligibility p...
The federal government administers the Canada Workers Benefit (CWB), a refundable tax credit which supplements income amounts for lower-income working Canadians. The annual benefit amount is $1,400 fo...
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 announced in this year’s federal Budget, some recipients of Old Age Security will receive a one-time supplement, to be paid in August 2021. During that month, OAS recipients who were born on or b...
The current benefit year for the Canada Child Benefit runs from July 1, 2021 to June 30, 2022. The federal government recently announced that Child Tax Benefit amounts for this benefit year have been ...
The most recent release of Statistics Canada’s Labour Force Survey shows a rebound in employment, as pandemic-related public health restrictions were eased in several provinces. For the month of Jun...
In its regularly scheduled interest rate announcement made on July 14, the Bank of Canada indicated that, in its view, no change to current rates was required. Accordingly, the Bank Rate remains at 0....
The Old Age Security benefit administered by the federal government is adjusted quarterly to reflect the rate of inflation. The federal government has announced that the maximum basic OAS benefit paya...
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 2021, as well as the rates that will apply for the p...
In its regularly scheduled interest rate announcement made on June 9, 2021, the Bank of Canada determined that, in its view, no change to current rates was needed. Accordingly, the Bank rate remains a...
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 2021, as well as the rates that will apply for the p...
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...
Canadian companies are required to file their federal income tax returns within 6 months after their fiscal year end. Consequently, companies which had a calendar year end on December 31, 2020 must fi...
While there was little change in the overall unemployment rate for the month of May, employment did fall by 68,000 positions, most of those in part-time work. The overall unemployment rate for the mon...
The most recent release of Statistics Canada’s Consumer Price Index shows an increase of 3.6% increase in the rate of inflation for the month of May, as measured on a year-over-year basis. The comp...
For individuals who pay income tax through quarterly instalments, the second instalment payment deadline for the year is Tuesday June 15, 2021. Information on the instalment payment system, including ...
The filing deadline for income tax returns for the 2020 tax year for self-employed individuals and their spouses is Tuesday June 15, 2021. Information on that filing deadline and on available filing m...
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 2020, some self-employed Canadians received Canada Emergency Relief Benefits (CERB) to which they were not entitled, as the result of erroneous information provided by the federal government, and t...
The Canada Revenue Agency (CRA) has posted a Tax Tip on its website outlining the several methods taxpayers can use to make a change, or correct an error, on an already-filed return. Requests for chan...
Last year, the federal government announced that families who are eligible for the Canada Child Benefit in 2021 and have a child or children under the age of six could receive a supplement — the Can...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of April 2021 was up by 3.4%, as measured on a year-over-year basis. Statistics Can...
The Canada Revenue Agency (CRA) has issued a warning to taxpayers with respect to a tax scheme currently being promoted, typically to homeowners who have significant equity in their homes and substant...
Taxpayers who are unable to file their returns or make payment of taxes owed on a timely basis for reasons outside their control (including financial hardship) can apply, under the Taxpayer Relief Pro...
The most recent release of Statistics Canada’s Labour Force Survey shows an increase in the rate of unemployment during the month of April 2021. That rate, as measured on a year-over-year basis, ros...
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of March 2021 was 2.2%, as measured on a year-over-year basis. While the monthly in...
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 regularly scheduled interest rate announcement made on April 21, the Bank of Canada indicated that, in its view, no change to current rates was warranted. Accordingly, the Bank Rate remains at ...
The deadline for payment of all individual income tax amounts owed for the 2020 tax year is Friday, April 30, 2021. For most individuals (other than self-employed taxpayers and their spouses), April 3...
The Budget includes proposals to address perceived anti-avoidance activity and failures by taxpayers to comply with transaction reporting rules. To address the issue of failure to report, the governme...
The federal government provides two tax credit programs for the film and television industry. The Canadian Film or Video Production Tax Credit (CPTC) provides a 25% refundable tax credit on qualified ...
In the Budget, the federal government announced that the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy, and the Lockdown Support programs, which are currently scheduled to expire on...
Under Canada’s capital cost allowance (CCA) system, an asset is written off over a period of years, at a prescribed percentage rate per year, based on the useful life of that asset. Acquisitions of ...
The Budget includes a proposal for a temporary measure to reduce corporate income tax rates for qualifying zero-emission technology manufacturers. Specifically, taxpayers would be able to apply reduce...
Under Canadian tax rules, companies which acquire capital assets are required to deduct, or write off, the cost of those assets over a period of years, under the rules provided in the Capital Cost All...
The federal Budget includes a proposal for a Canada Recovery Hiring Program. That program will provide eligible employers with a subsidy of up to 50% on the incremental remuneration paid to eligible e...
The Budget papers provide that public corporations which received the Canada Emergency Wage Subsidy will, in some instances, be required to repay part or all of that subsidy. Specifically, where the t...
Current rules provide that tax preparers and filers of information returns who file more than a prescribed number of returns each year must file such returns electronically. Those rules will be amende...
Changes are proposed to the rules to increase the ability of the Canada Revenue Agency (CRA) to communicate with taxpayers electronically, without the taxpayer having to authorize the CRA to do so. Ge...
The Canada Revenue Agency has the authority to revoke the charitable registration status of an organization where that organization fails to fulfill its legal obligations. The rules governing such rev...
Millions of Canadian taxpayers received pandemic benefits during the 2020 taxation year. While most such recipients were entitled to those benefits, there were instances in which the benefits were pai...
Postdoctoral fellows are generally not, for purposes of the income tax system, considered to be students. Consequently, postdoctoral fellowship income does not qualify for the exemption generally prov...
Canadians who live in prescribed northern areas of Canada for at least six consecutive months in a year are eligible for the Northern residents deduction. That deduction has both a residency component...
The Canada Workers’ Benefit (CWB) is a non-taxable refundable tax credit that supplements the earnings of low-income and medium-income workers. The CWB, which is generally available to workers who e...
The federal government provides qualifying individuals with a disability tax credit (DTC) which reduces federal tax otherwise payable. For 2021, the value of the DTC is $1,299. To qualify for the DTC,...
The tax return completed by individual Canadians changes from one year to the next, as tax credits or deductions are introduced, eliminated, or changed, or reporting requirements are altered. The Cana...
The filing deadline for most individual income tax returns for the 2020 taxation year is Friday, April 30, 2021. Self-employed individuals and their spouses are not required to file their returns unti...
Last year, the federal government provided a deferral of the payment deadline for individual income taxes owed. No such deferral is allowed for this year, meaning that any balance of individual income...
The federal government, through the Canada Recovery Sickness Benefit, provides a weekly benefit of $500 to qualifying individual Canadians who are unable to work because they are sick or need to self-...
While gains made on a sale of a principal residence in Canada are generally tax exempt, there are reporting requirements imposed on such sales. In addition, certain tax credits may be claimed by home ...
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first half of 2021, as well as the rates that will apply for the purpose of ...
The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation for the month of February 2021. That rate stood at 1.1%, as compared to the rate ...
The Minister of Finance has announced that the federal Budget for the upcoming 2021-22 fiscal year will be delivered on Monday April 19, 2021. This year’s Budget will be the first one delivered sinc...
Over the past month, the Canada Revenue Agency (CRA) identified a large number of individual taxpayer online accounts for which user IDs and passwords had been obtained by unauthorized third parties. ...
The most recent release of Statistics Canada’s Labour Force Survey shows a significant increase in employment during the month of February. During that month, employment rose by 259,000 jobs, and th...
As expected, the Bank of Canada announced on March 10 that no changes would be made to current interest rates. Accordingly, the Bank Rate remains at 0.5%. In the press release announcing its decision,...
The Canada Revenue Agency (CRA) has announced that targeted interest relief will be provided to Canadians who received pandemic income support benefits during 2020. Specifically, qualifying individual...
The most recent release of Statistics Canada’s Consumer Price Survey shows a slight increase in the rate of inflation for January 2021. The inflation rate for that month, as measured on a year-over-...
The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2017, 2018, 2019, and 2020 tax years is now available 21 hours a day, 7 days a week. The ser...
The Canada Revenue Agency (CRA) has issued the guide to be used by taxpayers who are reporting business or professional income, commission income, and income from farming and fishing received during 2...
The Canada Revenue Agency (CRA) has announced that, beginning February 27, 2021, its Individual Tax Enquiries line will be available on Saturdays, from 9 a.m. to 5 p.m. That service is also available ...
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...
The Canada Revenue Agency (CRA) has announced that its individual income tax enquiries line will be open for extended hours during the upcoming tax filing season. That line — reachable at 1-800-959-...
The Canada Revenue Agency’s (CRA) NETFILE service for the online filing of individual income tax returns for the 2020 taxation year will be available starting Monday, February 22, 2021. In order to ...
The most recent release of Statistics Canada’s Labour Force Survey shows a significant decline in employment during the month of January, and a corresponding increase in the overall unemployment rat...
The Canada Revenue Agency (CRA) has issued the individual income tax forms and guides to be used by Canadian residents in filing an income tax return for the 2020 taxation year. The particular form to...
The federal government has launched the consultation process leading to the release of the 2021-22 federal Budget. This year, there are three components to the consultation process. The government wil...
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 regularly scheduled interest rate announcement made on January 20 the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 0....
The Canada Revenue Agency (CRA) has issued an updated version of Guide T4044, Employment Expenses 2020, which outlines the tax treatment of various employment expenses, and will be used by taxpayers i...
The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate inflation rose by 0.7% during the month of December 2020, as measured on a year-over-year basis. The rate for...
The Canada Revenue Agency (CRA) has released the automobile expense deduction limits and benefit rates which will apply during the 2021 taxation year. Most of the rates and limits which applied during...
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of December 2020 increased to 8.6%. The comparable rate for the month of Nov...
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 2021, as well as the rates that will apply for the purpose ...
The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2016, 2017, 2018, and 2019 taxation years will be available until Friday, January 22, 2021. ...
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 1...
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 Wedne...
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 red...
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 qualifyi...
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, 201...
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 recently posted information on its website on how tax returns can be filed and tax payments made during the current postal disruption, and on how cheques from the provincial government ...
Effective January 1, 2025, changes will be made to the calculation of provincial sales tax (“QST”) payable on purchases and sales of used vehicles. As of that date, when a motor vehicle which is l...
Quebec taxpayers are entitled to claim a credit on the provincial income tax return for eligible medical expenses incurred. Revenu Quebec recently updated and re-issued its publication summarizing eli...
Residents of Quebec who earn income from employment are allowed, for purposes of provincial income tax, to deduct employment expenses incurred. The kinds of expenses which can be deducted depend, in p...
Québec Finance recently issued its Report on Québec’s Financial Situation as of the end of the first quarter (April 1 to June 30) of the province’s 2024-25 fiscal year. The figures issued indica...
Québec provides a tax credit of up to $1,400 to first-time home buyers in the province who purchase a qualifying home. Generally, in order to qualify for the credit, the home to be purchased must be ...
Québec provides a Shelter Allowance Program for residents of the province who must spend a disproportionate share of their income on shelter. The current program year for the Shelter Allowance Progra...
Finance Québec has issued the Public Accounts for the province’s 2023-24 fiscal year, which ended on March 31, 2024. Those Public Accounts show that Québec recorded an operating deficit of $6.0 bi...
The province of Québec 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 p...
Québec residents who are disabled are entitled to claim a disabilty supports deduction for eligible costs incurred to enable them to work as an employee, carry on a business, or practice a profession...
To encourage older workers to remain in, or return to, the work force, the province provides a tax credit for career extension. That non-refundable tax credit reduces income tax payable on eligible an...
Québec residents who pay provincial income tax by instalments are required to make their third instalment payment for 2024 on or before September 15, 2024. As September 15 falls on a Sunday this year...
Québec residents who wish to make changes to a provincial income tax return which has been filed and for which an assessment has been issued by Revenu Québec can do so online, using Revenu Québec...
Revenu Québec’s online services are taken offline on scheduled dates throughout the year, in order to carry out system maintenance. There will be two such service outages during the month of Septem...
Residents of Quebec who pay provincial income tax by instalments must make the third such instalment payment for the 2024 tax year on or before September 15th, 2024. As of 2024, instalment payments of...
The province of Québec provides a Shelter Allowance of up to $170 per month for older and lower-income residents of the province who must spend a disproportionate percentage of their income on shelte...
Revenu Québec has posted information on its website on how it does and does not communicate with taxpayers and, specifically, how to avoid scams by being aware of whether such a communication is or i...
On regularly scheduled dates throughout the year, Revenu Quebec’s online services are taken offline while the Agency carries out necessary systems maintenance. The next such scheduled outage will ta...
Québec offers a GST/QST rebate to owners of residential rental property in the province. While the rebate can be claimed by taxpayers who purchase or build residential rental properties, it is also a...
The province of Québec administers a Shelter Allowance Program which provides up to $170 per month to lower-income residents of the province who must spend a disproportionate share of their budget on...
As part of its tax collection efforts, Revenu Québec is implementing mandatory billing practices for the restaurant sector. Those changes require operators of restaurants and other food establishment...
The province of Québec 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 p...
Revenu Québec will be holding two online seminars, on July 9 and 10, which will provide information on the tax and financial implications of a decision to retire, or to return to the work force follo...
Corporations which have an establishment in Québec are required to file a corporate income tax return (CO-17) within 6 months of the corporation’s year-end. Consequently, the filing deadline for 20...
Revenu Québec has posted a notice on its website indicating that the inclusion rate for capital gains will increase for gains received on or after June 25, 2024. Currently, when an individual realize...
All self-employed taxpayers, and their spouses, are required to file a provincial income tax return for the 2023 tax year on or before Monday June 17, 2024. All taxpayers (including those who are self...
Québec residents who pay provincial income tax by instalments are required to make their second instalment payment for 2024 on or before Monday June 17, 2024. Taxpayers who are subject to the instalm...
In the 2024-25 federal Budget, it was announced that changes would be made to the Home Buyers’ Plan, to increase the amount of an eligible withdrawal from such plans from $35,000 to $60,000 and to d...
Revenu Québec has issued a listing of the automobile expense and deduction limits which will apply for provincial tax purposes during 2024, and those figures are as follows: the deductibility ceilin...
On specified dates throughout the year, the online services provided by Revenu Québec are temporarily offline and unavailable while the Agency’s systems are updated. The next schedule outage of tho...
Revenu Québec has announced that, beginning June 25, 2024, the inclusion rate for capital gains will increase from 50% to 66.7%. For individuals, the change will apply to the portion of capital gain...
All Québec individual taxpayers who have a tax amount owing for the 2023 tax year must pay those amounts in full on or before Tuesday April 30, 2024. Where amounts owed are not paid in full by that d...
The province provides a refundable tax credit for Québec film and television productions, with the available credit based on the amount of labour expenditures incurred by a corporation for a qualifyi...
The province of Québec 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 p...
The general minimum wage payable in the province will increase, effective as of May 1, 2024. As of that date, the minimum wage will increase by .50 cents per hour, from $15.25 to $15.75 per hour. As o...
In 2019 the province introduced a refundable tax credit for qualifying employers who employed individuals aged 60 or over. The computation of that “tax credit for experienced workers” was based on...
Since 2008 Québec has provided information technology businesses in the province which carry out e-business activities (especially with respect to computer systems design and software publishing) wit...
In the recent 2024-25 Québec budget, two increases to the province’s tobacco tax rates were announced. The first such increase took effect on March 13, 2024, when the tax payable on a carton of cig...
Under provincial law, an investor who purchases qualifying shares in the Québec Workers' Solidarity Fund (“FTQ”) or Fondaction can claim a 15% non-refundable tax credit. The maximum share purchas...
The provincial budget for the upcoming 2024-25 fiscal year will be released by the province on Tuesday March 12, 2024. When the budget measures are announced, the full budget papers will be available ...
Revenu Quebec has announced that its NETFILE service for the online filing of individual provincial income tax returns for the current tax year is now available. Using that service, taxpayers can now ...
RL slips are information returns which must be issued by February 29, 2024 with respect to specified amounts paid or received by Québec residents during the 2023 tax year. Recipients of such slips us...
In November 2022, the provincial government announced the creation of a refundable cost of living tax credit, which would provide eligible individuals (those having net income of less than $104,000 in...
Revenu Québec has announced that its NETFILE service for the online filing of individual provincial income tax returns for the 2023 tax year will be available beginning Monday February 19, 2024. As o...
Individuals and organizations in Québec which provide childcare services that qualify for the provincial tax credit for childcare expenses (including an unsubsidized daycare, a summer camp, or a day ...
The province of Québec provides a non-refundable 15% tax credit for up to $5,000 in qualifying investments made in labour-sponsored funds in a tax year. Under rules in place prior to 2024, that tax c...
The province of Québec 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 p...
The province of Québec provides a refundable tax credit for caregivers in the province. That credit has two components: the first is for caregivers providing care to a person 18 or over who has a sev...
Revenu Québec has issued a reminder on its website of upcoming changes to requirements for electronic filing of RL slips. Such slips are issued where amounts (like salary and wages or investment inco...
Québec residents who pay provincial income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment for the 2023 tax year mus...
Under current rules, Québec taxpayers who remit more than $50,000 in consumption tax payments (goods and services/harmonized sales tax (GST/HST) and Québec sales tax (QST)) must make those remittanc...
Québec employers having employees who report for work at the employer’s establishment in the province are required to withhold amounts for provincial income tax, employment insurance, the Québec P...
Québec Finance has announced that the indexing factor for personal income tax brackets and credit amounts for 2024 will be 5.08%. That rate is based on changes to the province’s Consumer Price Inde...
The provincial government provides direct financial assistance through the Shelter Allowance Program for eligible Québec residents who are over the age of 50 or who have dependent children and who mu...
The 2023-24 Update on Québec’s Economic and Financial Situation recently released by the Québec Minister of Finance indicates that the province will run a deficit of $4.0 billion for the current (...
Under current rules, residents of Québec must begin receiving retirement benefits under the Québec Pension Plan no later than age 70. As announced in the 2023-24 Québec budget, and effective as of ...
Effective as of January 1, 2024, Québec workers who are aged 65 or older and who are currently receiving a Canada Pension Plan (CPP) or Québec Pension Plan (QPP) retirement benefit can elect to stop...
Québec provides a grant to qualifying seniors living in the province, to help offset the impact of increases in municipal taxes. The rebate, which is claimed on the annual tax return, can be claimed ...
Québec parents whose children are enrolled in unsubsidized daycare may be eligible for advance payment of the provincial tax credit for childcare expenses. To receive such advance payments, parents m...
The province of Québec 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 p...
Revenu Québec has updated and re-issued its guide on available sales tax rebates which can be claimed following the purchase, construction, or renovation of qualifying properties in the province. The...
The Québec government provides eligible residents of the province with a solidarity tax credit, which has two basic components – the housing component and the Québec Sales Tax (QST) component. Rev...
On scheduled dates throughout the year, Revenu Québec’s online services are unavailable for short periods while planned maintenance is carried out. The next such scheduled outage date is Sunday, Se...
Québec residents who pay provincial income tax by instalments make those instalment payments of tax four times each year, by specified deadlines. The third income tax instalment deadline for the 2023...
Revenu Québec has issued updated information on how it does and does not communicate with taxpayers, to help them avoid being tricked by individuals or entities who make fraudulent claims of being re...
As announced in the 2023-24 provincial budget, individual provincial income tax rates were reduced, effective as of January 1, 2023.Revenu Québec has issued new source deduction tables, to be used in...
Throughout the year, on previously announced dates and times, Revenu Québec’s online services are unavailable while regular scheduled maintenance is being carried out. There are two such scheduled ...
The Québec government provides a refundable solidarity tax credit to eligible low and middle-income residents of the province. That solidarity tax credit has two components – a housing component an...
The province provides a tax credit for small and medium sized Québec businesses which continue to employ workers aged 60 and older. The amount of the available tax credit depends, in part, on whether...
On several pre-announced dates throughout the year, Revenu Québec’s online services are temporarily unavailable while the Agency carries out scheduled maintenance on its systems. The next such date...
Québec taxpayers who are unable to pay provincial taxes owed on time or in full can enter into a payment arrangement with Revenu Québec, under which amounts owed are paid (together with interest) in...
The Québec government administers a shelter allowance program for residents of the province (including homeowners, tenants, or boarders) who spend a significant portion of their income on housing. Fo...
The province of Québec 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 p...
On March 21, as part of the 2023-24 Québec budget, the Minister of Finance announced that the provincial income tax rate applied to the first two income tax brackets would each be reduced. Following ...
The province of Québec provides a monthly shelter allowance for eligible individuals who pay more than 30% of their income for shelter. In order to receive the shelter allowance, such eligible indivi...
Québec workers who are aged 18 and older and earn more than $3,500 per year must contribute to the Québec Pension Plan (QPP) until they leave the work force, regardless of the age at which they reti...
Québec residents who pay provincial income tax by instalment make those instalment payments of tax four times each year, by specified deadlines.The second income tax instalment deadline for the 2023 ...
While most Québec residents were required to file their provincial income tax returns for the 2022 tax year on or before May 1, 2023, self-employed taxpayers (and their spouses) have until Thursday J...
Many individuals who are age 65 or older and are receiving a retirement benefit from the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) nonetheless continue to work and earn income from e...
In this year’s Québec budget, it was announced that provincial personal income tax rates would be reduced, effective from January 1, 2023. Specifically, the rates applicable to the first two taxabl...
In this year’s budget, the provincial government announced that provincial personal income tax rates would be reduced, effective from January 1, 2023. The decrease in personal tax rates will mean a ...
The general minimum wage payable in the province of Québec increased, effective as of May 1, 2023, from $14.25 to $15.25 per hour. The minimum wage for employees who receive tips is increased to $12....
All individual Québec taxpayers who owe a provincial income tax amount for the 2022 tax year must pay that amount to Revenu Québec on or before Monday May 1, 2023. In addition, most Québec taxpayer...
The province of Québec 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 p...
Revenu Québec has posted a reminder to taxpayers that scams and phishing attempts related to income tax increase during tax filing season, and that taxpayers should exercise caution when receiving a ...
In its budget for the 2023-24 fiscal year, the province announced that, beginning in 2024, older workers would be provided with the option of ceasing to make contributions to the Québec Pension Plan ...
Québec residents will benefit from a reduction in provincial personal income tax rates which was announced in the province’s budget for its 2023-24 fiscal year. Effective as of January 1, 2023, the...
Revenu Québec has announced the automobile use limits and rates which will apply during 2023. Such rates and limits are used in the determination of automobile expense deductions and in the calculati...
Québec residents who worked from home during 2022 may be able to claim home office expenses on their provincial income tax returns for the year. For 2022, eligible taxpayers can make such claims usin...
Earlier this year, the Québec government confirmed that the province’s minimum wage would be increased, effective as of May 1, 2023.As of that date, the general minimum wage will increase from $14....
The Québec government has announced that the province’s budget for the upcoming 2023-24 fiscal year will be released on Tuesday March 21, at 4 p.m. Once the budget measures are announced, the full ...
Revenu Quebec has posted information on its website with respect to filing and payment deadlines for provincial income tax returns and payments for the 2022 tax year. The provincial tax return filing ...
Revenu Québec has posted a notice on its website summarizing increases in the province’s tobacco tax which took effect as of February 9, 2023. The increase in tobacco tax applies to most tobacco pr...
Revenu Québec has announced its plans for the distribution of individual provincial income tax return forms for the 2022 tax year. The Agency will mail a paper version of the 2022 return package (whi...
Revenu Québec has announced that residents of the province will be able to NETFILE their provincial individual income tax returns for the 2022 tax year beginning Monday February 20, 2023. The Revenu ...
During the 2023 taxation year the province of Québec will levy individual income tax using the following income brackets and tax rates. Tax Rate Taxable Income...
The Québec government has released the premium amounts and maximum insurable earnings which will apply for purposes of the Québec Parental Insurance Plan (QPIP) for 2023. For 2023, the maximum emplo...
The province of Québec 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 p...
Since 2018, the government of Québec has provided eligible lower and middle-income seniors in the province with a Senior Assistance Tax Credit. In 2021, the government indicated that the amount of su...
The Québec Pension Plan contribution rate for 2023 has been set at 6.40% of pensionable earnings for the year. Maximum pensionable earnings for the year will be $66,600, and the basic exemption is un...
Landlords who lease rental accommodation in the province as of December 31, 2022 are required to complete an RL-31 slip in respect of that accommodation, and to provide that slip to their tenants on o...
Residents of Québec who pay their provincial income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment of provincial in...
Revenu Québec has issued a warning to residents of the province with respect to phishing attempts related to the new cost of living tax credit. The warning, which can be found on the Revenu Québec w...
Individuals who are carrying on a business or a profession (as a sole proprietor or as a partner) in the province must complete and file a TP-80-V form – Business or Professional Income and Expenses...
The Québec government has created a new Refundable Cost of Living Tax Credit intended to help eligible residents of the province cope with recent inflationary increases in the cost of living. That cr...
Québec provides first-time home buyers in the province with a Home Buyers’ Tax Credit of up to $1,500 for the purchase of a qualifying home. The credit is claimed on the annual provincial income ta...
Revenu Québec has updated and re-issued the form to be used with 2022 provincial tax returns by employees who worked from home during the year due to the pandemic and who are claiming employment expe...
Revenu Québec has issued a reminder to residents of the province aged 70 or older of the December 1, 2022 application deadline for advance payment of the tax credit for home-support services. That ta...
The province of Québec provides a shelter allowance to homeowners and renters whose housing costs (mortgage payments or rent) consume a disproportionate share of their overall budget. A recent announ...
The government of Québec provides eligible residents of the province with a refundable tax credit to help offset the cost of childcare. That tax credit can be claimed on the annual return and paid as...
The province of Québec 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 p...
On specified dates each year, Revenu Québec’s online services are temporarily unavailable to taxpayers while the Agency carries out scheduled maintenance of those online services. The next such pla...
The government of Québec provides a shelter allowance of between $100 and $170 per month to lower and middle-income individuals and families. That shelter allowance, which can be used toward either r...
Québec corporations can claim a refundable tax credit for certain expenditures incurred for eligible salary or wages of an apprentice enrolled in the Workplace Apprenticeship Program (WAP) or a stude...
The province of Québec provides maternity, paternity, parental, and adoption benefits to individuals in the province who become parents through birth or adoption. Such benefits are provided through t...
Individual taxpayers who pay provincial income tax by instalment are required to make such payments quarterly. The third instalment payment deadline for the 2022 tax year falls on Thursday September 1...
On specified dates each year, Revenu Québec’s online services are temporarily unavailable to taxpayers while the Agency carries out scheduled maintenance of those online services. There are two upc...
Revenu Québec has issued a guide for taxi operators and taxpayers who provide transportation for others which is organized through a digital platform or electronic system – that is, ride-sharing se...
Québec taxpayers who are unable to pay their taxes in full by the required deadline can make a proposal to Revenu Québec to pay those taxes on an instalment basis. Revenu Québec recently updated an...
Since 1997, Québec has maintained a tourism partnership fund which is financed in part by a tax on lodging in the province. Significant changes to that lodging tax regime will take effect on Septembe...
Québec residents who pay provincial income tax by instalments must make such payments to Revenu Québec four times a year, on prescribed dates. The third such instalment payment for 2022 is due and p...
Québec currently provides an investment and innovation tax credit for qualifying companies which make expenditures for manufacturing or processing equipment, general-purpose electronic data processin...
The solidarity tax credit is a refundable tax credit paid to lower and middle-income households in the province, usually on a quarterly or monthly basis. Unlike some other provincial tax credits, the ...
The province of Québec 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 p...
Revenu Québec has announced that, effective as of June 20, 2022, it is accepting electronic signatures on certain provincial tax forms, and that the list of forms for which such electronic signatures...
Individuals and businesses in Québec can manage their provincial tax obligations through My Account, Revenu Québec’s online service for taxpayers, and a new optional service for businesses using M...
Once Québec residents file a provincial tax return and Revenu Québec issues its assessment of that return, the taxpayer has the right to dispute that assessment by filing a Notice of Objection. Reve...
Individual taxpayers who pay provincial income tax by instalment are required to make such payments quarterly. The second instalment payment deadline for the 2022 tax year falls on Wednesday June 15, ...
While all residents of the province were required to pay any balance of provincial income taxes owed for the 2021 tax year on or before April 30, 2022, self-employed taxpayers (and their spouses) bene...
The province provides Québec corporations with a tax credit for the acquisition of manufacturing or processing equipment, general-purpose electronic data processing equipment, or certain management s...
For the 2022 calendar year, the percentage contribution rates for both employers and employees under the Québec Parental Insurance Plan (QPIP) are unchanged from 2021. However, maximum insurable earn...
Revenu Québec has announced that, as part of a scheduled service outage, its online services will be unavailable from May 13 to 15, 2022. The specific times for the service outage are from Friday May...
Individual residents of Québec (except self-employed individuals and their spouses) were required to file a provincial income tax return for the 2021 tax year on or before Monday May 2, 2022. In some...
Effective as of May 1, 2022, the general minimum wage payable in the province of Québec will increase by .75 cents per hour, from $13.50 to $14.25 per hour. At the same time, the minimum wage payable...
All Québec individual taxpayers are required to pay income tax balances owed for 2021 on or before Monday May 2, 2022. Where payment is not made on or before that date, interest will be levied on all...
In November 2021, the provincial government announced that it would be providing Québec residents with a one-time cost of living credit, intended to help offset recent inflationary increases in such ...
The province of Québec 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 p...
The regular deadline for the filing of provincial individual income tax returns and payment of provincial income taxes owed is April 30. However, this year, April 30 falls on a Saturday and Revenu Qu...
In its 2022–23 budget brought down on March 22, the provincial government announced that Québec residents having an income of $100,000 or less would be provided with a one-time refundable cost of l...
Québec residents who are aged 60 or older may be eligible for a wide range of provincial tax benefits and credits, many of which are claimed on the annual provincial income tax return. In some cases,...
The Québec budget for the upcoming (2022–23) fiscal year will be brought down on Tuesday March 22, 2022. Once the budget measures are announced, the 2022–23 budget papers will be available on the...
Residents of Quebec can now file their provincial income tax returns for the 2021 tax year using Revenu Québec’s NetFile Québec service. The service can also be used to file returns for the 2018, ...
For the 2022, the contribution rate for the Quebec Pension Plan is 6.15%. That rate is paid by both the employer and the employee on earnings between the $3,500 basic exemption and maximum pensionable...
Revenu Québec has posted a notice on its website indicating that its online services will be unavailable from 6:30 p.m on Friday February 18 to 11 p.m. on Sunday February 20.. When those services are...
Quebec Finance has announced that, for provincial tax purposes, the limits and rates governing the deductibility of automobile expenses and the calculation of taxable benefits relating to the use of a...
Revenu Québec has announced that its NetFile service for online filing of individual provincial income tax returns for the 2021 tax year will be available on Monday, February 21, 2022. In order to Ne...
Revenu Québec has posted a notice advising taxpayers that payments of the new one-time cost of living credit are being issued between January 24 and February 4, 2022. Eligible residents of the provin...
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 issued the provincial income tax return form to be used by residents of the province for filing returns for the 2021 tax year. Such returns must be filed on or before Monday May 2, ...
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 issued the TP-1015.3-V form to be used by residents of the province for the 2022 tax year. On that form, an employee indicates the provincial personal tax credit amounts for which h...
Revenu Québec has announced that it has, as a precautionary measure, temporarily suspended all of its online services. The decision to suspend such services was made as the result of a “security vu...
Residents of Quebec who pay their provincial income tax for the year through instalment payments do so by four prescribed deadlines each year. The fourth and final instalment payment of provincial inc...
The provincial government will be providing a one-time refundable tax credit to Quebec residents who are eligible for the solidarity tax credit. The credit is intended to help offset increases in the ...
Landlords of residential premises in the province must issue RL-31 slips to their tenants and file a copy of such slips with Revenu Québec. For premises which are rented at the end of 2021, such fili...
The province provides a refundable tax credit for qualifying expenses incurred by residents of the province for infertility treatment. That program provides for tax credit rates ranging from 20% to 80...
Québec provides a non-refundable career extension tax credit for residents of the province who are aged 60 or older and who continue to work, receiving income from employment or self employment. The ...
Individuals who have a trade (hairdresser, cook, plumber, apprentice mechanic, etc.) and who receive salary income during the year are entitled to claim a deduction for the cost of eligible tools acqu...
The province provides both a tax credit for child care expenses and a work premium tax credit for eligible residents of the province. While both such credits are claimed on the annual tax return for t...
Motor vehicle dealers which make a motor vehicle available to an employee for their own personal use during the year are considered to have granted the employee a taxable benefit which must be include...
Québec provides first-time home buyers in the province with a tax credit of up to $750. To qualify, home buyers must intend to use the property (which must be located in the province) as a principal ...
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...
September 30, 2021 is a federal statutory holiday — the first National Day for Truth and Reconciliation. Revenu Québec has issued a notice indicating that, even though the National Day for Truth an...
As of September 13, 2021, Revenu Québec is responsible for the oversight of money services businesses in the province. Money services businesses include businesses which exchange currency, cash chequ...
Québec provides eligible caregivers in the province with a basic caregiver tax credit of $1,266 per year, and those who are eligible can apply to receive advance payment of that basic credit. To rece...
Residents of Quebec who pay their provincial income tax for the year through instalment payments do so by four prescribed deadlines each year. The third of those deadlines falls on Wednesday September...
Since March 15, 2020, employers having an establishment in Quebec that were eligible for the federal Canada Employment Wage Subsidy during a particular period could claim a credit for contributions to...
Once a month throughout the year, the online services provided by Revenu Québec are temporarily taken offline for maintenance purposes. The next regularly scheduled service outage will take place on ...
As part of its pandemic relief measures, the provincial government extended a number of tax deadlines from March 13, 2020 to August 31, 2021. In addition, Revenu Québec reduced its audit and collecti...
Quebec residents who pay provincial income tax by instalments must make the third instalment payment of the year on or before Wednesday September 15, 2021. Information on the available options for suc...
Revenu Québec has announced that its online services will be unavailable on Sunday, August 8 from 6 a.m. to 1 p.m. Those services will be taken offline as part of Revenu Québec’s regular maintenan...
Effective as of July 1, 2021, the application of the provincial sales tax (QST) is expanded to apply to purchases of some goods from a foreign supplier (whether directly or through a platform) and to ...
The province of Quebec provides a refundable tax credit for eligible childcare costs incurred by residents. While that refundable credit can be claimed when filing the annual tax return, it is also po...
The province provides eligible seniors with a refundable tax credit to help offset the cost of purchasing services which allow such seniors to remain in their own homes. Beginning January 1, 2022, the...
The province of Québec 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 p...
Revenu Québec provides a program under which taxpayers who have not previously complied with their tax obligations (including a failure to file when required, claiming rebates or refunds to which the...
Revenu Québec has issued a reminder to taxpayers that, in order to avoid penalties or interest, consumption tax returns must be filed, and required payments made, on or before June 30, 2021. The remi...
Two new publications have been issued by Revenu Québec outlining the tax rules which apply to taxi businesses operating in the province. Those rules also apply to ride-sharing businesses, or “trans...
For residents of the province who pay provincial income tax through quarterly instalments, the second instalment payment deadline for the year is Tuesday June 15, 2021. Information on the instalment p...
In April 2020, the provincial government announced the introduction of a credit for employer contributions to the Health Services Fund (HSF) made in respect of employees who were on paid leave, during...
Earlier this year, Revenu Québec announced that individual taxpayers would be provided with an interest-free and penalty-free grace period with respect to the filing of provincial income tax returns ...
The province provides eligible employers with a refundable tax credit based on the wages or salary paid to an eligible trainee as part of a qualified training period, as well as wages or salary paid t...
Quebec provides qualifying small businesses in the province with a reduced corporate income tax rate. In order to qualify for that reduced rate, corporations must also satisfy criteria relating to the...
Last month, Revenu Québec announced that, although the filing deadline was April 30, 2021, no penalties or interest would be levied on individuals who filed their 2020 provincial income tax return an...
Effective May 1, 2021, the general minimum wage rate in Québec will increase to $13.50 per hour, an increase of 40 cents per hour from the current rate of $13.10 per hour. For employees who are ...
Revenu Québec has announced that individual tax filers in the province will be provided with an extension of time in which to file their 2020 provincial income tax returns and to pay any balance of t...
Since March 15, 2020, Québec employers that qualify for the Canada Emergency Wage Subsidy (CEWS) for a particular period are entitled to claim a credit for contributions to the health services fund (...
The province of Québec 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 p...
The 2021-22 Quebec Budget brought down on March 25 included a number of measures relating to the provincial seniors’ home support services tax credit. That credit provides financial assistance to in...
The province of Québec provides a refundable child care tax credit to qualifying parents resident in the province. One of the eligibility criteria for that tax credit is that child care expenses must...
Québec residents who worked from home during the 2020 taxation year may be able to claim teleworking expenses incurred on their 2020 provincial income tax return. In order to make such a claim, taxpa...
The province provides a refundable tax credit to Québec residents aged 70 or older for expenses paid for eligible home-support services, with the tax credit equal to 35% of such expenses paid by the ...
Effective as of May 1, 2021, the general minimum wage rate in Quebec will increase by 40 cents per hour, to $13.50 per hour. The minimum wage payable as of that date to employees who receive tips will...
Revenu Québec provides a help line through which taxpayers can obtain general tax information, or information about their specific tax situation. The help line is open Monday to Friday, from 8:30 a.m...
Revenu Québec has issued a reminder to tenants and sub-tenants in the province that, in order to claim the housing component of the solidarity tax credit, they must obtain an RL-31 slip from their la...
Revenu Québec’s NETFILE service for the online filing of provincial individual income tax returns for the 2020 taxation year will be available starting Monday February 22, 2021. To use NETFILE, ret...
Where qualifying criteria are met, employees who work from home are entitled, for tax purposes, to claim certain related expenses which they have incurred. For them to do so, their employer must compl...
Revenu Québec has issued an updated version of Guide IN-118-V, Employment Expenses 2020. That guide outlines the tax treatment of various employment expenses claimable by salaried employees, employee...
Revenu Québec has released the premium amounts and maximum insurable earnings which will apply for purposes of the Quebec Parental Insurance Plan (QPIP) for 2021. For 2021, the maximum employee premi...
Revenu Québec has released the automobile expense rates and limits which will apply for purposes of employee taxable benefits and deductions during 2021. Some of those rates and limits are as follows...
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 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 ca...
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 inco...
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 incre...
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 inc...
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 emplo...
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...
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It has been nearly five years since the start of the pandemic, and the work-from-home arrangements which became a necessity during that time have now become a choice for employers and employees.
It has been nearly five years since the start of the pandemic, and the work-from-home arrangements which became a necessity during that time have now become a choice for employers and employees.
Relatively few employees still work from home on a full-time basis – many have returned to the office full-time and many more likely now utilize some kind of hybrid arrangement, dividing their work week between their employer’s work site and a home office.
There are any number of benefits to working from home – avoiding a lengthy and often stressful commute, and the costs associated with such a commute, and being able to have a better work/life balance. There are other financial benefits as well, as employees who work from home can sometimes claim tax deductions for expenses incurred to create and maintain their home office.
As the necessity and availability of work-from-home arrangements changed (and changed again) over the past five years, the tax rules governing the deductions which could be claimed for home office expenses changed (and changed again) to meet those realities.
Employees who work from home have always been able to claim a tax deduction for costs related to a home office. Under the tax rules in place prior to 2020, a claim for a deduction for home office expenses was available only where employees met a number of criteria and could provide the tax authorities with an itemized accounting of eligible home office expenses incurred, as well as an attestation from their employer of the terms of the work-from-home arrangement – known as the “detailed” method. However, when work-from-home arrangements became effectively mandatory in 2020, for public health reasons, the federal government greatly simplified the rules governing those claims to provide a temporary flat-rate method which essentially eliminated the requirement for documentation. That flat-rate method, however, was available only during 2020, 2021, and 2022, and can no longer be utilized.
For 2024, the “detailed method” for claiming home office expenses will be the only method under which such costs may be deducted for tax purposes. What follows is a summary of the current rules outlined on the Canada Revenue Agency (“CRA”) website with respect to claims for home office expense deductions which will, absent an unlikely change in CRA policy, continue to apply to such claims during 2024.
In order to claim a deduction in 2024 for costs related to a work-at-home space, an employee must be required by their employer to work from home during the year. The requirement to work from home doesn’t have to be included in the employee’s employment contract, but can be simply a written or verbal agreement with the employer. Where an employee has entered into a formal telework arrangement with his or her employer, that arrangement will satisfy the “required work from home” criteria.
In addition, as outlined on the CRA website, at least one of the following criteria must also be satisfied in order for an employee to claim work-from-home costs for 2024.
- The work-at-home space is where the individual mainly (more than 50% of the time) did their work for a period of at least four consecutive weeks during the year; or
- The individual uses the workspace only to earn their employment income. They must also use it on a regular and continuous basis for in-person meetings with clients, customers, or other people in the course of their employment duties.
While the rules are (fairly) straightforward, it can be difficult to apply them in practice to the almost infinite variety of work-from-home arrangements which can be utilized by an employer and employee. Recognizing that reality, the CRA provides a number of examples on its website of how to analyze a particular work situation in order to determine whether it fits within the CRA’s criteria. Those examples can be found on the Agency’s 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/line-22900-other-employment-expenses/work-space-home-expenses/who-claim/detailed-method.html#h-2.
Once the CRA’s criteria are met, 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 their work-from-home space, such as rent; utilities costs like electricity, heating, and water (or the portion of a condo fee attributable to such utilities costs); home maintenance and minor repair costs; and internet access (but not internet connection) fees.
Once total expenses are tallied, the taxpayer must determine the percentage of those expenses which can be deducted as home office expenses, and the CRA provides detailed information on its website of how such determination is made. Generally, the employee determines that percentage based on the square footage of the workspace as a percentage of the overall square footage of the home. Where the work space is not a separate room but is a shared or multi-purpose space like a dining room, the employee must also calculate the number of hours for which that space is dedicated to work from home activities. Detailed information on how to make those calculations (including an online calculator) can be found on the CRA 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/line-22900-other-employment-expenses/work-space-home-expenses/work-space-use.html. In all cases, the Canada Revenue Agency can ask the taxpayer to provide documentation and support for claims made using the detailed method.
There is one further requirement for employees who seek to deduct costs incurred in relation to a home office. Each such employee must obtain from their employer a completed form T2200 Declaration of Conditions of Employment - Canada.ca. On that form, the employer must certify the work-from-home arrangement and confirm that the employee is required to pay their own home office expenses and is not being reimbursed for any such expenses incurred. Where there is any kind of reimbursement provided, the employer must specify the type of expense reimbursed, and the amount of reimbursement. And, of course, the employee cannot claim a deduction for any expenses for which reimbursement was received.
The ability to claim a deduction for home office expenses can mean that significant expenses (like the cost of rent and utilities) which would have to be incurred by the employee in any case can give rise to tax savings. There’s no denying, though, that the record keeping required to support such deduction claims can be onerous, and it’s likely that few taxpayers record and document such costs on a routine basis. However, given the potential tax benefits, it’s worth doing some upfront planning to determine whether a deduction claim for home office expenses can be made for 2024 and to ensure that any record keeping needed to support that deduction is done before tax filing season arrives a few months from now.
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 most Canadians, the subject of making RRSP or TFSA contributions, or making RRIF withdrawals, isn’t usually top of mind at year-end. Most Canadians know that the deadline for making contributions to one’s registered retirement savings plan (RRSP) comes 60 days after the end of the calendar year, around the end of February, but relatively few are aware that in some circumstances an RRSP contribution must be (or should be) made by December 31, in order to achieve the best tax result. As well, while a contribution or withdrawal from a TFSA can be done at any time, additional flexibility can be gained where withdrawals, in particular, are timed to take best advantage of the rules governing TFSAs. Finally, most Canadians who have opened a registered retirement fund (RRIF) are aware that they are required to make a withdrawal of a specified amount from that RRIF each year, with the percentage withdrawal amount based on the RRIF holder’s age – although few are aware of when and how that required withdrawal is calculated.
For most Canadians, the subject of making RRSP or TFSA contributions, or making RRIF withdrawals, isn’t usually top of mind at year-end. Most Canadians know that the deadline for making contributions to one’s registered retirement savings plan (RRSP) comes 60 days after the end of the calendar year, around the end of February, but relatively few are aware that in some circumstances an RRSP contribution must be (or should be) made by December 31, in order to achieve the best tax result. As well, while a contribution or withdrawal from a TFSA can be done at any time, additional flexibility can be gained where withdrawals, in particular, are timed to take best advantage of the rules governing TFSAs. Finally, most Canadians who have opened a registered retirement fund (RRIF) are aware that they are required to make a withdrawal of a specified amount from that RRIF each year, with the percentage withdrawal amount based on the RRIF holder’s age – although few are aware of when and how that required withdrawal is calculated.
There are, in sum, significant advantages which can be obtained (and significant disadvantages avoided) by taking some time to consider and plan for RRSP and TFSA contributions and withdrawals before the end of the calendar year. What follows is an outline of steps which should be considered, before the end of the 2024 calendar year, by Canadians who have an RRSP, an RRIF, or a TFSA – or maybe all three.
Timing of RRSP contributions
When you are making a spousal RRSP contribution
Under Canadian tax rules, a taxpayer can make a contribution to a registered retirement savings plan (RRSP) in their spouse’s name and claim the deduction for the contribution on their 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 2024, the contributor can claim a deduction for that contribution on their return for 2024. The spouse can then withdraw that amount as early as January 1, 2027 and have it taxed in their own hands. If the contribution isn’t made until January or February of 2025, the contributor can still claim a deduction for it on the 2024 tax return, but the amount won’t be eligible to be taxed in the spouse’s hands on withdrawal until January 1, 2028. It’s an especially important consideration for couples who are approaching retirement and may plan on withdrawing funds in the relatively near future. Even where that’s not the situation, making the contribution before the end of the calendar year will ensure maximum flexibility should an unforeseen need to withdraw funds arise.
When you are turning 71 during 2024
Every Canadian who has an RRSP must collapse that plan by the end of the year in which they turn 71 years of age – 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 they have sufficient contribution room. However, in such cases, the 60-day window for contributions after December 31 is not available. Any RRSP contribution to be made by a person who turns 71 during the year must be made by December 31 of that year. Once that deadline has passed, no further RRSP contributions are possible.
RRIF withdrawals for 2024
Under Canadian law, anyone who has an RRIF is required to make a minimum withdrawal from that RRIF each year. The amount of the withdrawal is calculated as a specified percentage of the balance in the RRIF at the beginning of the calendar year, with that percentage based on the age of the RRIF holder at that time.
Taxpayers who have no immediate need of funds held within an RRIF are often reluctant to make a withdrawal and pay the tax on those amounts, especially where the value of investments held in an RRIF has declined. While there is no way of avoiding the requirement to withdraw that minimum amount from one’s RRIF, and to pay tax on the amount withdrawn, such taxpayers can consider contributing those amounts to a tax-free savings account (TFSA). Where that is done, the funds can be invested and continue to grow. As well, neither the original contribution nor the investment gains will be taxable when the funds are withdrawn from the TFSA, and amounts withdrawn will not be included in income when determining the taxpayer’s eligibility for means-tested federal benefits and credits, like Old Age Security, the GST/HST credit, or the age credit.
Planning for TFSA withdrawals and contributions
Each Canadian aged 18 and over can make an annual contribution to a tax-free savings account (TFSA) – the current-year contribution limit for 2024 is $7,000. As well, where an amount previously contributed to a TFSA is withdrawn from the plan, that withdrawn amount is added to the taxpayer’s total TFSA contribution limit, but not until the year following the year of withdrawal.
Consequently, it makes sense, where a TFSA withdrawal is planned (or the need to make such a withdrawal might arise) within the next few months, to make that withdrawal before the end of the calendar year. A taxpayer who withdraws funds from their TFSA on or before December 31, 2024 will have the amount which is withdrawn added to their TFSA contribution limit for 2025, which means it can be re-contributed, where finances allow, as early as January 1, 2025. If the same taxpayer waits until January of 2025 to make the withdrawal, the amount withdrawn won’t be added to the taxpayer’s TFSA contribution room until 2026.
The approach of the calendar year end doesn’t usually prompt Canadians to consider the details of making contributions to an RRSP, or withdrawals from a TFSA or an RRIF. There is, however, no flexibility in the deadlines for taking such actions, and considering what steps may be needed or advisable now means one less thing to remember as the December 31 deadline nears.
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 most Canadians, tax planning for a year that hasn’t even started yet may seem premature or even unnecessary. However, most Canadians will start paying their taxes for 2025 in less than two months, starting with the first paycheque they receive in January.
For most Canadians, tax planning for a year that hasn’t even started yet may seem premature or even unnecessary. However, most Canadians will start paying their taxes for 2025 in less than two months, starting with the first paycheque they receive in January.
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 (CRA) on the taxpayer’s behalf by their 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 2025 (which have not yet been released by the CRA 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 their behalf to the federal government.
While the TD1 completed by the employee at the time their 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, a child starts post-secondary education, there is a separation or a divorce, a taxpayer turns 65 years of age, or an elderly parent comes to live with their children, the affected taxpayer(s) will often 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 them. 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 2025. The way to do so is to file Form T1213, Request to Reduce Tax Deductions at Source with the CRA. The most recent version of the T1213 was issued by the CRA in September 2024, and can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html.
Once the T1213 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 – and thereby increasing the employee’s take-home income.
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 2025 as soon as possible, along with filing the T1213 with the CRA where circumstances warrant, will ensure that source deductions made starting January 1, 2025 will accurately reflect all of the employee’s current circumstances, and consequently their actual tax liability for the year – and, potentially, provide the employee with a little more cash flow to meet day-to-day expenses.
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.
Canada’s income tax system is a self-assessing one, in which residents of Canada are expected (and in most cases, required) to file an annual tax return in which all sources of worldwide income are reported, and the amount of tax owed on that income calculated and paid.
Canada’s income tax system is a self-assessing one, in which residents of Canada are expected (and in most cases, required) to file an annual tax return in which all sources of worldwide income are reported, and the amount of tax owed on that income calculated and paid.
While the onus is on individual Canadians to determine the sources and amounts of income which have been received during the year, the process is not entirely an “honour” system in which amounts reported are not subject to cross-checks or verification. Rather, where income (whether salary, wages, investment income, or pension/retirement income) is paid to Canadians, the payor must prepare an information slip (a T4 or T5, or T4RRIF or T4RSP) setting out the amount and nature of the monies paid and the personal identification details (i.e., name, address, social insurance number) of the recipient. A copy of that information slip is provided to that recipient and another copy filed with the Canada Revenue Agency (CRA). The CRA is therefore able to cross-check income amounts reported by each Canadian taxpayer with the income payment information which has been filed with the Agency by the payor of that income.
There are very few types of income that escape the Canadian tax net, and in almost all cases the CRA is able to determine the amount and types of income received by each Canadian taxpayer through the system of information slips filed by payors. Where that system has not, to date, been as effective is in the tracking and reporting of income earned by Canadians through online or digital sales of goods or services.
Millions of Canadians earn income from online sales, through websites or apps. In some cases, such sales are infrequent, where an individual wants to earn a bit of additional income by selling possessions which are no longer needed or wanted, but are still saleable. In other cases, however, where such sales are done on a regular and frequent basis, the amount of income earned through online sales can be very substantial.
While it’s impossible to quantify or even know for certain, it’s likely the case that substantial amounts of income earned by Canadians from online sales are never reported to the tax authorities and are therefore never taxed. In some cases, that may be because recipients genuinely believe that such income does not need to be reported, while others who don’t report may simply be hoping that their omission never comes to the attention of the tax authorities.
Whatever the motivation or belief, the perception that online income doesn’t have to be reported is incorrect – as stated clearly on the CRA website, “income from platform economy activities is subject to taxation”. More generally, every resident of Canada is required to report all income received from all sources, both within Canada and worldwide. That includes income from what the CRA terms the “peer-to-peer” economy, in which goods are sold through online platforms including (but not limited to) Kijiji, Etsy, eBay, and Amazon.
To date, there has not been a practical mechanism by which the tax authorities can track amounts of income received by Canadians through online sales. That will change when, in January 2025, online platform operators will be required for the first time to report income amounts earned by individuals to the CRA. The actual reporting requirements came into force at the beginning of 2024, but the deadline for filing a report to the CRA with respect to online income earned by individual Canadians during 2024 is January 31, 2025. Information filed by online platform operators with the CRA with respect to any Canadian taxpayer will, of course, also be provided to that taxpayer, in the same way that taxpayers receive a copy of a T4 or T5 slip. The information filed with the CRA will include personal identifying information, including social insurance numbers, income figures, and bank account numbers, for any individual who meets the definition of a “reportable seller”.
The purpose of limiting such reporting to sales carried out by “reportable sellers” is to create a minimum activity/income threshold. The general definition of a “reportable seller” is any Canadian resident who is registered with a platform and has received amounts during the year from sales made on that platform. However, while all income from online sales are reportable as income, the cost to the CRA of pursuing taxpayers who earn very small amounts from such sales and/or do so very infrequently would almost certainly outweigh the benefit of any additional tax revenue collected as a result. Consequently, individuals who meet the definition of a reportable seller, but who trade infrequently or for very small amounts, are considered to be “excluded sellers” who are exempted from the new reporting requirements.
Notwithstanding, the threshold amounts which allow an individual to be characterized as an excluded seller (and for that reason exempt from the reporting requirements) are actually quite low. In order to be an excluded seller, an individual must have fewer than 30 sales per year and have earned no more than a total of $2,800 on such sales. Consequently, an individual who, during 2024, makes an average of three sales per month (36 per year) and receives an average of $80 per sale would be considered to be a reportable seller and the activities and income earned by that individual during 2024 would be reported to the CRA by January 31, 2025.
Where reporting is required, the obligation to report falls on the platform operator, who must provide the CRA with both identification and activity information with respect to each reportable seller, and provide a copy of that information to the reportable seller. The information reported can include:
- Identification information
- Name of seller;
- Seller’s primary address;
- Sellers’s date of birth;
- Seller’s tax identification number (for Canadian individuals, that means their social insurance number); and
- Seller’s financial account identifiers (meaning bank account numbers)
- Activity information
- Total income from sales (paid or credited), and number of sales, broken down by calendar quarter, and
- Fees, commissions, or taxes withheld or charged by the platform operator.
Platform operators who are required to report under the new rules may ask sellers who are registered with their platform for additional information, in order to confirm whether an individual is a reportable seller for purposes of those reporting rules. Responding to such a request is not optional, as the new rules permit the CRA to assess a penalty of $500 where a seller fails to provide his or her social insurance number when such information is requested by a platform operator.
Detailed information on the new reporting rules for digital platform operators can be found on the CRA website at https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/reporting-rules-digital-platforms.html. Individuals who sell goods or services through online platforms or apps can find information summarizing their income tax and goods and services/harmonized sales tax obligations with respect to income earned from those activities on the same website at https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/platform-economy.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.
While the need for charitable donations for any number of causes is a year-round reality, appeals for such donations tend to increase as the holiday season and the end of the calendar year approach. And generally, those appeals are met, as 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 both federal and provincial tax credits for qualifying donations made. 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.
While the need for charitable donations for any number of causes is a year-round reality, appeals for such donations tend to increase as the holiday season and the end of the calendar year approach. And generally, those appeals are met, as 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 both federal and provincial tax credits for qualifying donations made. 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 is an additional reason, when planning charitable donations, to ensure that such 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. Finally, where the taxpayer making the donation has taxable income (for 2024) over $246,752, 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 before the end of the calendar year are maximized. For example, a qualifying charitable donation of $400 made in December 2024 will receive a federal credit of $88.00 ($200 times 15% plus $200 times 29%). If the same amount is donated, but the donation is split equally between December 2024 and January 2025, the total credit claimable is only $60.00 ($200 times 15% plus $200 times 15%), and the 2025 donation can’t be claimed until the 2025 return is filed in April of 2026. And, of course, the larger the donation made 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’s also possible to carry forward, for up to five years, donations which were made in a particular tax year, but not claimed on the tax return for that year. So, if donations made in 2024 don’t reach the $200 level, it’s usually worth holding off on claiming the donation and carrying it 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 2019, 2020, 2021, 2022, or 2023 tax years can be carried forward and added to the total donations made in 2024, and the total then claimed on the 2024 tax return. There is a ceiling on the amount of donations which can be claimed in any one calendar year, but that ceiling is a very generous one – a taxpayer can claim any qualifying current or carryforward donations up to a limit of three quarters of the taxpayer’s net income for the year.
When claiming charitable donations, it’s possible to combine donations made by oneself and one’s spouse and claim them on one spouse’s return. Generally, it makes sense to do so in order to maximize the total amount of donations claimed by a single individual, and therefore the amount of donations which can qualify for the higher tax credit rate(s).
Regardless of when a charitable donation is made or who claims it for tax purposes, would-be donors are well advised to carefully consider the charities to which they donate. It’s an unfortunate reality that while most organizations seeking charitable donations are legitimate, the charitable sector attracts its share of scammers and fraudsters whose only aim is to personally profit from the generosity of others. Such charitable donation frauds arise, in particular, whenever there are Canadian or world events like wars or natural disasters and people are particularly motivated to help. After every such event a flurry of “instant” charities spring to life, seeking donations which may or may not actually be used as represented. And, while some of the individuals or organizations who seek to raise funds in response to particular events may actually be well intentioned, the reality is that they are unlikely to have either the infrastructure or the experience needed to actually carry out their stated or intended aims. And others, of course, are simply scammers seeking to capitalize on the desire of Canadians to help in response to disaster or other need.
There are two ways to ensure that one’s charitable dollar is actually utilized as intended. The first is to donate only to large international charities which have been in existence for some time and which have both expertise and experience in utilizing charitable donations in an efficient and effective way. However, where a donor is deciding whether to make a donation to a newer or less well-known charity, it’s relatively easy to find information about that charity on the website of the Canada Revenue Agency.
Only donations made to registered charities can be claimed for purposes of the charitable donations tax credit. The Canada Revenue Agency maintains on its website a listing of all such registered charities; that listing (which is searchable) can be found at https://apps.cra-arc.gc.ca/ebci/hacc/srch/pub/dsplyBscSrch?request_locale=en.
That webpage will also provide information on the charity’s activities, including the date on which it became a registered charity. Through that site (which is updated daily by the Canada Revenue Agency), it’s also possible to obtain information on the countries in which the charity operates, the nature of its charitable activities, and details of its revenues and expenditures, all of which can help a would-be donor to determine whether or not to make a donation.
Detailed information on calculating and claiming the charitable donation tax credit is available on the same website at Giving to charity: Information for donors - Canada.ca.
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.
Residents of the eight Canadian provinces in which the federal fuel charge (more commonly known as the federal carbon tax) is levied are entitled to claim and receive the federal Canada Carbon Rebate (CCR). That rebate (formerly known as the Climate Action Incentive Payment) is a non-taxable payment made four times a year (in April, July, and October of 2024 and January 2025) to help offset the cost of that federal carbon tax.
Residents of the eight Canadian provinces in which the federal fuel charge (more commonly known as the federal carbon tax) is levied are entitled to claim and receive the federal Canada Carbon Rebate (CCR). That rebate (formerly known as the Climate Action Incentive Payment) is a non-taxable payment made four times a year (in April, July, and October of 2024 and January 2025) to help offset the cost of that federal carbon tax.
For 2024, residents of Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, Newfoundland and Labrador, New Brunswick, and Prince Edward Island are eligible for the CCR. Unlike other federal credits, eligibility for the CCR is based solely on the province of residence of the individual, and is not affected in any way by the income of the person claiming it. Specifically, all individuals who were resident in Canada during the previous month and are resident in any of the above eight provinces on the first day of the month in which the rebate is paid are eligible to receive it, regardless of income.
The CCR has two elements – the basic rebate and the rural supplement. The amount of both will differ, depending on the taxpayer’s province of residence. The basic annual rebate amounts payable for the 2024-25 payment year (April 1, 2024 – March 31, 2025) are as follows.
First Adult Second Adult Each Minor Child
Alberta $900 $450 $225
Saskatchewan $752 $376 $188
Manitoba $600 $300 $150
Ontario $560 $280 $140
Nova Scotia $412 $206 $103
New Brunswick $380 $190 $95
PEI $440 $220 $110
Nfld and Labrador $596 $298 $149
The rural supplement, as the name implies, is provided to Canadians who live outside metropolitan areas and who are likely to have higher energy needs and consequently greater federal carbon tax expenditures. The rural supplement is calculated as a percentage of the basic rebate and was formerly equal to 10% of that basic rebate. However, that percentage amount has been increased, effective as of June 2024, to 20% of the basic rebate.
The increased rural supplement was not included in the April and July 2024 payments; consequently, the payment to be made on October 15 will include both the increased rural supplement for October, as well as retroactive payments for April and July.
While the general rules provide that the rural supplement is provided to Canadians who live outside metropolitan areas, all residents of Prince Edward Island automatically receive the rural supplement, and that is reflected in the figures shown above.
Unlike some other federal credit and rebate programs, there is no requirement for individual Canadians to file an application for the CCR for adults. However, in order to receive the CCR, all individuals must file an annual tax return with the Canada Revenue Agency, as information on that return is used to determine both eligibility (based on province of residence) and the amount of the available rebate (based on family composition) for the upcoming benefit year. There is no need to check any box or complete any particular line of the return in order to receive the basic rebate; however, individuals who are claiming the rural supplement (other than residents of PEI) must check off a box on page 2 of the federal income tax return, indicating that they are eligible for that supplement. Finally, in order to receive the CCR for a minor child, it is necessary that the child be registered for purposes of either the Child Tax Benefit program, or the GST/HST tax credit.
As shown above, a rebate amount is issued for each adult and each child in a family. However, only one global payment including rebate amounts for all family members is issued each quarter (around the 15th of April, July, October, and January). Those payments (of both the basic rebate and the rural supplment) are made to the adult in the family whose tax return for the previous year is filed first. Where parents share custody of a child or children, 50% of the rebate for that child or children will be paid to each parent.
The Canada Carbon Rebate is among the easiest and most beneficial of the federal rebates and credits to qualify for and to claim, in that the only qualification needed is that the taxpayer be a resident of one of the provinces in which the federal carbon tax is levied, the only step needed to claim the rebate is the filing of an annual tax return, and finally, the full amount of the rebate (which can be as much as $1,800 annually for a family of four) is non-taxable and is received regardless of individual or family income.
The basic rules governing the Canada Carbon Rebate program are straightforward, and any needed computation of the amount of benefit claimable is done by the CRA when the taxpayer’s return is assessed. Taxpayers who have questions about the CCR can find detailed information on the program on the CRA website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-carbon-rebate.html and https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4215.htm.
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 Old Age Security (OAS) program is one of the two major federal benefit programs available to older Canadians – the other being the Canada Pension Plan (CPP). While both programs provide taxable monthly payments to Canadians, there are significant differences between the two. The Canada Pension Plan is a contributory system, with Canadians contributing a percentage of income earned during their working years, and with the amount of benefits receivable based on the amount of contributions made. By contrast, OAS benefits are paid out of general government revenues, with no requirement that recipients pay into the plan. The amount of the monthly OAS benefit is a fixed amount which is payable to anyone who has been resident in Canada for at least 40 years after the age of 18. (Reduced benefits are payable to those whose period of Canadian residence after the age of 18 is between 10 and 40 years.) For the fourth quarter of 2024 (October to December), that maximum monthly benefit for recipients under the age of 75 is $728., while benefit recipients aged 75 and older can receive up to $800. per month.
The Old Age Security (OAS) program is one of the two major federal benefit programs available to older Canadians – the other being the Canada Pension Plan (CPP). While both programs provide taxable monthly payments to Canadians, there are significant differences between the two. The Canada Pension Plan is a contributory system, with Canadians contributing a percentage of income earned during their working years, and with the amount of benefits receivable based on the amount of contributions made. By contrast, OAS benefits are paid out of general government revenues, with no requirement that recipients pay into the plan. The amount of the monthly OAS benefit is a fixed amount which is payable to anyone who has been resident in Canada for at least 40 years after the age of 18. (Reduced benefits are payable to those whose period of Canadian residence after the age of 18 is between 10 and 40 years.) For the fourth quarter of 2024 (October to December), that maximum monthly benefit for recipients under the age of 75 is $728., while benefit recipients aged 75 and older can receive up to $800. per month.
The other difference between the OAS and CPP programs is that eligible Canadians can begin to receive a CPP retirement benefit at age 60, but OAS benefits can start only once an individual turns 65. Formerly, OAS benefits were automatically paid to eligible recipients once they reached that age. Now, however, Canadians who are eligible to receive OAS benefits are able to defer receipt of those benefits for up to five years, to when they turn 70 years of age. For each month that an individual Canadian defers receipt of those benefits, the amount of benefit eventually received increases by 0.6%. The longer the period of deferral, the greater the amount of monthly benefit eventually received. Where receipt of OAS benefits is deferred for a full 5 years, until age 70, the monthly benefit received is increased by 36%.
It can, however, be difficult to determine, on an individual basis, whether and to what extent it would make sense to defer receipt of OAS benefits. Some of the difficulty in deciding whether to defer – and for how long – lies in the fact there are no hard and fast rules, and the decision is very much an individual one. Fortunately, however, there are a number of factors which each individual can consider when making that decision.
The first such factor is how much total income will be required, at the age of 65, to finance current needs. It’s also necessary to determine what other sources of income (employment income from full- or part-time work, Canada Pension Plan retirement benefits, employer-sponsored pension plan benefits, annuity payments, and withdrawals from registered retirement savings plans (RRSPs) and registered retirement income fund (RRIFs)) are available to meet those needs, both currently and in the future, and when receipt of those income amounts can or will commence or cease. Once income needs and the sources and possible timing of each is clear, it’s necessary to consider the income tax implications of the structuring and timing of those sources of income. The tax rate payable on retirement income (as with all income) increases as income rises and, in addition, the availability of a number of federal tax credits and benefits is eroded at higher incomes. The ultimate goal, as it is at any age, is to ensure sufficient income to finance a comfortable lifestyle while at the same time minimizing both the tax bite and the potential loss of tax credits and benefits.
In making those calculations, the following income tax thresholds and benefit cut-off figures are a starting point.
- Income in the first federal tax bracket is taxed at 15%, while income in the second bracket is taxed at 20.5%. For 2024, that second income tax bracket begins when taxable income reaches $55,867.
- The Canadian tax system provides (for 2024) a non-refundable tax credit of $8,790 for taxpayers who are age 65 or older at the end of the tax year. The amount of that credit is reduced once the taxpayer’s net income for the year exceeds $44,325.
- Individuals can receive a GST/HST refundable tax credit, which is paid quarterly. For 2024, the full credit is payable to individual taxpayers whose family net income is less than $44,324.
- Taxpayers who receive Old Age Security benefits and have income over a specified amount are required to repay a portion of those benefits through a mechanism known as the “OAS recovery tax”, or clawback. Taxpayers whose net income for 2024 is more than $90,997 will have a portion of their future OAS benefits “clawed-back”.
What other sources of income are currently available?
More and more, Canadians are not automatically leaving the work force at the traditional retirement age of 65. Those who continue to work at paid employment and whose employment income is sufficient to finance their chosen lifestyle may well prefer to defer receipt of OAS. Similarly, a taxpayer who begins receiving benefits from an employer’s pension plan when they turn 65 may be able to postpone receipt of OAS benefits.
Is the taxpayer eligible for Canada Pension Plan retirement benefits, and at what age will those benefits commence?
Nearly all Canadians who were employed or self-employed after the age of 18 paid into the Canada Pension Plan and are eligible to receive CPP retirement benefits. While such retirement benefits can be received as early as age 60, receipt can also be deferred and received any time up to the age of 70. As is the case with OAS benefits, CPP retirement benefits increase with each month that receipt of those benefits is deferred. Taxpayers who are eligible for both OAS and CPP will need to consider the impact of accelerating or deferring the receipt of each benefit in structuring retirement income.
Does the taxpayer have private retirement savings through an RRSP?
Receipt of a monthly pension from an employer-sponsored pension plan is no longer the reality for the majority of Canadian retirees; such retirees have generally saved for their retirement through a registered retirement savings plan (RRSP). While taxpayers can choose to withdraw amounts from such plans at any age, they are required to collapse their RRSPs by the end of the year in which they turn 71, and to begin receiving income from those savings. There are a number of options available for structuring that income but, whatever the option chosen (usually converting the RRSP into a registered retirement income fund (RRIF) or purchasing an annuity), it will mean that the taxpayer will begin receiving taxable income amounts from those RRSP funds in each year after they turn 71. Taxpayers who have significant retirement savings in RRSPs should, in determining when to begin receiving OAS benefits, consider the tax impact that receipt of that additional taxable income amount from their RRSP will have in every future year.
The ability to defer receipt of OAS benefits does provide Canadians with more flexibility when it comes to structuring retirement income. The price of that flexibility is increased complexity, particularly where, as is the case for most retirees, multiple sources of income and the timing of each of those income sources must be considered, and none can be considered in isolation from the others.
Individuals who are undertaking that decision-making process will find some assistance on the Service Canada website. That website provides a very helpful Retirement Income Calculator, which, based on information input by the user, will calculate the amount of OAS which would be payable at different ages. The calculator will also determine, based on current RRSP savings, the monthly income amount which those RRSP funds will provide during retirement. To use the calculator, it is necessary to know the amount of Canada Pension Plan benefit which will be received. Taxpayers who are registered for online access to My Service Canada Account can find that information there; those who are not can obtain that figure by calling Service Canada at 1-800 277-9914.
The Retirement Income Calculator can be found at https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.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.
In the 2024-25 Federal Budget released earlier this year, the federal government announced changes to the rules which govern mortgage lending in Canada. Those changes had two goals: making it easier for first-time home buyers to qualify for a mortgage, and providing an incentive to encourage the building of new residential properties in Canada. Finance Canada recently announced two additional changes to mortgage lending rules; the first of those changes builds on one of the Budget announcements, while the second reduces the amount of the down payment which some home purchasers are required to make.
In the 2024-25 Federal Budget released earlier this year, the federal government announced changes to the rules which govern mortgage lending in Canada. Those changes had two goals: making it easier for first-time home buyers to qualify for a mortgage, and providing an incentive to encourage the building of new residential properties in Canada. Finance Canada recently announced two additional changes to mortgage lending rules; the first of those changes builds on one of the Budget announcements, while the second reduces the amount of the down payment which some home purchasers are required to make.
To understand the purpose and impact of these changes, a bit of background on how mortgage lending works is necessary. In Canada, all home purchasers must make a down payment on the purchase price of a home. The current required minimum down payment is a percentage of the purchase price, as follows:
$500,000 or less ……………………………… |
5% of the purchase price |
$500,000 to $999,999 …………………… |
5% of the first $500,000 of the purchase price; plus |
$1 million or more …………………………… |
20% of the purchase price |
A mortgage is a loan obtained to help finance the purchase of a home, and the mortgage amount is the difference between the down payment made and the purchase price. Where any home purchaser makes a down payment of less than 20% of the purchase price of the property, they are required to obtain (and pay for) mortgage default insurance through the Canada Mortgage and Housing Corporation (CMHC). The home purchaser must, as well, repay that mortgage (known as a “high-ratio mortgage”) within 25 years (known as the “amortization period”). Where the down payment amount is more than 20% of the purchase price of the home, there is no limit on the length of time the homeowner can take to repay the full mortgage amount (although, as a practical matter, the maximum amortization period which most major mortgage lenders in Canada will provide is 30 years.).
In its Budget for the 2024-25 fiscal year, the federal government announced that an extended amortization period would be provided for first-time home buyers purchasing a new residential property. In July of this year, Finance Canada provided details of that change, announcing that mortgage lenders would be allowed to provide 30-year amortization periods on insured mortgages to all first-time home buyers who were purchasing a new residential property. In other words, the existing 25-year limit on amortization periods for high-ratio mortgages insured by the Canada Mortgage and Housing Corporation would be extended to allow for 30-year amortization periods – but only for first-time home buyers purchasing new residential properties. That change was effective as of August 1, 2024. On September 16, Finance Canada announced that eligibility for a 30-year amortization (that is, the option to repay a mortgage over 30 years rather than 25 years) would be expanded to become available to ALL first-time home buyers and to ALL buyers of new residential properties. That change will take effect on December 15, 2024.
In the same announcement made on September 16, changes were made to the rules which determine how large a down payment a home purchaser must make. Specifically, the current requirement to make a minimum 20% down payment on a home costing $1 million or more is increased to apply only to homes costing $1.5 million or more. That change is also effective for any mortgage taken out on or after December 15, 2024. As of that date, required down payments will be as follows:
$500,000 or less ……………………………… |
5% of the purchase price |
$500,000 to $1,499,999 ………………… |
5% of the first $500,000 of the purchase price; plus |
$1.5 million or more ………………………… |
20% of the purchase price |
As with all such measures, there are additional rules which must be consulted to determine eligibility for either an extended amortization period and/or the ability to make a lower down payment. Those rules are outlined in detail in a Backgrounder to the September 16 announcement; that Backgrounder can be found on the Finance Canada website at https://www.canada.ca/en/department-finance/news/2024/09/delivering-the-boldest-mortgage-reforms-in-decades.html. The press releases for the July and September announcements are available on the same website at https://www.canada.ca/en/department-finance/news/2024/07/government-announces-30-year-amortizations-for-insured-mortgages-to-put-homeownership-in-reach-for-millennials-and-gen-z.html, and https://www.canada.ca/en/department-finance/news/2024/09/government-announces-mortgage-reform-details-to-ensure-canadians-can-access-lower-monthly-mortgage-payments-by-december-15.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.
While the current state of the Canadian health care system is far from perfect, Canadians are nonetheless fortunate to have a publicly funded health care system, in which most major medical expenses are covered by provincial health care plans. Notwithstanding, there is a large (and growing) number of medical and para-medical costs – including dental care, prescription drugs, physiotherapy, ambulance trips, and many others – which must be paid for on an out-of-pocket basis by the individual. In some cases, such costs are covered by private insurance, usually provided by an employer, but not everyone benefits from private health care coverage. Self-employed individuals, those working on contract, or those whose income comes from several part-time jobs do not usually have access to such private insurance coverage. Fortunately for those individuals, our tax system acts to help cushion the blow by providing a 15% federal non-refundable medical expense tax credit (METC) to help offset out-of-pocket medical and para-medical costs which must be incurred.
While the current state of the Canadian health care system is far from perfect, Canadians are nonetheless fortunate to have a publicly funded health care system, in which most major medical expenses are covered by provincial health care plans. Notwithstanding, there is a large (and growing) number of medical and para-medical costs – including dental care, prescription drugs, physiotherapy, ambulance trips, and many others – which must be paid for on an out-of-pocket basis by the individual. In some cases, such costs are covered by private insurance, usually provided by an employer, but not everyone benefits from private health care coverage. Self-employed individuals, those working on contract, or those whose income comes from several part-time jobs do not usually have access to such private insurance coverage. Fortunately for those individuals, our tax system acts to help cushion the blow by providing a 15% federal non-refundable medical expense tax credit (METC) to help offset out-of-pocket medical and para-medical costs which must be incurred.
The difficulty for such individuals is that while the tax credit claimable is simple in concept, it can be difficult to determine just what kinds of expenses are claimable for purposes of that credit (not all are, and others are claimable only if certain criteria are met), the extent to which expenses can be claimed (only expenses which exceed a certain amount can be claimed, and that amount changes with the income of the taxpayer), and who should claim the expenses (usually, but not always, it makes more sense for the lower-income spouse to claim medical expenses incurred by the entire family).
It's not hard to see why taxpayers can become confused and frustrated when trying to file a claim for medical expenses on the annual return. However, the process of determining the available claim really comes down to answering three questions, as follows.
- Which of my expenses are claimable and are there additional criteria imposed?
- Of my total medical expenses, how much can I claim?
- Should I or my spouse should make the claim for the medical expense tax credit?
Which of my expenses are claimable, and are there additional criteria imposed?
The good news for taxpayers is that there are a great number of different kinds of medical expenses which qualify for the medical expense tax credit, and the Canada Revenue Agency provides a detailed alphabetical (and searchable) listing of those expenses on its 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.
While each of the medical expenses listed on the CRA website are eligible to be claimed for purposes of the medical expense tax credit, for each such expense it’s necessary to determine whether there are additional criteria which must be met in order to make that particular expense eligible for the credit.
Probably the most important criterion for most taxpayers is that, in some cases, a particular expense is only claimable if a prescription has been obtained from a medical doctor indicating a need on the part of the taxpayer to incur that expense. However, making a determination of when it’s necessary to obtain a prescription from a medical professional in order to ensure that the planned expenditure will qualify for the credit is far from intuitive. For instance, in order to claim the medical expense tax credit for the cost of a cane or a walker, it is necessary to obtain a prescription for that cane or walker. However, where costs are incurred to purchase a wheelchair, those costs are eligible for the medical expense credit, with no requirement that a prescription of any kind be obtained.
The listing of eligible medical expenses found on the CRA website does indicate the kinds of expenses for which a prescription is required; where the amount of a planned expenditure for a medical expense is significant, it’s well worth consulting the CRA website to ensure that the purchase is done in a way that will make it possible to claim the METC for the cost incurred.
Other types of medical expense costs can be claimed for purposes of the credit only where the person incurring that expenditure qualifies for the federal disability tax credit. Once again, the listing found on the CRA website indicates the types of expenditures to which this requirement applies.
Of my total medical expenses, how much can I claim?
Here again, the basic rule which determines how much a taxpayer can claim in a particular taxation year can be stated simply, but is more complex to apply. The basic rule is that for a taxation year a taxpayer can claim eligible medical expenses which exceed 3% of the taxpayer’s net income, or $2,759, whichever is less.
Put in more practical terms, the rule for 2024 is that any taxpayer whose net income for the year is $91,967 or less will be entitled to claim medical expenses that are greater than 3% of his or her net income for the year. Those having income of more than $91,967 will be limited to claiming qualifying expenses which exceed the $2,759 threshold.
Take, for example, a taxpayer who has $60,000 in net income for 2024 and incurs $3,400 in eligible medical expenses during the year. The computation of the available METC claim for 2024 is as follows. Based on the 3% of net income rule, the taxpayer will be entitled to claim medical expenses incurred which are more than $1,800 (3% of net income for the year). That taxpayer will therefore be able to claim $1,600 ($3,400 minus $1,800) in medical expenses for purposes of the METC.
The other aspect of determining the total expenses which can be claimed for purposes of the medical expense tax credit 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 2024 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.
Which spouse should make the claim for the medical expense tax credit?
Medical expenses incurred by family members – the taxpayer, their spouse, and children who are under the age of 18 at the end of 2024, as well as certain other dependent relatives – can be added together and claimed by either spouse. In most cases, it’s best to make that claim on the tax return of the lower-income spouse, in order to maximize the amount of claimable expenses (remembering that only expenses greater than 3% of net income can be claimed).
That said, it’s also necessary to ensure that the spouse making the claim has tax payable for the year. The reason for this is that the METC is a non-refundable credit, meaning that it can be used to reduce tax otherwise payable, but cannot create or increase a refund. So, in order to maximize the use of the METC in a year, it should be claimed by the spouse whose tax payable for the year is at least as much as the amount of the METC to be claimed.
As the end of the calendar year approaches, it’s a good idea to add up the medical expenses which have been incurred during 2024, as well as those paid during 2023 and not claimed on the 2023 return. Once those totals are known, it will be easier to determine whether to make a claim for 2024 or to wait and claim 2024 expenses on the return for 2025. And if the decision is to make a claim for 2024, knowing what medical expenses were paid, and when, will enable the taxpayer to determine the optimal 12-month period for that claim.
Finally, it’s a good idea to look into the timing of medical expenses which will have to be paid early in 2025. Where those are significant expenses (for instance, a particularly costly medication which must be taken on an ongoing basis, or some expensive dental work) it may make sense, where possible, to accelerate the payment of those expenses to November or December 2024, where that means they can be included in 2024 totals and claimed on the return for this 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.
The federal government provides a number of non-refundable tax credits and benefits to Canadians under the umbrella term “child and family benefits”, but likely the most widely available and most generous of those programs is the Canada Child Benefit (CCB).
The federal government provides a number of non-refundable tax credits and benefits to Canadians under the umbrella term “child and family benefits”, but likely the most widely available and most generous of those programs is the Canada Child Benefit (CCB).
The CCB is paid as a non-taxable monthly benefit to Canadian residents who have and live with one or more children under the age of 18 for whom they are primarily responsible. The CCB program, which was first introduced in 1993, replaced the former Family Allowance program, and has since gone through a number of iterations and name changes. What follows is a summary of what is available to Canadian families under the CCB program in 2024.
The CCB program has two types of benefits – the basic Canada Child Benefit (CCB) and a Child Disability Benefit (CDB). The first, the basic CCB, is provided to eligible residents of Canada who have one or more children who are under the age of 18 and who live with that child or children. The child disability benefit (CDB) is an additional monthly benefit intended to provide financial assistance to families who are caring for children who have a severe and prolonged impairment in physical or mental functions. Generally, where a child is eligible for the federal disability tax credit, parents who live with that child will be eligible to receive the CDB.
The current benefit year for both the CCB and the CDB runs from July 2024 to June 2025. During this benefit year, maximum benefits payable under the basic CCB are as follows:
- $7,787 per year ($648.91 per month) for each eligible child under the age of 6; and
- $6,570 per year ($547.50 per month) for each eligible child aged 6to 17.
Benefit eligibility under the CCB program is affected by family net income earned during the previous tax year. In other words, the amount of benefit which can be received during the 2024-25 benefit year is determined, in part, by the amount of family net income for 2023. For the 2024-25 benefit year, families having 2023 net income of $36,502 or less will receive the maximum CCB. Where that 2023 net income is greater than $36,502, the amount of benefit receivable is reduced by specified percentages and amounts, which are based on family net income and the number of children in the family. The actual benefit reduction percentages and amounts are as follows.
- For families with one eligible child, benefits are reduced by 7% of family net income between $36,502 and $79,087. Where family net income is more than $79,087, the benefit reduction is $2,981 plus 3.2% of family net income over $79,087.
- For families with twoeligible children, benefits are reduced by 13.5% of family net income between $36,502 and $79,087. Where family net income is more than $79,087, the benefit reduction is $5,749 plus 5.7% of family net income over $79,087.
- For families with three eligible children, benefits are reduced by 19.0% of family net income between $36,502 and $79,087. Where family net income is more than $79,087, the benefit reduction is $8,091 plus 8.0% of family net income over $79,087.
The Canada Disability Benefit provides eligible families with both an additional benefit amount and higher income thresholds which determine eligibility for that additional benefit amount. For the 2024-25 benefit year, the CDB provides up to $3,322 per year ($276.83 per month) for each child eligible for the disability tax credit (DTC). The CDB starts being reduced when family net income is more than $79,087, with the reduction calculated as follows: for families with one child eligible for the DTC, the reduction is 3.2% of the amount of 2023 family net income over $79,087, and for families with two or more children eligible for the DTC, the reduction is 5.7% of the amount of 2023 family net income over $79,087.
The number of variables – age of children, number of children and family net income – can make it difficult to easily calculate the amount of CCB or CDB for which a family is eligible during the current benefit year. To assist in that calculation, the federal government provides an online calculator which will determine that amount, based on information provided by the taxpayer. That online calculator can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-family-benefits-calculator.html.
There are two significant ways in which the CCB program differs from other federal tax credit and benefit programs. The first is that the CCB and CDB are paid once per month, throughout the benefit year (most other such credits are paid on a quarterly basis). CCB and CDB are paid around the 20th of each month – a listing of actual payment dates during 2024 can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-payment-dates.html.
The second difference between the CCB and other programs is more significant – unlike some other programs, CCB amounts are not paid automatically to eligible recipients. In order to receive the CCB and the CDB, it is necessary both to apply for the benefit(s) and to file an annual tax return in order to ensure that benefit payments continue. Information on how to apply is available at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-apply.html.
The costs of raising children are many and varied, and the financial resources required have never been small. Over the past few years, increases in both interest rates and, especially, the rate of inflation have added to nearly every one of those costs to a significant degree. Receipt of a CCB payment each month can make a substantial contribution toward meeting those costs: a Canadian family which has two children, aged 5 and 7, and whose family net income for 2023 was $50,000 can receive just over $1,000 each month in tax-free benefits during the 2024-25 benefit year.
Finally, many (although not all) Canadian provinces and territories provide a benefit to families with children living in that province or territory, which is additional to any available federal CCB which a family can claim. Detailed information on both the federal and provincial/territorial child and family benefit programs can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-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.
Canada’s tax system is a self-assessing one, meaning that the onus rests on individual taxpayers to file their annual return each spring and to pay any amounts owed. The compliance rate in Canada is high – most Canadian taxpayers comply with those tax obligations, filing returns and making any required payments on a consistent basis. Where such tax obligations aren’t met, however, the Canada Revenue Agency (CRA) has the authority to impose both penalties and interest charges.
Canada’s tax system is a self-assessing one, meaning that the onus rests on individual taxpayers to file their annual return each spring and to pay any amounts owed. The compliance rate in Canada is high – most Canadian taxpayers comply with those tax obligations, filing returns and making any required payments on a consistent basis. Where such tax obligations aren’t met, however, the Canada Revenue Agency (CRA) has the authority to impose both penalties and interest charges.
The types and amounts of penalties which can be assessed vary widely, depending on the nature of the non-compliance and, frequently, whether the taxpayer is a “repeat offender”. However, interest charges levied are always the same where taxes aren’t paid in full and on time, and those interest charges can be very substantial.
By law, the CRA charges interest at a rate which is four percentage points higher than commercial interest rates. For the third quarter of 2024, the CRA charges interest on outstanding tax amounts owed at a rate of 9.0%. More significantly, all such interest charges are compounded daily, meaning that each day the taxpayer is charged interest on both the tax amount owed and on the previous day’s interest charges. In such circumstances, interest charges can accumulate very quickly.
Where a failure to meet one’s tax obligations is simply the result of carelessness or negligence on the part of the taxpayer, it’s really not possible to avoid such charges. Sometimes, however, taxpayers fail to meet their tax obligations for reasons that are entirely outside their control. When that happens, the CRA may be willing to extend relief by forgiving interest and penalty charges, in whole or in part, through the Agency’s Taxpayer Relief Provisions.
It's important to note, at the outset, that while the CRA has issued guidelines on the circumstances in which interest and penalty relief may be provided, the decision to provide such relief is entirely discretionary on the Agency’s part – there is no right to interest and penalty relief. Second, while interest and penalty relief may be available to the taxpayer, no relief is provided with respect to actual tax amounts owed. No matter the circumstances, tax amounts owed must always be paid.
The guidelines issued by the CRA on when interest and penalty relief may be available fall into two general categories. The first addresses taxpayers who are unable to meet their tax obligations as the result of extraordinary circumstances. The first such circumstance is natural or man-made disasters which are, of course, becoming more and more common as each year increasing numbers of Canadians are forced to evacuate due to wildfires and floods. At such times, meeting one’s tax obligations is understandably a very low priority and, in the worst case scenario, the natural disaster which forced the evacuation may also result in the destruction of the taxpayer’s financial and tax records and supporting documentation, making it difficult or impossible to file returns or determine or pay amounts owed.
The other extraordinary circumstances in which the CRA is prepared to provide relief from penalty and interest charges are those which are specific to the taxpayer involved. As outlined on the CRA website, such circumstances generally involve either serious illness or accident, or serious emotional or mental distress, such as would result from a death in the taxpayer’s family.
Finally, the CRA is prepared to consider providing interest relief where the taxpayer is experiencing significant financial hardship. The CRA’s guidelines, as outlined on the Agency’s website, indicate that it would consider providing relief where paying interest amounts owed would make it difficult to provide basic necessities, such as food, medical help, transportation, or shelter, or where interest charges make up the majority of the amount owed and the taxpayer is unable to make a reasonable payment arrangement with the CRA.
In order to receive relief in situations of financial hardship, a taxpayer must be able to provide the CRA with detailed information on their current financial situation. That financial situation is outlined on a prescribed CRA form, which is available at Form RC376, Taxpayer Relief Request – Statement of Income and Expenses and Assets and Liabilities for Individuals. In addition to the information submitted on that form, the taxpayer must also provide supporting documentation, such as current mortgage statement(s), property assessment(s), rental agreement(s), loans and recurring bills, bank and credit card statements for the most recent three months, and current investment statements
Regardless of the reasons or circumstances which have led the taxpayer to submit an application for relief, the process of filing that application is the same. Taxpayers who have registered for the CRA online service My Account can file their application using that service. Those who are not registered for My Account, or would prefer filing a paper application, can find the required form on the CRA website at Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties and Interest. The address to which the completed form should be sent can be found on the last page of Form RC4288.
Whatever the method by which an application for relief is filed, the CRA will review the information submitted and make a determination of whether to cancel interest and/or penalty amounts owed, in whole or in part, in order to allow the taxpayer to pay off their tax debt. The factors considered by the Agency in determining whether to grant relief will, of course, depend in part on the circumstances giving rise to the application. In general, however, the Agency will consider the taxpayer’s tax return filing and payment history, whether the taxpayer knowingly let a balance owing exist (resulting in additional interest charges), whether reasonable care was taken in the management of the taxpayer’s tax affairs, and, finally, whether the taxpayer acted quickly to correct any delay or omission.
The CRA’s goal is to make a decision on straightforward applications made under its Taxpayer Relief Provisions within six months (180 days) after the application is received. However, not surprisingly, the Agency is currently receiving a higher-than-usual number of applications, meaning that the timeline for making decisions on those applications is now closer to eight months (or longer, for complex applications).
Where the taxpayer’s request is denied, they can make on online request to have the decision reviewed. If that decision is also negative, the only recourse is to ask a judge to review the CRA’s decision. In the great majority of cases, however, the cost of taking that step is likely to be greater than the amount of interest and penalties at issue.
In all cases, the best course of action for the taxpayer is to be proactive – to contact the CRA as soon as the taxpayer is aware that filing of a required return, or full payment of taxes owed, will not be possible. Taking the initiative and moving quickly to resolve the problem will both minimize the amount of interest which will accrue on unpaid taxes and will count in the taxpayer’s favour when the CRA considers whether to allow an application for waiver of those interest and penalty charges.
Detailed information on the Taxpayer Relief Provisions is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/taxpayer-relief-provisions.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 past five years have been a tough financial slog for most Canadian families, as they struggled to cope with the pandemic, followed by inflation which tripled from under 2% in mid-2020 to over 6% by the end of 2022, and, finally, interest rate increases which saw the Bank Rate go from less than 1% in April of 2020 to over 5% in April of 2024.
The past five years have been a tough financial slog for most Canadian families, as they struggled to cope with the pandemic, followed by inflation which tripled from under 2% in mid-2020 to over 6% by the end of 2022, and, finally, interest rate increases which saw the Bank Rate go from less than 1% in April of 2020 to over 5% in April of 2024.
While the relentless upward climb in both the rate of inflation and interest rates are finally showing signs of slowing, it’s nonetheless a fact that the cost of two truly non-discretionary components of a family budget – food and shelter – are still much more expensive than they were five years ago, and nearly all Canadian families are feeling the pinch.
While there’s plenty of financial pain to go around, one group of Canadians that is especially likely to be dealing with bad financial news in the near future is those who are renewing a mortgage. Home buyers who purchased a home five years ago and took out a five-year mortgage (as the majority do) likely got that mortgage at an interest rate of around 4% – or even less. Those seeking to renew that mortgage this year are likely facing renewal at a rate of at least 6%. That’s about a 50% increase in the mortgage interest rate, which can be enough to make the difference between a mortgage payment that is affordable, and one that is not.
To see why that’s the case, it helps to understand how mortgage payments are calculated. All mortgage payments are determined by three figures. The first is the size of the mortgage – the “principal amount”, which is the cost of the property purchased minus any downpayment made. The second is the interest rate which is charged on that principal amount. And the third is the length of time over which the principal amount of the mortgage is to be repaid – known as the “amortization period”.
Under Canadian law, anyone purchasing a home must make a down payment, and the amount of that downpayment depends on the purchase price of the property, as follows:
$500,000 or less |
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$500,000 to $999,999 |
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$1 million or more |
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Where any home purchaser makes a down payment of less than 20% of the purchase price of the property, they must obtain mortgage default insurance through the Canada Housing and Mortgage Corporation (CHMC) and must, as well, repay that mortgage within 25 years. In other words, the maximum amortization period on a mortgage principal amount which represents more than 80% of the purchase of the property is 25 years. (Finance Canada recently announced that a 30-year amortization period would be allowed on some insured mortgages; however, that measure applies only as of August 1, 2024 and only to a relatively small group – first-time home buyers purchasing a newly-built property.)
Where the home purchaser makes a down payment of more than 20% (which would likely be the case for those who are already homeowners and are purchasing as part of a move up the “property ladder”), the length of the amortization period – the time frame in which the mortgage must be repaid – is not subject to that 25-year restriction. Rather, the length of that amortization period is something which is determined by agreement between the borrower and the financial institution which provides the mortgage financing.
The impact on monthly mortgage payments of a 2% change in a mortgage interest rate can be seen in the following example.
Assume that in 2019 a property owner sold their first home and, using the proceeds of that sale, is able to put down a $200,000 deposit on a home costing $650,000. The remainder of $450,000 of the purchase price is financed through a five-year mortgage at 4.0%, amortized over 25 years. The monthly mortgage payments are $2,367.
In 2024 that mortgage comes up for renewal, but the interest rate is now 6.0%, and the amortization period is now down to 20 years. Payments made over the previous five years have reduced the mortgage principal amount from $450,000 to $392,000, but the increased interest rate means that monthly payments will now be $2,800 – an increase of almost $450 per month, or $5,400 per year.
It's important to remember, as well, that mortgage payments are made out of after-tax income. In other words, in order to come up with the $5,400 per year needed to meet the increased mortgage payment obligations, a homeowner will either have to reallocate that $5,400 from the payment of other household expenditures, or will have to generate additional pre-tax income of almost $8,000 annually, which is $5,600 in after-tax income, assuming a marginal tax rate of 30%. Neither is a realistic scenario for most Canadian households right now.
Homeowners facing a mortgage renewal which will result in monthly mortgage payment obligations which cannot be met out of current household resources are between the proverbial rock and a hard place. Realistically, the only component of a mortgage over which a homeowner who is renewing that mortgage has any element of choice is the amortization period. The principal amount of the mortgage is the amount which was originally borrowed, less any principal repayments made, and can only be reduced by making additional payments. The interest rates in effect at the time of renewal are set by the lender and, while subject to negotiation, are not likely to be significantly less than the lender’s posted rates. Where a homeowner is facing an increase in monthly mortgage payments which simply aren’t manageable, the options are limited. The first is a sale of the home and the purchase of a smaller, less expensive property, but that’s rarely a situation which any homeowner wants to be forced into. The second option (with the agreement of the lender) is to extend the amortization period of the mortgage, in order to reduce monthly mortgage payments.
Extending the amortization period of a mortgage can have a dramatic effect on the amount of monthly mortgage payments, but it’s a choice that also comes with a cost, in the form of increased total interest payments over the life of the mortgage.
Continuing with the above example, assume that the homeowner who is renewing the mortgage at 6.0% for a five-year term chooses to extend the amortization period on that mortgage from the current 20 years to 30 years. (Although there is no legal limit on an amortization period for an uninsured mortgage, most major Canadian lending institutions do not provide amortizations of more than 30 years.)
The change in the amortization period from 20 years to 30 years will result in a monthly mortgage payment of $2,332 on a principal amount of $392,000 at 6% interest, meaning that the new mortgage payment amount will be slightly less than it was over the previous five years since the home was purchased, making it a manageable amount for the homeowner.
The cost of making this choice lies in the amount of interest which is paid on the mortgage over that amortization period, and that cost can be very substantial. If the homeowner had renewed their mortgage based on a 20-year amortization and a monthly mortgage payment of $2,800, the amount of interest which would be paid over that 20-year period would be $278,000. If the amortization period is changed to 30 years, reducing the monthly mortgage payment to $2,332, the amount of interest that would be paid over that 30-year period will be $447,000. Choosing to extend an amortization is a very consequential financial decision.
As is almost always the case in financial planning, there isn’t a “right” answer – the right course of action depends almost entirely on the individual circumstances involved. For homeowners who are faced with a choice between extending an amortization period or being forced into either defaulting on the mortgage or selling the house, the decision to extend an amortization period may well be justified in the circumstances. However, where the choice made is to extend an amortization period, it’s important to treat that decision as a short-term measure taken solely to gain some temporary financial relief. A homeowner who extends the amortization period on a mortgage for the upcoming mortgage term can (and should, if at all possible) plan to reduce that mortgage amortization period at the next mortgage renewal date. As well, if and when household finances improve over the next five years, any available funds should be used to make additional payments on the mortgage or, where such additional payments aren’t allowed, to set such funds aside to make a lump-sum payment at the time of the next renewal. Both measures will work to reduce the amount of interest which must be paid over the life of the mortgage.
Being unable to afford one’s mortgage payments and facing the prospect of going into default on the mortgage is a situation that most homeowners would do almost anything to avoid. Those are undeniably stressful circumstances, but in most cases solutions are possible. The federal government, through the Financial Consumer Agency of Canada, provides an extremely useful webpage (at https://www.canada.ca/en/financial-consumer-agency/services/mortgages.html) which contains a wealth of information on mortgages and mortgage financing. That webpage includes a Mortgage Calculator (found at https://itools-ioutils.fcac-acfc.gc.ca/MC-CH/MC-CH-eng.aspx) which can be used to calculate the effect that different interest rates and amortization periods will have on both the amount of monthly mortgage payments and total interest costs which will be paid over the life of the mortgage. Taking the time to do so will enable a homeowner facing a mortgage renewal to make the most informed choice in their particular circumstances.
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.
Members of the baby boom generation who were born between 1946 and 1965 are now between 59 and 78 years of age, and make up about a quarter of the Canadian population. Many, if not most, are now retired, and the older members of that generation are likely experiencing the changes to physical health, strength, and agility that come with age. The process of aging is an extremely variable one – some individuals are healthier and more active at age 80 than others are at 60, but the physical changes that accompany aging come, inevitably, to everyone. And when those changes take place, it’s necessary to make some hard decisions about a number of things.
Members of the baby boom generation who were born between 1946 and 1965 are now between 59 and 78 years of age, and make up about a quarter of the Canadian population. Many, if not most, are now retired, and the older members of that generation are likely experiencing the changes to physical health, strength, and agility that come with age. The process of aging is an extremely variable one – some individuals are healthier and more active at age 80 than others are at 60, but the physical changes that accompany aging come, inevitably, to everyone. And when those changes take place, it’s necessary to make some hard decisions about a number of things.
One of the most consequential decisions to be made when age-related physical changes become a factor in decision-making is whether one’s current living arrangements are still suitable. The overwhelming choice of older Canadians is to “age in place” – that is, to remain in the homes they already occupy, living independently in a familiar community and close to family and friends. While that’s the ideal, existing living arrangements can, in some cases, no longer meet the needs of the individual, or can even be unsafe.
Almost always, changes can be made to an existing home to make it both more convenient and safer to live in for an older resident. Those changes can range from something as small as the installation of a grab bar in a shower or bath to something as extensive as renovations which will allow for one-floor living. All such changes, however, come with a price tag. Fortunately, the federal government (and some provincial governments) offer programs to help mitigate that cost.
The federal program – the Home Accessibility Tax Credit (HATC) – allows individuals who own and live in their own homes to claim a non-refundable tax credit equal to 15% of the cost of making permanent changes to their home which will make it more accessible or safer for them to live in.
The HATC is in many ways an unusually flexible and generous tax credit. First, the criteria which determine whether a particular expenditure does or does not qualify for the credit are extremely broad, covering both safety and convenience. Specifically, changes made which meet either of the following criteria can qualify for the HATC. Changes made must:
- allow the individual to gain access to, or be mobile or functional within, the dwelling; or
- reduce the risk of harm to the individual within the dwelling or in gaining access to the dwelling.
Second, there is no requirement for any kind of assessment or certification by a medical professional that a particular kind of change to the home is needed, or is justified by the homeowner’s state of physical ability or disability – such determination is made solely by the owner/resident of the home. Where a homeowner decides that the installation of a railing along a hallway in their home, or a change to a non-slip floor in the bathroom, are necessary for their mobility or safety within the home, then the cost of making those changes can qualify for the credit.
Third, expenses incurred for purposes of the HATC can also be claimed as medical expenses for purposes of the medical expense tax credit. In other words, two different tax credits can be claimed for the same expenditure.
Finally, the credit can be claimed by all “qualifying individuals” meaning anyone who is age 65 or older by the end of the year in which the expenditure is made, or who is eligible for the disability tax credit. There are no income thresholds imposed – the full credit is claimable by any qualifying individual who incurs an eligible expenditure, regardless of their income.
While the eligibility criteria for expenditures under the HATC are very broad, the credit is intended to assist with the cost of changes which become a permanent part of the dwelling, and not those that represent regular maintenance costs or charges for household services. The following types of expenses are specifically not eligible for the HATC:
- amounts paid to acquire a property that can be used independently of the qualifying renovation;
- the cost of annual, recurring, or routine repairs or maintenance;
- amounts paid to buy household appliances;
- amounts paid to buy electronic home-entertainment devices;
- the cost of housekeeping, security monitoring, gardening, outdoor maintenance, or similar services;
- financing costs for the qualifying renovation; or
- the cost of renovation incurred mainly to increase or maintain the value of the dwelling.
In order to qualify for the credit, eligible expenditures must be made to a “housing unit” which is owned and occupied by the person making the claim. That housing unit could be a detached or semi-detached or row house, or a condominium or co-op unit.
Where a qualifying individual (that is, someone who is age 65 or older, or who is eligible for the disability tax credit) lives with and is dependent on another family member (generally, a parent, grandparent, child, grandchild, sibling, aunt, uncle, nephew, or niece) who owns the home in which they both live, that family member can also make a claim for the HATC for changes made to the home to assist their older or disabled relative. For this purpose, such family members are characterized as “eligible individuals”.
Finally, there is a limit on the amount of expenditures which can be claimed for purposes of the HATC, and that limit is $20,000 per year for a particular dwelling. The tax credit claimable is 15% of the eligible expenditure, such that the maximum tax credit which can be claimed is $3,000 per year. The HATC is a non-refundable tax credit, meaning that it can reduce or eliminate federal tax payable, but cannot create or increase a refund. Where the amount of the credit exceeds the tax payable by the qualifying individual and so cannot be fully utilized, the claim can be split between that qualifying individual and any family member who qualifies as an “eligible individual”, as outlined above.
The federal HATC can be claimed by qualifying individuals and eligible individuals who are resident in any province or territory in Canada. Several of those provinces and territories provide similar programs to help offset the cost of incurring such home accessibility changes, but there is unfortunately no uniformity among those programs. Both eligibility criteria (age, income, etc.) and the type of assistance provided (loan, forgiveable loan, refundable or non-refundable tax credits) are different in each province or territory which offers such assistance. However, information on those programs is available on the particular provincial government website, and can usually be found by searching "seniors' home renovations” on those websites.
Detailed information on the federal HATC is available on the federal government 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/line-31285-home-accessibility-expenses.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.
In most cases, the need to seek out and obtain legal services (and to pay for them) is associated with life’s more unwelcome occurrences and experiences – a divorce, a dispute over a family estate, or a job loss. About the only thing that mitigates the pain of paying legal fees (apart, hopefully, from a successful resolution of the problem that created the need for legal advice) would be being able to claim a tax credit or deduction for the fees paid.
In most cases, the need to seek out and obtain legal services (and to pay for them) is associated with life’s more unwelcome occurrences and experiences – a divorce, a dispute over a family estate, or a job loss. About the only thing that mitigates the pain of paying legal fees (apart, hopefully, from a successful resolution of the problem that created the need for legal advice) would be being able to claim a tax credit or deduction for the fees paid.
Unfortunately, while there are some circumstances in which such a deduction can be claimed, those circumstances don’t usually include the routine reasons – purchasing a home, getting a divorce, establishing custody rights, or seeking legal advice about making a will or managing a family estate – for which most Canadians incur legal fees. Generally, personal (as distinct from business-related) legal fees become deductible for most Canadian taxpayers only where they are seeking to recover amounts which they believe are owed to them, particularly where those amounts involved employment or employment-related income or, in some cases, family support obligations.
The first situation in which legal fees paid may be deductible is that of an employee seeking to collect (or to establish a right to collect) salary or wages. In all Canadian provinces and territories, employment standards laws provide that an employee who is about to lose his or her job (for reasons not involving fault on the part of the employee) is entitled to receive a specified amount of notice, or salary or wages equivalent to such notice. In many cases, however, the employee can establish a right to a period of notice (or payment in lieu) greater than the statutory minimum. The amount of notice or payment in lieu of notice which is payable can then become a matter of negotiation between the employer and its former employee, and such negotiations usually involve legal representation and consequently, legal fees. In that situation, legal fees incurred by the employee to establish a right to amounts allegedly owed by the employer are deductible by that former employee. If a court action is necessary and the Court requires the employer to reimburse its former employee for some or all of the legal fees incurred, the amount of that reimbursement must be subtracted from any deduction claimed. In other words, the former employee can claim a deduction only for legal fees which they were personally required to pay in order to collect wages or salary owed and for which they were not reimbursed.
In some situations, an employee or former employee seeks legal help in order to collect or to establish a right to collect a retiring allowance or pension benefits. In such situations, the legal fees incurred can be deducted, up to the total amount of the retiring allowance or pension income actually received for that year (but not including any amounts received which were transferred to the individual’s registered pension plan or registered retirement savings plan). Where the amount of legal fees incurred is greater than the total retiring allowance or pension amount received in the year, the excess can be carried forward and claimed in any of the subsequent seven tax years.
The rules covering the deduction of legal fees incurred where an employee claims amounts from an employer or former employer are relatively straightforward. The same, unfortunately, cannot be said for the rules governing the deductibility of legal fees paid in connection with family support obligations. Those rules have evolved over the years in a somewhat piecemeal fashion – the current rules are as follows.
Legal fees incurred by either party in the course of negotiating a separation agreement or obtaining a divorce are not deductible. Such fees paid to establish child custody or visitation rights are similarly not deductible by either parent.
Where, however, one former spouse has the right to receive support payments from the other, there are circumstances in which legal fees paid in connection with that right are deductible. Specifically, legal fees paid for the following purposes will be deductible by the person receiving those support payments:
- to collect overdue support payments owing;
- to establish the amount of support payments from a current or former spouse or common-law partner;
- to establish the amount of support payments from the legal parent of one’s child (who is not a current or former spouse or common-law partner), but only where that support is payable under the terms of a court order; or
- to try to get an increase in support payments.
As well, the recipient of support payments can deduct legal fees incurred to try to make child support payments non-taxable.
On the payment side of the support payment/receipt equation, the situation is not nearly so favourable, as a deduction for legal fees incurred will not generally not be allowed to a person paying support. More specifically, as outlined on the Canada Revenue Agency (CRA) website, a payer of support cannot claim legal fees incurred to establish, negotiate, or contest the amount of support payments.
Finally, where the Canada Revenue Agency reviews or challenges income amounts, deductions, or credits reported or claimed by a taxpayer for a tax year, any fees paid for advice or assistance in dealing with the CRA’s review, assessment, or reassessment, or in objecting to that assessment or reassessment, can be deducted by the taxpayer. A deduction can similarly be claimed where the taxpayer incurs such fees in relation to a dispute involving employment insurance, the Canada Pension Plan, or the Québec Pension Plan.
Detailed information on the rules which govern the deduction of legal fees incurred is available 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/line-23200-other-deductions.html#toc2. The specific rules which govern the deductibility of legal fees relating to support obligations are outlined in the CRA publication P102 Support Payments, which can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p102.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.
By the middle of August, most students who are beginning post-secondary education this fall have hopefully received an offer of admission from their college or university of choice and are in the final stages of planning the move away from the family home for the first time. While deciding where to live and choosing courses for the upcoming fall semester is undoubtedly exciting, the hard reality is that all such choices come with a price tag – sometimes a very steep one. Regardless of geographic location, housing arrangements, or program choices, post-secondary learning is expensive. There will be tuition bills, of course, but also the need to find housing and pay rent in what is, in most college or university locations, a very tight and very expensive rental market. Those who choose to live in a university residence and are able to secure a place will also face bills for accommodation and, usually, a meal plan.
By the middle of August, most students who are beginning post-secondary education this fall have hopefully received an offer of admission from their college or university of choice and are in the final stages of planning the move away from the family home for the first time. While deciding where to live and choosing courses for the upcoming fall semester is undoubtedly exciting, the hard reality is that all such choices come with a price tag – sometimes a very steep one. Regardless of geographic location, housing arrangements, or program choices, post-secondary learning is expensive. There will be tuition bills, of course, but also the need to find housing and pay rent in what is, in most college or university locations, a very tight and very expensive rental market. Those who choose to live in a university residence and are able to secure a place will also face bills for accommodation and, usually, a meal plan.
Fortunately for students (and the parents who are likely footing much of the bill), there are tax credits and benefits which can be claimed to offset such costs: the credits and benefits which can be claimed by post-secondary students (or their spouses, parents, or grandparents) in relation to the upcoming 2024-25 academic year are summarized below.
Tuition fees
A federal 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 claim a non-refundable federal tax credit equal to 15% of such tuition costs. Many of the provinces and territories (excepting Alberta, Ontario, and Saskatchewan) 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 a myriad of costs which may differ, depending on the particular program or institution, 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 the tuition tax credit:
- Admission fees;
- Charges for use of library or laboratory facilities;
- Exemption fees;
- Examination fees (including re-reading charges);
- 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, however, do not 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;
- 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); 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 credit is a non-refundable one, meaning that it can reduce or eliminate tax otherwise payable, but cannot create or increase a tax refund. Where, as is often the case, a student doesn’t have tax payable for the year because their income isn’t high enough, 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.
Rent, food, and other personal and living expenses
Unfortunately, although housing and food costs will take up a very big chunk of each student’s budget, there is not (and never has been) a tax deduction or credit which is claimable for such costs. In all cases, 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 15% federal tax credit can be claimed for the amount of interest being paid on such debt, in some circumstances. And, while other types of credits related to post-secondary education (like the tuition tax credit) can be transferred to and claimed by other family members, the student loan interest tax credit can be claimed only by the student – no transfer of the credit is allowed.
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 interest paid on a qualifying student loan is eligible for the credit, only some types of student borrowing will qualify for that credit. 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 for students (especially 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, financial institutions sometimes offer, once a student has graduated and begun to repay a government-sponsored student loan, 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 which is used to finance education costs) will never be eligible for the student loan interest tax credit.
As explained in the Canada Revenue Agency 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 government 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.
Finally, the federal government announced, in 2023, that interest would no longer be charged on Canada Student Loans, effective as of April 1, 2023 (although graduates are still responsible for any interest which was levied and accumulated prior to that date). Provincial and territorial student loan programs are not affected by the federal announcement and such loans may still be subject to interest charges, depending on the province. Where interest is levied on a loan provided under a government (federal or provincial) student loan program, that interest will be eligible for the student loan interest tax credit, as outlined above.
Other credits and deductions
While the available student-specific deductions and credits are more limited than they were in previous taxation years, there are nonetheless a number of credits and deductions which, while not specifically education-related, are frequently claimed by post-secondary student (for instance, deductions for moving costs). The Canada Revenue Agency 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 (which was last updated in May 2024), 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.
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 2024 calendar year, hundreds of thousands of Canadians will reach their 71st birthday, and a significant percentage of that group are likely to have saved money for retirement through a registered retirement savings plan (RRSP). Every one of those individuals, whether they are retired, partly retired, or still in the work force, and regardless of the amount of savings accumulated in their RRSPs, will be required, by the end of the calendar year, to make a decision on how to structure and invest their retirement income for the remainder of their lives.
During the 2024 calendar year, hundreds of thousands of Canadians will reach their 71st birthday, and a significant percentage of that group are likely to have saved money for retirement through a registered retirement savings plan (RRSP). Every one of those individuals, whether they are retired, partly retired, or still in the work force, and regardless of the amount of savings accumulated in their RRSPs, will be required, by the end of the calendar year, to make a decision on how to structure and invest their retirement income for the remainder of their lives.
The need to make that decision arises from the rule that all taxpayers who hold funds within an RRSP are required to collapse that RRSP by the end of the calendar year in which they turn 71 years of age – no exceptions and no extensions. It’s a very significant decision, as the course of action chosen will affect the individual’s income for the remainder of their life and, in some cases, actions taken cannot be undone.
While the actual decision is a complex one, the options available to a taxpayer who must collapse an RRSP are actually quite few in number – three, to be exact. They are as follows:
- Collapse the RRSP and include all of the proceeds in income for that year;
- Collapse the RRSP and transfer all proceeds to a registered retirement income fund (RRIF); and/or
- Collapse the RRSP and purchase an annuity with the proceeds.
It’s not hard to see that the first option doesn’t have much to recommend it. Collapsing an RRSP without transferring the balance to a RRIF or using that amount to purchase an annuity means that every dollar in the RRSP will be treated as taxable income for that year. In some cases, where a substantial six figure amount has been saved in the RRSP, that can mean losing nearly half of the RRSP proceeds to income tax. And, while any balance of proceeds left can then be invested, tax will be payable on all investment income subsequently earned.
As a practical matter, then, the choices come down to two: an RRIF or an annuity. And, as is the case with most tax and financial planning decisions, the best choice will be driven by one’s personal financial and family circumstances, risk tolerance, cost of living, and the availability of other sources of income to meet such living costs.
The annuity route has the great advantages of simplicity and reliability. In exchange for a lump-sum amount paid by the taxpayer, the issuer of the annuity agrees to pay the taxpayer a specific sum of money, usually once a month, for the remainder of their life. Annuities can also provide a guarantee period, in which the annuity payments continue for a specified time period (five years, 10 years), even if the taxpayer dies during that time. Finally, annuities can be set up as joint annuities, in which annuity payments will continue until the death of the last annuitant – such joint annuities are most often purchased by spouses. Regardless of how the annuity is structured, the amount of monthly income which can be received is determined by the amount used to purchase the annuity, and also by the gender and, especially, the age of the annuity purchaser(s).
The other factor influencing the amount of income which can be received from an annuity is the interest rates which prevail at the time the annuity is purchased. Between 2009 and 2022, interest rates were so low that an annuity purchase had very little to recommend it. Beginning in early 2022, however, the Bank of Canada increased its benchmark rate several times, and annuity payment rates increased as a result. Currently (as of July 2, 2024) annuity rates for each $100,000 paid to the annuity issuer by a taxpayer who is 70 years of age range from $630 to $662 per month for a male taxpayer and from $574 to $613 for a female taxpayer (the actual rate is set by the company which issues the annuity, and will differ slightly from company to company). Those rates do not include any guarantee period.
For taxpayers whose primary objective is to obtain a guaranteed life-long income stream without the responsibility of making any investment decisions or the need to take any investment risk, an annuity can be an attractive option. There are, however, some potential downsides to be considered. First, an annuity can never be reversed. Once the taxpayer has signed the annuity contract and transferred the funds, they are locked into that annuity arrangement for the remainder of their life, regardless of any change in circumstances that might mean an annuity is no longer suitable. Second, unless the annuity contract includes a guarantee period or is structured as a joint annuity, there is no way of knowing how many payments the taxpayer will receive. If they die within a short period of time after the annuity is put in place, there is usually no refund of amounts invested – once the initial transfer is made at the time the annuity is purchased, all funds transferred belong to the annuity company. Third, most annuity payment schedules do not keep up with inflation – while it is possible to obtain an annuity in which payments are indexed, having that feature will mean a substantially lower monthly payout amount. Finally, where the amount paid to obtain the annuity represents most or all of the taxpayer’s assets, entering into the annuity arrangement means that the taxpayer will not be leaving an estate for his or heirs.
The second option open to taxpayers is to collapse the RRSP and transfer the entire balance to a registered retirement income fund, or RRIF. An RRIF operates in much the same way as an RRSP, with two major differences. First, it’s not possible to contribute funds to an RRIF. Second, the taxpayer is required to withdraw an amount from their RRIF (and to pay tax on that amount) each year. That minimum withdrawal amount is a percentage of the outstanding balance, with that percentage figure determined by the taxpayer’s age at the beginning of the year. While the taxpayer can always withdraw more in a year (and pay tax on that withdrawal), they cannot withdraw less than the minimum required withdrawal for their age group.
Where a taxpayer holds savings in an RRIF, they can invest those funds in the same investment vehicles that were used while the funds were held in an RRSP. And, as with an RRSP, investment income earned by funds held inside an RRIF are not taxed as they are earned. While the ability to continue holding investments that can grow on a tax-sheltered basis provides the taxpayer with a lot of flexibility, that flexibility has a price in the form of investment risk. As is the case with all investments, investments held within an RRIF can increase in value – or decrease – and the taxpayer carries the entire investment risk. When things go the way every investor wants them to, investment income is earned while the taxpayer’s underlying capital is maintained, but that result is never guaranteed.
On the death of an RRIF annuitant, any funds remaining in the RRIF can pass to the RRSP or RRIF of the annuitant’s spouse on a tax-free basis. Where there is no spouse, the balance of funds in the RRIF will be treated, for tax purposes, as income to the RRIF annuitant in the year of death, and must be reported as income on the tax return for the year of death.
While the above discussion of RRIFs versus annuities focuses on the benefits and downsides of each, it’s not necessary – and in most cases not advisable – to limit the options to an either/or choice. It is possible to achieve, to a degree, the seemingly irreconcilable goals of lifetime income security and capital (and estate) growth. Combining the two alternatives – annuity and RRIF – either now or in the future can go a long way toward satisfying both objectives.
For everyone, whether in retirement or not, spending is a combination of non-discretionary and discretionary items. The first category is made up mostly of expenditures for income tax, housing (whether rent or the cost of maintaining a house), food, insurance costs, and (especially for older Canadians) the cost of out-of-pocket medical expenses. The second category of discretionary expenses includes entertainment, travel, and the cost of any hobbies or interests pursued. A strategy which utilizes a portion of RRSP savings to create a secure lifelong income stream to cover non-discretionary costs can remove the worry of outliving one’s money, while the balance of savings can be invested for growth and to provide the income for non-discretionary spending.
Such a secure income stream to cover non-discretionary expenses can, of course, be created by purchasing an annuity. As well, although most taxpayers don’t think of them in that way, the Canada Pension Plan (CPP) and Old Age Security (OAS) have many of the attributes of an annuity, with the added benefit that both are indexed to inflation. By age 71, all taxpayers who are eligible for CPP and OAS will have begun receiving those monthly benefits. Consequently, in making the RRIF/annuity decision at that age, taxpayers should include in their calculations the extent to which CPP and OAS benefits will pay for their non-discretionary living costs.
As of July 2024, the maximum OAS benefit for most Canadians (specifically, those who have lived in Canada for 40 years after the age of 18) is about $718 ($790 for those aged 75 and older) per month. The amount of CPP benefits receivable by the taxpayer will vary, depending on their work history, but the maximum current benefit which can be received at age 65 is about $1,365. As a result, a single taxpayer who receives the maximum CPP and OAS benefits at age 65 will have $25,000 in annual income ($2,083 per month). And, for a married couple, of course, the total annual income received from CPP and OAS can be about $50,000 annually, or $4,166 per month. While $25,000 a year isn’t usually enough to provide a comfortable retirement, for those who go into retirement in good financial shape – meaning, generally, without any debt – it can go a long way toward meeting non-discretionary living costs. In other words, most Canadians who are facing the annuity versus RRIF decision already have a source of income which is effectively guaranteed for their lifetime and which is indexed to inflation. Taxpayers who are considering the purchase of an annuity to create the income stream required to cover non-discretionary expenses should first determine how much of those expenses can already be met by the combination of their (and their spouse’s) CPP and OAS benefits. The amount of any needed annuity purchase can then be set to cover off any shortfall.
While the options available to a taxpayer at age 71 with respect to the structuring of future retirement income are relatively straightforward, the number of factors to be considered in assessing those factors and making that decision are not. All of that makes for a situation in which consulting with an independent financial advisor on the right mix of choices and investments isn’t just a good idea, it’s a necessary one.
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 contemplate retirement with a mixture of anticipation and trepidation. While the benefits of an end to the day-to-day grind of work and commuting (while also having more free time to spend with family and friends) are undeniable, giving up a regular paycheque also means experiencing a degree of financial anxiety. For the majority of Canadians who are not members of a defined benefit pension plan, the overriding concern is how to manage retirement savings in a way that will generate sufficient income to provide a comfortable retirement, while still ensuring that accrued savings will last the remainder of one’s life. How, in other words, to avoid the dismal prospect of outliving one’s savings, or spending too much early in retirement and being left with insufficient income to meet one’s expenses late in life? And, of course, it’s impossible to find a definitive answer to that question, since none of us knows what the future holds, in terms of either health or longevity.
Most Canadians contemplate retirement with a mixture of anticipation and trepidation. While the benefits of an end to the day-to-day grind of work and commuting (while also having more free time to spend with family and friends) are undeniable, giving up a regular paycheque also means experiencing a degree of financial anxiety. For the majority of Canadians who are not members of a defined benefit pension plan, the overriding concern is how to manage retirement savings in a way that will generate sufficient income to provide a comfortable retirement, while still ensuring that accrued savings will last the remainder of one’s life. How, in other words, to avoid the dismal prospect of outliving one’s savings, or spending too much early in retirement and being left with insufficient income to meet one’s expenses late in life? And, of course, it’s impossible to find a definitive answer to that question, since none of us knows what the future holds, in terms of either health or longevity.
Typically, expenses are higher early in retirement, when retirees are likely to be healthier and more active, and retirement plans may include travel and the pursuit of hobbies and interests. However, while such activities and their associated costs likely dwindle as retirees age, other types of expenses come into play – especially expenses related to the need to pay for medical costs, household and personal services, and, ultimately, the prospect of paying for personal and/or medical care in an assisted living facility. The prospect of such future costs can make retirees reluctant to spend accrued savings (or annuity income), out of concern that such funds will be needed in the future to pay for care.
The worry about reaching an age where some degree of care is required (and must be paid for) is an entirely realistic one for retirees. According to Statistics Canada’s figures, the average Canadian who has reached the age of 75 has a life expectancy of another 12 years. And, since that figure represents an average, a significant number of 75-year-olds can expect to live longer than that. Again, according to StatsCan figures, in 2023 there were over 896,000 Canadians aged 85 or older.
With all of these demographic and financial realities in mind, a new kind of annuity – the advanced life deferred annuity, or ALDA – was created in 2019 and is now available to Canadians in the annuities marketplace. As is the case with all annuities, the issuer of an ALDA agrees, in exchange for receiving a specified lump sum amount, to provide an annual income of a specified amount to the annuitant. The difference, however, is while an ALDA can be taken out at any time, payments under the ALDA can be deferred to as late as the end of the year in which the annuitant turns 85.
For example, a retiree who turns 71 in 2024 and who has accumulated $500,000 in retirement savings could transfer $400,000 from his or her RRSP to an RRIF, and use the remaining $100,000 to purchase an ALDA, under which payments would begin at age 85. The retiree now has the security of knowing that the $400,000 held in the RRIF (plus any additional amounts earned from investment returns) doesn’t need to last for the unknown number of years remaining in their life, but instead for a specified period of time (in this case, 14 years), at which time the income stream from the ALDA will begin, to augment or replace the income from the RRIF.
There is a limit on the amount which can be used to purchase an ALDA. That limit is 25% of the amount held in an individual’s RRSP or RRIF, to a lifetime maximum. That lifetime maximum is indexed to inflation and stands at $170,000 for 2024. Taking the example outlined above, the retiree who has accumulated $500,000 in RRSP savings would be using 20% of that amount (or $100,000) to purchase the ALDA, and would be safely under the $170,000 lifetime limit.
While the security provided by such a retirement income structure would certainly be welcome to most retirees, the obvious concern where payments under an annuity are deferred is the possibility that the annuitant won’t live long enough to collect those payments, and that the funds expended to purchase the ALDA will effectively be wasted. There are two options to address that (legitimate) concern. First, an ALDA can be structured as a “joint-life” contract, under which payments will be made to the surviving annuitant (most often the spouse of the ALDA purchaser) for the remainder of their life. It’s also possible to structure the ALDA to provide for a lump sum death benefit to be paid to a beneficiary or beneficiaries (for example, the annuitant’s children) on the death of the annuitant. That death benefit can be any amount up to the amount of the original ALDA purchase, minus any amounts already paid out to the original annuitant. So if the original ALDA purchase was for $100,000 and $25,000 in benefits under the ALDA were paid out prior to the death of the original annuitant, the maximum death benefit amount would be $75,000.
Being able to have certainty of income for one’s very old age is a major benefit of purchasing an ALDA. There is, however, another benefit to be obtained, and that is income and tax deferral.
All Canadians who hold savings in an RRSP must collapse that RRSP by the end of the year in which they turn 71 and, in most instances, such individuals open an RRIF and transfer funds held in the RRSP to that RRIF. Once funds are held in an RRIF, a specified percentage of those funds must be paid out in each year to the RRIF holder. All such withdrawals constitute taxable income to the holder of the RRIF, and that taxable income can affect the RRIF holder’s eligibility for certain tax credits and benefits, like the age credit, Old Age Security benefits, and the GST/HST tax credit. Even if the RRIF holder does not actually need the total amount which must be withdrawn, there is no option to withdraw a lesser amount, and all funds withdrawn are treated as taxable income which can affect eligibility for tax credits and benefit – with no exceptions.
Where an RRIF holder purchases an ALDA, the amount used for that purchase is no longer included in the total balance on which the calculation of required RRIF withdrawals is based. Continuing the above example, if the RRIF holder used $100,000 of their retirement savings to purchase the ALDA, the amount which they would subsequently be required to withdraw from the RRIF each year would be calculated as a percentage of the remaining $400,000 – not the $500,000 which was held in the RRIF prior to the purchase of the ALDA. Both the RRIF holder’s required income and their tax payable for the year will therefore be lower, and the loss of partial or full eligibility for tax credits and benefits will be less likely.
As is the case with most annuities, the terms of an ALDA (purchase amount, single vs. joint annuity, existence of a death benefit, age at which the income stream begins) are up to the ALDA purchaser and the issuer, as long as the basic tax rules governing such plans are adhered to. Everyone’s financial, health, and tax circumstances are different and, as is the case with any retirement income plan, those particular circumstances will drive the decisions made on the best retirement income structure for that individual. Purchasing an ALDA may be the right approach for some retirees, but not for others – but for everyone, having that option adds another element of flexibility to retirement income planning.
More information on ALDAs can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/alda.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.
By the time summer arrives, nearly all Canadians have filed their income tax returns for the previous year, have received a Notice of Assessment from the tax authorities with respect to that return, and have either received their tax refund or, more grudgingly, paid any balance of tax owing.
By the time summer arrives, nearly all Canadians have filed their income tax returns for the previous year, have received a Notice of Assessment from the tax authorities with respect to that return, and have either received their tax refund or, more grudgingly, paid any balance of tax owing.
It’s a surprise, therefore, when unexpected mail arrives from the Canada Revenue Agency (usually in mid- to late July), and the information in that mail will likely be both unfamiliar and unwelcome. Specifically, the enclosed Instalment Reminder form will advise the recipient that, in the view of the CRA, they should make instalment payments of income tax on September 15 and December 15 of 2024 – and will helpfully identify the amounts which should be paid on each date.
No one particularly likes receiving unexpected mail from the tax authorities, and correspondence which suggests that the recipient should be making payments of income tax for 2024 to the CRA during the year (instead of when they file the return for 2024 in April 2025) is likely to be both perplexing and somewhat alarming. It’s fair to say that most Canadians aren’t familiar with the payment of income tax by instalments, and are therefore at a loss to know how to proceed the first time they receive an Instalment Reminder.
The reason that the instalment payment system is unfamiliar to most Canadians is that most of us pay income taxes during our working lives through a different system. Every Canadian employee has tax automatically deducted from their paycheque (“at source”), before that paycheque is issued, and that tax is remitted by the employer to the CRA on the employee’s behalf. Such deductions and remittances accrue to the employee’s benefit, and they are credited with those remittances when filing the annual tax return for that year. It’s an efficient system, but it’s also one which is largely invisible to the employee, and certainly one which operates without the need for the employee to take any steps on their own.
Where an individual is no longer an employee – for instance, they start a business and become self-employed, or retire and begin to receive retirement income from various government and non-government sources – such deductions and remittances are no longer automatically made. However, Canadian tax rules provide that, where the amount of tax owed when a return is filed by the taxpayer is more than $3,000 ($1,800 for Québec residents) in the current (2024) year and either of the two previous (2022 and 2023) years, that taxpayer may be subject to the requirement to pay income tax by instalments.
The reason that first instalment reminders are issued in August has to do with the schedule on which Canadians file their tax returns. The amount of tax payable on filing for the immediately preceding year can’t be known until the tax return for that year has been filed and assessed, and the tax return filing deadline for individuals is April 30 (or June 15 for self-employed taxpayers and their spouses). Consequently, by the middle of July, the CRA will have the information needed to determine whether a particular taxpayer should receive a first instalment reminder for the current year.
Taxpayers who receive that first Instalment Reminder in July may also be puzzled by the fact that it is a “Reminder” and not a “Requirement” to pay. The reason for that is that those who receive it are not actually required by law to make instalment payments of tax. There are, in fact, three options open to the taxpayer who receives an Instalment Reminder.
First, the taxpayer can pay the amounts specified on the Reminder, by the respective due dates of September 15 and December 15. A taxpayer who does so can be certain that they will not have to pay any interest or penalty charges even if they have to pay an additional amount on filing in the spring of 2024. If the instalments paid turn out to be more than the taxpayer’s tax liability for 2024, they will of course receive a refund on filing.
Second, the taxpayer can make instalment payments based on the total amount of tax which was owed and paid for the 2023 tax year (including any balance that was owed on filing). If a taxpayer’s income has not changed between 2023 and 2024 and their available deductions and credits remain the same, the likelihood is that total tax liability for 2024 will be slightly less than it was in 2023, owing to the indexation of tax brackets and tax credit amounts.
Third, the taxpayer can estimate the amount of tax which they will actually owe for 2024 and can pay instalments based on that estimate. Where a taxpayer’s income has dropped from 2023 to 2024 and there will consequently be a reduction in tax payable, this option may be worth considering. Taxpayers who wish to pursue this approach can obtain the information needed to estimate current year taxes (federal and provincial tax brackets and rates) 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#federal.
All of this may seem like a lot of research and calculation effort, especially when one considers that many Canadians don’t even prepare their own tax returns. And those who don’t want to be bothered with the intricacies of tax calculations can pay the amounts set out in the Instalment Reminder, secure in the knowledge that they will not incur any penalty or interest charges and that, should those amounts ultimately represent an overpayment of taxes, that overpayment will be recovered and refunded when the return for 2024 is filed next spring.
Once they have resigned themselves to the realities of the tax instalment system, the next question that most taxpayers have is how such payments can be made. The options open to taxpayers in that regard, as well as general information on the tax instalment system, are outlined on the Canada Revenue Agency website at Required tax instalments for individuals - Payments for individuals - Canada.ca.
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.
By this time of the year, virtually all Canadian residents have filed their income tax return for 2023 and have received the Notice of Assessment issued by the Canada Revenue Agency (CRA) with respect to that tax filing. Most taxpayers, therefore, would consider that their annual filing and payment obligations are done and behind them for another year.
By this time of the year, virtually all Canadian residents have filed their income tax return for 2023 and have received the Notice of Assessment issued by the Canada Revenue Agency (CRA) with respect to that tax filing. Most taxpayers, therefore, would consider that their annual filing and payment obligations are done and behind them for another year.
It can, therefore, be a little surprising to receive a communication from the CRA in mid-summer and more than a little unsettling to find out that the Agency has some further questions about the tax return that the taxpayer thought was already completed. Notwithstanding, that’s an experience that millions of taxpayers will have over the next few weeks and months.
Between February 5 and June 24 of this year, the Canada Revenue Agency received and processed more than 30 million individual income tax returns filed for the 2023 tax year, and issued a Notice of Assessment in respect of each one of those returns. The sheer volume of returns and the processing turnaround timelines mean that the CRA does not (and could not possibly) do a manual review of the information provided in a return prior to issuing the Notice of Assessment. Rather, returns are scanned by the Agency’s computer system and a Notice of Assessment is then issued.
In addition, the CRA has, for many years, been successful in encouraging taxpayers to fulfill their filing obligations online, through one of the Agency’s electronic filing services. This year, just under 29 million (or 93%) of individual returns for 2023 were filed by electronic means. While e-filing means that the turnaround for processing of returns is much quicker, there is, by definition, no paper involved.
The Canadian tax system has always been what is termed a “self-assessing” system, in which taxpayers report income earned and claim deductions and credits to which they believe they are entitled. Prior to the advent of e-filing there were means by which the CRA could easily verify claims made by taxpayers. Where returns were paper-filed, taxpayers were usually required to include receipts or other documentation to prove their claims, whatever those claims were for. For the 93% of returns which were filed this year by electronic means, no such paper trail exists. Consequently, the potential exists for misrepresentation of such claims (or simple reporting errors) on a large scale.
The CRA’s response to that risk is to conduct a wide range of review programs, some of them carried out before a Notice of Assessment is issued for the taxpayer’s return, and others after that Notice of Assessment has been issued and sent to the taxpayer. Regardless of the timing, in all cases the purpose of the review is to obtain from the taxpayer the information or documentation needed to support claims for deductions or credits made by the taxpayer on the return. The CRA also administers a Matching Program, in which information reported on the taxpayer’s return (both income and deductions) is compared to information provided to the CRA by third-party sources (like T4s filed by employers or T5s filed by banks or other financial institutions).
Being selected for review under either program means, for the individual taxpayer, the possibility of receiving unexpected correspondence, or a telephone call, from the CRA. Receiving such correspondence or such a call from the tax authorities is almost guaranteed to unsettle the recipient taxpayer, who may immediately conclude that he or she has done something very wrong and is facing a big tax bill. However, in the vast majority of cases, the contact is just a routine part of the Agency’s processing review mandate.
Where the initial contact from the CRA to the taxpayer is done by telephone, it’s important that the taxpayer verify the identity of the person claiming to be a representative of the Agency. As virtually everyone knows by now, fraudulent or “scam” calls purporting to be from the CRA have become commonplace. To assist taxpayers in confirming that any telephone contact received is a legitimate one, the CRA has provided information on how to respond to such a call; that information can be found on the CRA website at Verify it's the CRA calling - Scams and fraud - CRA - Canada.ca.
A taxpayer whose return is selected as part of a processing review program will be asked to provide verification or proof of deductions or credits claimed on the return –usually by way of receipts or similar documentation. Or, where figures which appear on an information slip – for instance, the amount of interest income earned – don’t match up with the amount of such interest income reported by the taxpayer, they will be contacted to provide an explanation of the discrepancy.
Of course, most taxpayers are not concerned so much with the kind of program or programs under which they are contacted as they are with why their return was singled out for review or follow-up. Many taxpayers assume that it’s because there is something wrong on their return, or that the letter is the start of a tax audit process, but that’s not necessarily the case. Returns are selected by the CRA for pre- or post-assessment review for a number of reasons. Canada’s tax laws are complex and, over the years, there are areas in which the CRA has determined that taxpayers are more likely to make errors on their return. Consequently, a return which includes claims in those areas (like dependant tax credit claims, or claims for medical expenses, moving expenses, or tuition tax credits) may have an increased chance of being reviewed. Where there are deductions or credits claimed by the taxpayer which are significantly different or greater than those claimed in previous returns, that could flag the return for review. And, if the taxpayer’s return has been reviewed in previous years, and especially if an adjustment was made following that review, subsequent reviews may be more likely. Finally, many returns are picked for the processing review programs simply on the basis of random selection.
Regardless of the reason for the follow-up, the process is the same. Taxpayers whose returns are selected for review will be contacted by the CRA, usually by letter, identifying the deduction or credit for which the CRA wants documentation or the income or deduction amount about which a discrepancy seems to exist. The taxpayer will be given a reasonable period of time – usually a few weeks from the date of the letter – in which to respond to the CRA’s request. That response should be in writing, attaching, if needed, the receipts or other documentation which the CRA has requested. All correspondence from the CRA under its review programs will include a reference number, which is usually found in the top right-hand corner of the CRA’s letter. That number is the means by which the CRA tracks the particular inquiry, and should be included in the response sent to the Agency. It’s important to remember, as well, that it’s the taxpayer’s responsibility to provide proof, where requested, of any claims made on a return. Where a taxpayer does not respond to a CRA request or does not provide such proof, the Agency will proceed on the basis that the requested verification or proof does not exist and will assess or reassess accordingly.
Taxpayers who have registered for the CRA’s online tax program My Account (or whose representative is similarly registered for the Agency’s Represent a Client online service) can usually submit required documentation electronically. More information on how to do so can be found on the CRA website at Submitting documents online – Pre-assessment Review, Processing Review and Request Verification Programs - Canada.ca.
Whatever the reason a particular return was selected for review by the CRA, one thing is certain: a prompt response to the CRA’s enquiry, providing the Agency with the information or documentation requested, will, in the vast majority of cases, bring the matter to a speedy conclusion, to the satisfaction of both the Agency and the taxpayer. The CRA website also includes more detailed information on the return review process, which is available at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/review-your-tax-return-cra.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.
Most Canadians, understandably, think of our income tax system as a government “program” that takes money out of their paycheques and out of their pockets. And, while it’s certainly true that virtually every Canadian who earns an income must allocate a portion of that income to paying federal and provincial personal income taxes, that’s not the whole picture. Our tax system does, in fact, provide Canadians with a number of direct benefits, through a variety of tax credit and benefit programs which actually put money into the hands of Canadians. And when that money can be obtained with minimal effort (and be received tax-free) it’s a win-win for the recipient.
Most Canadians, understandably, think of our income tax system as a government “program” that takes money out of their paycheques and out of their pockets. And, while it’s certainly true that virtually every Canadian who earns an income must allocate a portion of that income to paying federal and provincial personal income taxes, that’s not the whole picture. Our tax system does, in fact, provide Canadians with a number of direct benefits, through a variety of tax credit and benefit programs which actually put money into the hands of Canadians. And when that money can be obtained with minimal effort (and be received tax-free) it’s a win-win for the recipient.
Those attributes describe the basic child and family benefits paid by the federal government to eligible Canadians every month of the year. However, a substantial number of eligible recipients don’t receive benefits to which they are entitled, simply because they haven’t claimed them, leaving potentially hundreds or thousands of dollars in tax-free income “on the table” each year. As well, many Canadians who do receive such benefits but who then fail to claim them annually can see their benefit payments stop, even though they remain eligible to receive those benefits.
While there are quite a number of such benefits, the process of “claiming” each of them is the same – simply filing a tax return each year. Eligibility for some (but not all) of the obtainable benefits and/or the amount of benefit obtainable is based, in part, on the income of the recipient. When each Canadian files a tax return, the Canada Revenue Agency determines, based on the information provided in that return, the benefits to which the taxpayer is entitled and in what amounts. Where the amount of a taxpayer’s income is relevant to the determination of eligibility, the income figure used is that from the previous year. In other words, a taxpayer’s eligibility for benefits during the 2024-25 benefit year is based on their income for 2023. And that information was provided to the Canada Revenue Agency on the tax returns for 2023 which were filed by taxpayers earlier this year.
Once the CRA receives the needed income information (usually by April 30, 2024) and determines a taxpayer’s benefit eligibility, those benefits are paid to eligible recipients throughout the 2024-25 benefit year, which starts on July 1, 2024 and ends on June 30, 2025.
It should be noted, as well, that while the federal government refers to these benefits under the umbrella term “child and family benefits”, it’s wrong to conclude that benefits are only available to parents and/or married individuals. Of the four benefit programs outlined below which will be in place during the upcoming benefit year, only the Canada Child Benefit program requires that a taxpayer be a parent, and none of the benefit programs require that a taxpayer be married or in a common-law relationship.
GST/HST Credit
The GST/HST credit is a non-taxable amount paid four times a year (on the 5th of July, October, January, and April) to lower and middle-income individuals and families, to help offset the goods and services tax/harmonized sales tax (GST/HST) that they pay. Generally, the credit is available to Canadian residents who meet any one of the following criteria:
- aged 19 yearsof age or older;
- have or had a spouse or common law partner; or
- are or were a parent and live (or lived) with their child.
The amount of benefit which may be received is determined by both family size and income level. For the upcoming (July 2024 to June 2025) benefit year, the maximum annual GST/HST benefit is as follows:
- $519 if you are single;
- $680 if you are married or have a common-law partner; and
- $179 for each child under the age of 19.
The CRA website includes a chart showing the amount of GST/HST benefit which is provided at different income levels, to individuals and to families of different sizes and compositions. That chart can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/goods-services-tax-harmonized-sales-tax-gst-hst-credit/goods-services-tax-harmonised-sales-tax-credit-payments-chart.html.
Eligibility for the GST/HST credit for the 2024-25 benefit year is determined automatically by the CRA for each taxpayer who filed a return for 2023. There is, therefore, no need to indicate on the return that the taxpayer is applying for the GST/HST credit.
Canada Carbon Rebate
Unlike the other three credits which are based, at least in part, on household income, the Canada Carbon Rebate, or CCR (formerly known as the Climate Action Incentive Payment), is a flat rate, non-taxable credit paid to eligible residents living in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan. The purpose of the CCR is to help offset the financial impact of the federal carbon tax, with the amount of the annual benefit determined by the taxpayer’s province of residence and family composition. An online tool allowing taxpayers to estimate the amount of CCR they may receive can be found on the CRA website at How much you can get - Canada Carbon Rebate (CCR) for individuals - Canada.ca.
In addition to living in one of these provinces, recipients must also satisfy the same eligibility criteria as for the GST/HST credit, in that they must be Canadian residents who are at least 19 years of age, or have or had a spouse or common-law partner, or are or were a parent and lives or lived with their child.
The CCR (for all provinces) includes a rural supplement of the base amount for residents of small and rural communities. That supplement, which was set at 10% of the base amount in previous years, has been increased to 20% for the 2024-25 benefit year. While there is no need to apply for the CCR when filing a tax return, individuals who believe they are eligible for the rural supplement need to ensure that they tick the applicable box on page 2 of the return to indicate their eligibility. That requirement does not apply to residents of Prince Edward Island, where all CCR recipients are eligible for the rural supplement.
The CCR is paid in quarterly instalments, meaning that during the 2024-25 benefit year, payments will be made to eligible Canadians on the 15th day of April, July, October, and January.
More information on the CCR can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/cai-payment.html.
Canada Workers Benefit
The Canada Workers Benefit (CWB) is a refundable tax credit paid to lower-income Canadian residents who are aged 19 or older or are married or have a common-law spouse or a child with whom they live, and who have “working income” earned from employment or self-employment.
The amount of CWB which an individual or family can receive depends on marital status and net income. The basic amounts payable, and the net income levels at which eligibility for that basic benefit is eroded, are as follows.
- $1,518 for single individuals
The single individual benefit is reduced if adjusted net income is more than $24,975. No basic amount is payable if the applicant’s adjusted net income is more than $35,095. - $2,616 for families
The family benefit amount is reduced if adjusted family net income is more than $28,494. No basic amount is payable where adjusted family net income is more than $45,934.
In order to apply for the CWB, a recipient must file their tax return electronically and follow the software instructions for applying or, if filing a paper return, must complete and file a Schedule 6 with that tax return.
More detailed information on the CWB can be found at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-workers-benefit.html.
Canada Child Benefit
The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. The CCB is paid to the parent who is primarily responsible for the care and upbringing of the child or children, and the amount varies with the age and number of children.
The CCB is also a means-tested benefit, with the benefit amount being reduced as family net income increases. CCB amounts paid during the 2024-25 benefit year are based on family net income for 2023.
The maximum amounts payable for the benefit year running from July 2024 to June 2025 are as follows.
For each child:
- under 6 years of age: $7,787 per year ($648.91 per month)
- 6 to 17 years of age: $6,570 per year ($547.50 per month)
Where family net income for 2023 is less than $36,502, recipients will receive the maximum amount outlined above for 2024-25, with no reductions.
Individuals and families who may be eligible for the CCB will have their eligibility automatically assessed when they file their tax return for 2023: there is no requirement to file a particular schedule or other application. More information on the CCB is available on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html.
While the number and variety of federal child and family benefits and the varying eligibility criteria for each can be confusing, the necessary determinations and calculations are done by the federal government. The only step which need be taken by an individual is the filing of an annual tax return. Taxpayers who wish to find information on the benefits for which they may be eligible can refer to the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits.html, where detailed information on each such benefit, the eligibility criteria, and amounts which may be received are summarized.
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.
The Canadian tax system is a “self-assessing” one, in which taxpayers are expected (and, in most cases, required) to file an individual income tax return each spring. On that return the taxpayer provides a summary of income earned during the previous calendar year and claims available deductions and credits. Those calculations determine the amount of tax owed for the year and any amount owed must then, of course, be paid on or before April 30.
The Canadian tax system is a “self-assessing” one, in which taxpayers are expected (and, in most cases, required) to file an individual income tax return each spring. On that return the taxpayer provides a summary of income earned during the previous calendar year and claims available deductions and credits. Those calculations determine the amount of tax owed for the year and any amount owed must then, of course, be paid on or before April 30.
Although the percentage of taxpayers who are required to file a return but do not do so is relatively small, a percentage as low as 1% of non-filers in a population of 40 million can still amount to nearly 400,000 required returns not filed. There are a number of reasons why taxpayers don’t file a return – sometimes it’s just procrastination, or a lack of knowledge of how and when to get the return filed. In other cases, taxpayers don’t believe that they are required to file a return – for instance, where they have little or no income for the year.
However, in the majority of instances in which taxpayers don’t file a return, it’s likely because taxes are owed and they are unable to pay those taxes on time or in full – or at all. In such situations, it’s tempting to conclude that it’s better not to file in the hope, perhaps, that the CRA will overlook or somehow not notice the delinquency. That’s not, however, a realistic conclusion. Where a Canadian resident earns income, the payor of that income must file an income slip (T4 for employment income, T5 for interest income, etc.) with the Canada Revenue Agency, on which the recipient of that income is identified by name, address, and social insurance number. Where those slips don’t match up with income reported on a return for the year by the taxpayer, the omission will probably come to light.
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, the Canada Revenue Agency instituted a program – the Voluntary Disclosures Program (VDP) – intended to encourage non-compliant taxpayers to come forward and put their tax affairs in order. The incentive to do so arises from the fact that in most cases, while taxpayers who participate in the VDP program have to pay outstanding tax amounts owed, plus some interest, they can avoid both other interest charges, some penalties which would normally be imposed, and the risk of criminal prosecution.
To qualify for such 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 CRA initiates any enforcement action related to the information to be disclosed);
- be complete (that is, includes all relevant information and documentation);
- involve the application or potential application of a penalty;
- include information that is at least one year or one reporting period past due; and
- include payment of the estimated tax owing (taxpayers who are unable to do so can request a payment arrangement).
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 Canada Revenue Agency will ultimately make the 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 taxpayers intentionally avoided their tax obligations (as distinct from inadvertence), or there is conduct on the part of the taxpayer which amounts to gross negligence. 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;
- the sophistication of the taxpayer;
- how quickly the taxpayer acted to correct their non-compliance after becoming aware of it;
- whether the disclosure was made after the taxpayer became aware of the CRA’s intended specific focus on that particular area of taxpayer compliance; 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 be required to pay outstanding tax balances owed, plus interest, and will be subject to penalties. They will not, however, be subject to criminal prosecution and will be exempted from the more stringent penalties which usually apply in cases of gross negligence on the part of the taxpayer.
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. For example, a taxpayer who makes an application to the VDP and who has failed to file returns for the 2017 through 2022 taxation years may be provided with interest relief with respect to tax arrears owed for the 2017, 2018, and 2019 taxation years. Such relief is generally equal to 50% of interest normally 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 (2020, 2021, and 2022) taxation years. Since interest charges levied by the CRA are, by law, higher than current commercial rates (for instance, the rate levied for July, August, and September of 2024 is 9%) 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 meets all the criteria required for a valid application, and that all of the required information, documentation, and payment have been sent. The next step is for the CRA 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.
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 Agency is one with which the taxpayer does not agree, they are entitled to ask for a second review of the application. It is also possible for a taxpayer to ask the Federal Court to review the decision and to direct the CRA to re-consider the VDP application. However, a taxpayer who wishes to pursue their application to the extent of filing such a Federal 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’s expectations are that taxpayers who have benefitted from the VDP will thereafter meet their tax obligations, and a second review will be provided for the same taxpayer only in situations where the second application relates to a different matter than the first, and where the circumstances giving rise to the second application were beyond the taxpayer’s control.
Detailed information on the VDP 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. Additional details with respect to the Program are also outlined in the CRA’s Information Circular IC00-1R6 – Voluntary Disclosures Program, which is available on the same website at IC00-1R6 - Voluntary Disclosures Program - Canada.ca.
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.
As the school year draws to a close, the thoughts of millions of Canadian parents turn to the question of how to find – and pay for – child care throughout the summer months. While many Canadians are still able to work from home for some portion of the work week, few (if any) have the kind of work arrangement which allows them to dispense entirely with child care arrangements during the summer months.
As the school year draws to a close, the thoughts of millions of Canadian parents turn to the question of how to find – and pay for – child care throughout the summer months. While many Canadians are still able to work from home for some portion of the work week, few (if any) have the kind of work arrangement which allows them to dispense entirely with child care arrangements during the summer months.
Parents needing to arrange such care don’t lack for options. There is an almost limitless number of choices, but what each of those choices has in common is a price tag – sometimes a steep one. Some options, like playground supervisors or day camps provided by the local recreation authority or municipality, can be relatively inexpensive, while the cost of others, like residential camps that provide room, board, and a range of sports and arts activities can run to thousands of dollars per week.
The good news for families which incur such expenditures is that in many cases a deduction for part or all of the costs incurred can be claimed on the tax return for the year. And, since eligible expenditures can be deducted from income on a dollar-for-dollar basis, that means that income used to pay eligible child care expenses is income which is not taxed. That tax savings is obtained by claiming the Child Care Expense Deduction, which is not specific to summer child care or summer camp costs, but is available for qualifying child care expenses incurred at any time during the year. As well, the rule determining whether child care costs incurred are deductible is fairly straightforward – parents who incur eligible child care costs in order to work (whether in employment or self-employment), or in some cases to attend school, can deduct those costs from income, within specified limits.
The amount of any available child care deduction is calculated on Form T778, and that calculation can seem forbiddingly complex. However, at the end of the day, the amount of child care expenses which can be deducted is simply the least of three figures, and only one of those figures requires a calculation. The steps involved in determining the amount of available child care expense deduction are as follows.
First, the amount of any deduction for child care expenses is limited to two-thirds of the taxpayer’s net income for the year. The income figure used to calculate the two-thirds figure is, generally, the amount shown on Line 23600 of the annual tax return. Where the family incurring child care expenses is a two-income family, it is the spouse with the lower net income who must make the claim and consequently it is their net income which is used to provide that two-thirds of income figure.
The second figure to be determined is the amount actually paid for eligible child care costs during the year. While virtually any licenced child care arrangement will qualify for purposes of the deduction, some more informal arrangements may not. Specifically, no deduction is available for amounts paid to most family members to provide child care. Consequently, it’s not possible for a working spouse to pay the stay-at-home parent to provide child care, nor is it possible to pay an older sibling who is under the age of 18 to provide such services, and to claim a deduction for those expenses incurred. As well, where a claim is made for a deduction for child care expenses on the annual return, the claimant must obtain (and be prepared to provide to the tax authorities) the social insurance number of the individual providing the care as well as a receipt showing the amounts paid, whether to an individual or an organization.
The third figure to be determined is the one which requires some calculation. Basically, the rules governing the deduction of child care expense impose a maximum deduction per child per year (referred to as the “basic limit”), with that basic limit dependent on the age and health of the particular child. As well, where expenses are incurred for overnight camps or boarding schools, the amount deductible for such costs is similarly capped.
For 2024, the following overall limits apply:
- $5,000 in costs per year for a child who was born in 2008 to 2017;
- $8,000 in costs per year for a child who was born after 2017;
- $11,000 in costs per year for a child who was born in 2024 or earlier, but for whom the disability amount can be claimed.
Similar restrictions are placed on the amount of costs which can be deducted for overnight camp or boarding school fees, and those are as follows:
- $125 per week for a child who was born in 2008 to 2017;
- $200 per week for a child who was born after 2017; and
- $275 per week for a child who was born in 2024 or earlier, but for whom the disability amount can be claimed.
Taking all of these figures into account, the computation of a deduction for summer day camp expenses for a typical Canadian family would look like this.
A two-income family has two children and both parents are employed. One spouse earns $70,000 per year, while the other earns $55,000. In 2023, one child is age 9 and the other is age 5. Neither child is disabled. During July and August, both of the children attend a local full-day summer camp, for which the cost is $400 per week per child.
- The first step is to determine the two-thirds of income figure. Since it is the lower-income spouse who must make the deduction claim, that figure is two-thirds of $55,000, or $36,663. Consequently, any deduction for child care expenses for the year cannot exceed $36,663.
- The second calculation is the total amount of child care expenses paid for each child:
$400 per week for eight weeks of summer camp, or $3,200.
Total child care expenses for each child are therefore $3,200. - The last step is to determine the basic limit for child care expenses for each child, as follows:
- the basic limit for the 5-year-old (who was born after 2017) is $8,000, and so the entire $3,200 in summer day camp costs incurred can be deducted.
- the basic limit for the 9-year-old (who was born between 2008 and 2017) is $5,000, and so once again the entire $3,200 incurred for summer day camp costs can be deducted.
As well, since the camp is a day camp, the dollar amount cost limitations which apply with respect to overnight camps do not apply to limit the amount of expenses claimed by the family.
The total deduction available for child care expenses incurred for the 2024 tax year will therefore be $6,400. That deduction is claimed on Line 21400 of the tax return filed by the lower-income spouse for the year, reducing their taxable income from $55,000 to $48,600, and resulting in a federal tax savings of about $960. A similar tax deduction is claimed as well for provincial tax purposes; the amount of provincial tax saved will depend on the tax rates imposed by the province in which the family lives.
When parents are choosing summer activities/care for their children, that decision involves a number of factors, including the child’s interests and abilities, the availability of programs which match those interests and abilities, the work schedules of one or both parents, and, of course, the cost of the program or activity. While the availability of a “subsidy” through the tax system should never be the sole determinant of what activity or camp is the best choice, there’s no denying that being able to claim a deduction for the costs involved can tip the balance toward one or choice or another, or can bring a formerly unavailable option within a family’s financial reach.
Parents wishing to find out more about the child care expense deduction, and perhaps to calculate the maximum deduction which will be available to them for the 2024 tax year, should consult Form T778 E (23). The form which is currently on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t778.html is from the 2023 tax year, and consequently the age limits must be adjusted by one year for child care expense claims for 2024. (The actual form for 2024 will be posted on the CRA website early in 2025). The currently available form does, however, provide a detailed explanation of the rules governing the child care expense deduction, and those rules (as well as the applicable dollar limits, which are not indexed to inflation) will continue to apply for the 2024 tax 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.
Each spring and summer, tens of thousands of Canadian families sell their homes and move – sometimes to a bigger and better property in the same town or city, and sometimes to a new city or even another province. At the same time, university students make the annual move from their university residences or apartments back to the family home for the summer. 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 involved 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.
Each spring and summer, tens of thousands of Canadian families sell their homes and move – sometimes to a bigger and better property in the same town or city, and sometimes to a new city or even another province. At the same time, university students make the annual move from their university residences or apartments back to the family home for the summer. 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 involved 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 the refer to the “moving expense deduction” as though it were available to all taxpayers in all circumstances, the fact is that there is actually no universally available deduction claimable for moving costs – in order to be tax deductible, such moving costs must meet specific criteria. Our tax system allows taxpayers to claim a deduction only where the move is made to get the taxpayer closer to their new place of work, whether that work is a transfer within the same company, a change in employers, or moving to run a business at a new location. Specifically, moving expenses can be deducted where the move is made to bring the taxpayer at least 40 kilometres closer to their new place of work. That requirement is satisfied where, for instance, a taxpayer moves from Toronto to Calgary to take that new job. It’s also met where a taxpayer is transferred by their employer to another job in a different location and the taxpayer’s move will bring them 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.
As well, it’s not 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 incurred where the overriding 40-kilometre requirement is met.
It's important to remember, however, that even where the 40-kilometre requirement is met, moving costs can be deducted only from income earned from employment or self-employment (business) – such costs cannot be deducted 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 themself, family members, and household effects. In all cases, the moving expenses can only 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’s 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”).
- Travel expenses, including vehicle expenses, meals, and accommodation, to move the taxpayer and members of their household 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 their 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 (not including insurance), and costs related to utility hook-ups and disconnections.
At some times and in some places, houses sell almost as soon as they are put on the market, while at other times or in other places it can take weeks or even months to find a buyer. When the latter is the case, the homeowner might have to move to start that new job before the “old” house has sold. In those circumstances, the taxpayer is entitled to deduct up to $5,000 in costs incurred for the maintenance of the old residence while it is vacant and on the market. Specifically, costs including interest, property taxes, insurance premiums, and heat and utilities expenses paid to maintain the old residence while it is vacant and efforts are 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.
It may seem from the forgoing 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 (for example, 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;
- 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 a seemingly endless number of details to be dealt with. For some types of costs, the administrative burden of keeping track of (and retaining receipts for) such moving-related expenses can be minimized by choosing instead to claim a standardized amount. 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 $23 per meal, to a maximum of $69 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; that per kilometre amount ranges from 53.0 cents for Alberta to 70.5 cents for the Yukon. 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 2023 taxation year – the CRA will be posting the rates for 2024 on its website early in 2025, 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 T1-M Moving Expenses Deduction - Canada.ca, and more information (including a link to rates for standardized meal and travel cost claims) is available at Line 21900 – Moving expenses - Canada.ca.
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.
Many (if not most) taxpayers think of tax planning as a year-end exercise, one to be carried out in the last few weeks of the year, in order to take the steps needed to minimize the tax bill for that year. And it’s true that almost all strategies needed to both minimize the tax hit for the current year and to ensure that there won’t be a big tax bill come next April must be put in place by December 31 (the making of registered retirement savings plan (RRSP) contributions being the notable exception). Nonetheless, there’s a lot to recommend carrying out a mid-year review of one’s tax situation for the current year. Doing that review mid-year, instead of waiting until December, gives the taxpayer the chance to make sure that everything is on track and, especially, to put into place any adjustments needed to help ensure that there are no unpleasant tax surprises when the return for 2024 is filed next spring. And, while the deadline for implementing most tax saving strategies may be December 31, it’s also the case that opportunities to make a significant difference to one’s current-year tax situation diminish as the calendar year progresses.
Many (if not most) taxpayers think of tax planning as a year-end exercise, one to be carried out in the last few weeks of the year, in order to take the steps needed to minimize the tax bill for that year. And it’s true that almost all strategies needed to both minimize the tax hit for the current year and to ensure that there won’t be a big tax bill come next April must be put in place by December 31 (the making of registered retirement savings plan (RRSP) contributions being the notable exception). Nonetheless, there’s a lot to recommend carrying out a mid-year review of one’s tax situation for the current year. Doing that review mid-year, instead of waiting until December, gives the taxpayer the chance to make sure that everything is on track and, especially, to put into place any adjustments needed to help ensure that there are no unpleasant tax surprises when the return for 2024 is filed next spring. And, while the deadline for implementing most tax saving strategies may be December 31, it’s also the case that opportunities to make a significant difference to one’s current-year tax situation diminish as the calendar year progresses.
Mid-year is also a good time to check up on current year taxes because nearly all of the information needed to do so is readily available to the taxpayer. By the beginning of June, most Canadians have filed their individual income tax return for the 2023 tax year and received a Notice of Assessment outlining their tax position for that year. Those who receive a refund will celebrate that fact or, less happily, those who receive a tax bill will pay up the amount owed. And, although the taxpayer’s reaction to one or the other of these outcomes will be very different, the fact is that a large tax bill owing or a large tax refund arise from the same cause – and that is that the amount of tax paid throughout the year was incorrect. While most taxpayers are delighted to receive a tax refund (often viewing it, incorrectly, as “free” money from the government), the fact is that a large refund means that the taxpayer has overpaid their taxes for the previous year and has essentially provided the Canada Revenue Agency with an interest-free loan of funds that could have been put to better use in the taxpayer’s hands. The other outcome – a large bill – means that taxes have been underpaid for the previous year and that could mean paying interest charges to the CRA. Either way, it’s in the taxpayer’s best interests to ensure that tax paid throughout the year is sufficient to cover their taxes, without overpaying or underpaying. The best-case scenario, from a tax and personal finance perspective, is to file a tax return and receive a Notice of Assessment which indicates that there is neither a substantial refund payable nor any significant amount owing.
For most Canadians, income and available deductions and credits don’t vary significantly from one year to the next. Where that’s the case, the amount of tax owed by the taxpayer for 2023 (a figure that can be found on Line 43500 of the Notice of Assessment) is likely to be very close to one’s tax liability for 2024.
After finding out how much tax was paid for 2023, the next step in doing a review is to get a sense of how much income tax has already been paid for the 2024 tax year. There are two ways of paying income taxes throughout the year. The majority of Canadians (including all employees) have income taxes deducted from their paycheques and remitted to the federal government on their behalf – a process known as source deductions. Taxpayers who do not have income tax deducted at source – which would include self-employed individuals and, frequently, retired taxpayers – make tax payments directly to the federal government (four times a year, in March, June, September, and December) through the tax instalment system.
Using the tax payable figure for 2023 as a guide, it’s necessary to figure out whether income tax payments made to date, either through deductions made from the taxpayer’s paycheque, or through instalment payments of tax, match up with that tax liability figure, recognizing that by this point in the year, approximately one-half of taxes for 2024 should already have been paid. If they haven’t, and particularly if there is a significant shortfall which would mean a large balance owing when the tax return for 2024 is filed next spring, the taxpayer will need to take steps to remedy that.
Where the individual involved pays tax by instalments, the solution is simple. They can simply increase or decrease the amount of remaining instalment payments made in 2024 so that the total instalment payments made over the course of this year accurately reflect the total tax payable for the year. The only caveat in that situation is that the individual should err on the side of caution to ensure that there isn’t a shortfall in instalment payments, which could result in interest charges being levied by the CRA.
The situation is a little more complex for employees, or anyone who has tax deducted at source. Often when such individuals discover that they are overpaying taxes through source deductions, it’s because deductions which they claim on their return for the year – for expenditures like deductible support payments, child care expenses, or contributions to a registered retirement savings plan (RRSP) or first home savings account (FHSA) – aren’t taken into account in calculating the amount of tax to deduct at source. The solution for employees who find themselves in that situation is to file a FormT1213 – Request to Reduce Tax Deductions at Source with the CRA. That form is available on the CRA website at T1213 Request to Reduce Tax Deductions at Source - Canada.ca. On the T1213, the taxpayer identifies the amounts which will be deducted on the return for the year and, once the CRA verifies that those deductible expenditures (like child care expense costs or RRSP contributions) are being made, it will authorize the taxpayer’s employer to reduce the amount of tax which is being withheld at source to take account of that deduction.
Where it’s the opposite situation and a taxpayer finds that source deductions being made will not be sufficient to cover their tax liability for the year (meaning a tax bill to be paid next spring), the solution is to have those source deductions increased. No one likes paying more taxes, but where taxes are owed, the only choice involved is to pay them now or pay them later. Spreading out that payment over the rest of the tax year is much less painful than being hit with a large tax bill (as well as interest charges when that tax bill can’t be paid in full and on time) when the return for the year is filed next spring.
Take, for example, an employee who found out, after filing the return for 2023, that an additional $2,000 in taxes was owed. Assuming that their income and the amount of tax deducted from their paycheque doesn’t change, it’s likely that a similar amount will be owed when the return for 2024 is filed. If that taxpayer is paid biweekly, there will be about 13 paycheques between the end of June and the end of the year. Increasing the amount of tax deducted from those paycheques by about $75 per paycheque will mean that the $2,000 in taxes owing is paid to the Canada Revenue Agency by the end of the year – thereby avoiding a large tax bill when the return for 2024 is filed in the spring of 2025.
To increase the amount of tax deducted from their paycheque, the employee needs to obtain a TD1A form for their province of residence for 2024. That form can be found on the CRA 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. On the reverse side of that Form TD1, there is a section entitled “Additional tax to be deducted”, in which the employee can direct their employer to deduct additional amounts at source for income tax, and can specify the dollar amount which is to be deducted from each paycheque on a go-forward basis.
No one particularly likes thinking about taxes, at any time of year, but ignoring the issue definitely won’t make it go away. The investment of a few hours of time now, and putting in place any needed adjustments, can mean avoiding a nasty surprise in the form of a large tax bill which must be paid when the return for 2024 is completed and filed next spring.
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 retired Canadians receive income from two government-sponsored retirement income programs – the Canada Pension Plan (CPP) and the Old Age Security (OAS) program. While benefits from both are paid to recipients by the federal government on a monthly basis, there are significant differences in how the two plans are funded, the amounts which can be received, and, most significantly for retirees, in how entitlement to benefits is determined each year.
Most retired Canadians receive income from two government-sponsored retirement income programs – the Canada Pension Plan (CPP) and the Old Age Security (OAS) program. While benefits from both are paid to recipients by the federal government on a monthly basis, there are significant differences in how the two plans are funded, the amounts which can be received, and, most significantly for retirees, in how entitlement to benefits is determined each year.
Canadians who participated in the paid work force during their adult life will have contributed to the Canada Pension Plan (contributions are mandatory, and are deducted from the individual’s paycheque and remitted to the federal government on their behalf) and will be able to receive CPP retirement benefits as early as age 60. The amount of monthly benefit received depends on the amount of contributions made by the benefit recipient made during their working life.
The Old Age Security program differs from the Canada Pension Plan in a number of ways. The OAS program is funded entirely from general government revenues, with no direct contribution made by individual Canadians. Entitlement to OAS is based solely on the number of years of Canadian residence, and individuals who were resident in Canada for 40 years after the age of 18 can receive full OAS benefits. As of the second quarter (April to June of 2024), the full OAS benefit for individuals under the age of 75 is $713.34 per month.
The OAS program is distinct from other sources of retirement income in another, less welcome, way, in that it is the only government retirement income program under which the federal government can require the recipient of benefits to repay those benefits, in whole or in part. That repayment requirement comes about through the OAS “Recovery Tax”, which is universally known as the OAS “clawback”.
While the rules governing the administration of the clawback can be confusing, the concept is a (relatively) simple one. Anyone who received OAS benefits during 2023 and had income for that year of more than $86,912 must repay a portion of OAS benefits received. That repayment, or clawback, is administered by reducing the amount of OAS benefits which the individual receives during the following benefit year, which runs from July 1, 2024 to June 30, 2025.
For example, an individual who receives full OAS during 2023 and has net income for the year of $96,000 will be subject to the clawback. They must repay OAS amounts received at a rate of 15 cents (or 15%) of every dollar of income over the clawback income threshold, as in the following simplified example.
The OAS clawback threshold for 2023 is $86,912.
If your income in 2023 was $96,000, then your repayment would be 15% of the difference between $96,000 and $86,912:
$96,000 - $86,912 = $9,088
$9,088 x 0.15 = $1,363.20
You would have to repay $1,363.20 ($113.60 per month) for the July 2024 – June 2025 period.
The OAS clawback affects only individuals who have an annual income of at least $86,912 (for 2023), and it’s arguable that at such income levels, the clawback requirement does not impose any real financial hardship. Nonetheless, the OAS clawback is a perpetual irritant to those affected by it, perhaps because of the sense that they are being penalized for being disciplined savers, or good managers of their finances during their working years, in order to ensure a financially comfortable retirement.
While any sense of grievance can’t alter the reality of the OAS clawback, there are strategies which can be put in place to either minimize or, in some cases, entirely eliminate one’s exposure to that clawback. Some of those planning considerations are better addressed earlier in life, prior to retirement, However, it’s not too late, once one is already receiving OAS, to make arrangements to avoid or minimize the clawback.
In all cases, no matter what strategy is employed, the goal, as with much of individual tax planning, is to “smooth” one’s income from year to year, so that net income for each year comes in under the OAS clawback threshold and, not incidentally, minimizes exposure to the higher federal and provincial income tax rates which apply once taxable income exceeds $100,000.
The starting point, for taxpayers who are approaching retirement, is to determine how much income will be received from all sources during retirement, based on CPP and OAS entitlement, any savings accrued through an RRSP, and any amounts which may be received from a private pension plan.
Anyone who has an RRSP must begin receiving income from those RRSP funds in the year after that person turns 71. However, it’s possible to begin receiving income from an RRSP at any time. Similarly, an individual who is eligible for CPP retirement benefits can begin receiving those benefits anytime between age 60 and age 70, with the amount of monthly benefit receivable increasing with each month receipt is deferred. The same calculation applies to OAS benefits, which can be received as early as age 65 or deferred up until age 70.
Once the amount of annual income is determined, strategies to smooth out that income can be put in place. Those strategies can include receiving income from an RRSP prior to age 71, so as to reduce the total amount within the RRSP and so thereby reduce the likelihood of having a large “bump” in income when required withdrawals kick in at that time.
Taxpayers are sometimes understandably reluctant to take steps which they view as depleting their RRSP savings, but receiving income from an RRSP doesn’t necessarily mean spending that income. While tax has to be paid on any withdrawals (no matter what the taxpayer’s age), the after-tax amounts that aren’t currently needed as income can be contributed to the taxpayer’s tax-free savings account (TFSA), where they can be invested in the same manner as they were in the RRSP and can continue to compound free of current tax. And, when the taxpayer has need of those funds in retirement, they can be withdrawn free of tax and they won’t count as income for purposes of the OAS clawback – or for purposes of any other income-tested tax credit or benefit.
Taxpayers who are married can also “even out” their income by using pension income splitting, so that neither of them has sufficient income to be affected by the clawback. Using pension income splitting, the spouse who has income over the OAS clawback threshold re-allocates the “excess” income to their spouse on the annual return, and that income is then considered to be income of the recipient spouse, for purposes of both income tax and the OAS clawback. To be eligible for pension income splitting, the income to be reallocated must be private pension income, which is generally income from an RRSP or registered retirement income fund (RRIF), or from an employer-sponsored pension plan.
There are two reasons why pension income splitting is a particularly attractive strategy for avoiding or minimizing the OAS clawback. First, there is no need to actually change the source or amount of income received by each spouse, as the reallocation of income is “notional”, existing only on the return for the year. Second, no decision has to be made on pension income splitting until it’s time to file the return for the previous year, meaning that spouses can easily calculate exactly how much income has to be reallocated in order to avoid the clawback, and to reduce tax liability generally. More information on the kinds of income eligible for pension income splitting, and the mechanics of the process, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/pension-income-splitting.html.
Detailed information on the OAS clawback is available at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/repayment.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.
This year, the Canada Revenue Agency (CRA) will receive and process more than 30 million individual income tax returns for the 2023 tax year. No two of those returns will be identical, as each such return will have its own particular combination of amounts and sources of income reported, and deductions and credits claimed. There is, however, one thing which every one of those returns has in common: for each and every one, the CRA will review the return filed, determine whether it is in agreement with the information contained therein, and, finally, issue a Notice of Assessment (NOA) to the taxpayer summarizing the Agency’s conclusions with respect to the taxpayer’s tax situation for the 2023 tax year.
This year, the Canada Revenue Agency (CRA) will receive and process more than 30 million individual income tax returns for the 2023 tax year. No two of those returns will be identical, as each such return will have its own particular combination of amounts and sources of income reported, and deductions and credits claimed. There is, however, one thing which every one of those returns has in common: for each and every one, the CRA will review the return filed, determine whether it is in agreement with the information contained therein, and, finally, issue a Notice of Assessment (NOA) to the taxpayer summarizing the Agency’s conclusions with respect to the taxpayer’s tax situation for the 2023 tax year.
When all goes as it should, the information – and the tax result – outlined in the Notice of Assessment is the same as that provided by the taxpayer in their return. In a minority of cases, however, the information presented in the Notice of Assessment will differ from that provided by the taxpayer in the 2023 tax return. Where that difference means an unanticipated refund, or a refund larger than the one expected, it’s a good day for the taxpayer. In some cases, however, the Notice of Assessment will inform the taxpayer that additional amounts are owed to the CRA. When that happens, the taxpayer has to figure out why, and to decide whether or not to dispute the CRA’s conclusions.
Many such discrepancies are the result of an error made by the taxpayer in completing the return. A lot of information from a variety of sources is reported on even the most straightforward of returns and it’s easy to overlook some of that information. Especially where the taxpayer has multiple sources of income – for instance, where individuals are working in the gig economy they may work under a succession of contracts during the year, or have multiple sources of income at any given time – it can be easy to overlook one or more small amounts of income. Equally, newly retired individuals who are used to having only one source of income – their paycheques – may now be receiving Canada Pension Plan benefits, Old Age Security amounts, private pension income, and, possibly, withdrawals from a registered retirement savings plan or registered retirement income fund, making it difficult to keep track of everything.
As well, most Canadian taxpayers now use tax return preparation software to complete and file their returns. While using such software essentially eliminates the risk of arithmetical error, inputting errors can still occur.
Where there is additional tax owing because of an error or omission made by the taxpayer in completing the return, and the CRA’s figures are correct, disputing the assessment doesn’t really make sense. There is as well a persistent tax myth which says that if a taxpayer doesn’t receive an information slip (T4 or T5, as the case might be) for income received during the year, that income doesn’t have to be reported and therefore isn’t taxable. That is not the case, and never has been. All taxpayers are responsible for reporting all income received and paying tax on that income, and the fact that an information slip was lost, mislaid, or never received doesn’t change anything. The CRA receives a copy of all information slips issued to Canadian taxpayers, and its systems will cross-check to ensure that all income stated on those information slips is accurately reported in the tax return.
There are, however, instances in which the CRA and the taxpayer are in disagreement over substantive issues, and those issues most often involve claims for deductions or credits. For instance, the CRA may have disallowed an individual’s claim for a medical expense, or for a deduction claimed for a business expenditure, and the taxpayer believes in good faith that the credit or deduction claim is a legitimate one.
Whatever the nature of the dispute, the first step is always to contact the CRA for an explanation of the reasons why the change was made. While the information provided in the NOA is a good summary of the taxpayer’s tax situation for the year, it may not always be clear on precisely how and why the taxpayer and the Agency disagree on the actual amount of income tax which the taxpayer must pay for the year. The first step to be taken would be a call to the Individual Income Tax Enquiries line at 1-800-959-8281, where client services agents who have access to the taxpayer’s return can explain any changes which were made during the assessment process. A real-time notification of the hours of service and current telephone wait times for that service is available on the CRA website at Contact the Canada Revenue Agency - Canada.ca. If that call doesn’t resolve the taxpayer’s questions, or there is still a disagreement, the taxpayer has to decide whether to take the next step of filing a Notice of Objection to the Notice of Assessment.
Filing a Notice of Objection formally advises the CRA that the taxpayer is disputing the Agency’s determination of their tax liability for the taxation year in question. Not incidentally, the filing of an Objection also brings to a halt most efforts undertaken by the CRA to collect taxes which it considers owing for the taxation year under dispute (although, if the taxpayer is eventually found to owe an amount in dispute, interest on that amount will have accumulated in the interim). Where the taxpayer files an Objection, the CRA’s collection efforts are, in most cases, suspended until 90 days after the date the CRA’s decision on that Objection is sent to the taxpayer.
There is a time limit by which any Objection must be filed, albeit a reasonably generous one. Individual taxpayers must file an Objection by the later of 90 days from the mailing date of the Notice of Assessment (the date found at the top of page 1) or one year from the due date of the return which is being disputed. So, for tax returns for the 2023 tax year, the one-year deadline (which is usually, but not always, the later of those two dates) would be April 30, 2025 (or June 17, 2025 for self-employed taxpayers and their spouses). As with most things related to taxes, it’s best not to put it off. At the very least, if the taxpayer is ultimately found to owe some or all of the taxes assessed by the CRA, interest will have accrued on those taxes for the entire period since the filing due date and, if the filing of the Objection is delayed, the CRA may well have already commenced its collection efforts.
Taxpayers who have registered with the CRA’s online services feature My Account can file their Notice of Objection online at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html. The taxpayer provides information with respect to the assessment being disputed and the reasons why the assessment is being disputed and submits those reasons by clicking on the Submit button at the bottom of the "File a formal dispute” page. Taxpayers who are disputing their tax assessment online can also scan and send supporting documents relating to that dispute to the Agency.
While filing a dispute through My Account is certainly faster than mailing (or faxing) a hard copy of the Notice of Objection, not all taxpayers want to use that option. Taxpayers who choose instead to file their objection using a hard copy of a Notice of Objection form can find the most current version of the CRA’s standardized T400A Objection (which was updated and re-issued in the fall of 2023) on the Agency’s website at T400A Notice of Objection - Income Tax Act - Canada.ca.
Taxpayers aren’t obligated to use the CRA’s official Notice of Objection form – any communication which makes it clear that the taxpayer is objecting to his or her Notice of Assessment will do. Nonetheless, there’s no reason not to use the standardized form, and there are benefits to doing so. Using the T400A form will make it clear to the CRA that a formal objection is being filed, will present the necessary information in a format with which the Agency is familiar, and will also mean that no required information is inadvertently omitted. It’s also helpful to include a copy of the Notice of Assessment which is being disputed. Taxpayers should also consider ensuring proof of both delivery and time of delivery by sending the form or letter to the Appeals Intake Center in a way which provides for tracking and proof of delivery.
There is a single Appeals Intake Centre, and the mailing address for that Centre can be found on the CRA’s Notice of Objection form. A Notice of Objection can also be faxed to the Appeals Intake Centre, and the fax numbers for that Centre are available on the CRA website at File an objection – Income tax – Canada.ca. Finally, taxpayers can contact the CRA at its objection enquires phone line in order to get information about the status of their appeal. The toll-free telephone number for calls from within Canada to that line is 1-800-959-5513.
In the course of making its decision, the Agency may or may not contact the taxpayer for further discussion of the issues in dispute. Should the taxpayer be contacted, they may be asked to provide representations outlining their position, in writing or at a meeting. Through such representations and meetings, it may be possible for the taxpayer and the CRA to come to an agreement on the taxpayer’s tax liability. In either case, the CRA will either confirm its original assessment or change it. If the original assessment is changed, the CRA will issue a Notice of Reassessment outlining the changes. If the taxpayer continues to disagree with the CRA’s position, the next step is an appeal to the Tax Court of Canada. It’s generally a good idea, if an appeal is being considered, to consult legal counsel before filing that appeal.
Detailed information on the objection process is available on the CRA website at File an objection – Income tax – Canada.ca The Agency also publishes a useful pamphlet entitled Resolving Your Dispute: Objection and Appeal Rights under the Income Tax Act, and the most recent release of that publication can be found on the CRA website at P148 Resolving your dispute: Objection rights under the Income Tax Act - Canada.ca.
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 the majority of Canadians, the due date for filing of an individual tax return for the 2023 tax year was Tuesday April 30, 2024. (Self-employed Canadians and their spouses have until Monday June 17, 2024 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency (CRA) will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and the amount of tax payable determined by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.
For the majority of Canadians, the due date for filing of an individual tax return for the 2023 tax year was Tuesday April 30, 2024. (Self-employed Canadians and their spouses have until Monday June 17, 2024 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency (CRA) will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and the amount of tax payable determined by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.
By April 22, 2024, almost 21 million individual income tax returns for the 2023 tax year had been filed with the CRA. And, inevitably, some of those returns contain errors or omissions that must be corrected.
Nearly 95% of the returns which have already been filed for the 2023 tax year were filed through electronic 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 arithmetical 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 (or, more frequently, locate a tax information slip that had been received but was overlooked). 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 $76,326 in income becomes $73,626 or $66,326. Whatever the cause, where the figures input are incorrect or information is missing, those errors or omissions will be reflected in the final (incorrect) tax payable figure 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.
For several years now, taxpayers who file their tax returns online, whether through NETFILE or EFILE, have been able to notify the CRA of an error or omission in an already-filed return electronically by using the Agency’s ReFILE service. That 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 very easily make corrections to an already filed return online, on the CRA website. Those taxpayers who used NETFILE to file their return can file an adjustment to a return filed for any of the 2020, 2021, 2022 and 2023 tax years.
While the majority of changes which a taxpayer is likely to want to make on his or her return can be made through electronic means, there are limitations to the service. 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.
Taxpayers who have registered for the CRA’s “My Account” service have the option of making a change or correction to a return online through My Account, using the “Change My Return” feature. At one time, the process of becoming registered for My Account was somewhat cumbersome, as the taxpayer had to wait to receive a CRA-issued security code, which was sent by regular mail. That process has been streamlined, and registration for My Account can now be done in real time through what the CRA terms “document verification”. That document verification process requires a user to take a smartphone picture of their government-issued photo identification and of themself in order to verify identity. For purposes of this process, the only acceptable photo identification documents are a Canadian passport, Canadian drivers’ licence, or provincial/territorial photo ID card. More information on how to register for My Account using the document verification method can be found on the CRA website at My Account – What’s new - Canada.ca.
While using the CRA’s online services, whether through My Account or ReFILE, is certainly the fastest way to make a change or correction to an already-filed return, taxpayers who don’t wish to use any online method do still have a paper option. The paper form to be used is Form T1-ADJ E (23), which can be found on the CRA website at T1 Adjustment Request (canada.ca). 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.
Hard copy of a T1-ADJ E (23) is filed by sending the completed document to the appropriate Tax Center, meaning the one with which the tax return was originally filed. A listing of Tax Centres and their addresses can be found on the reverse of the TD-ADJ E (23) form. A taxpayer who isn’t sure any more which Tax Centre their 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 their location from the drop-down menu found there. The address for the correct Tax Centre will then be provided.
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 (23) in hard copy – it’s necessary to wait until the Notice of Assessment for the (incorrect) return already filed is received. Corrections to a return which are submitted prior to the time that return is assessed simply can’t be processed by the Agency.
Once the Notice of Assessment is received, and an adjustment request is made, it will take at least a few weeks before the CRA responds by issuing a Notice of Reassessment based on the new information provided by the taxpayer. Not surprisingly, requests which are submitted during the CRA’s peak return processing period between March and July will likely take longer.
Sometimes the CRA will contact the taxpayer, even before a return is assessed (or reassessed), 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.
As everyone knows, buying one’s first home – achieving that elusive first step on to the “property ladder” – has always presented a challenge, and that challenge has rarely been greater than it is now. The two unavoidable hurdles which must be cleared by first time home buyers are putting together sufficient funds for a down payment, and qualifying for mortgage financing under mortgage lending requirements which have become increasingly stringent in recent years. Soaring house prices and mortgage interest rates which have steadily increased over the past two years combine to make it difficult to clear either or both of those hurdles.
As everyone knows, buying one’s first home – achieving that elusive first step on to the “property ladder” – has always presented a challenge, and that challenge has rarely been greater than it is now. The two unavoidable hurdles which must be cleared by first time home buyers are putting together sufficient funds for a down payment, and qualifying for mortgage financing under mortgage lending requirements which have become increasingly stringent in recent years. Soaring house prices and mortgage interest rates which have steadily increased over the past two years combine to make it difficult to clear either or both of those hurdles.
Help is provided to first time home buyers through a number of federal and provincial tax credit or tax deferral programs, and three new measures recently announced by the federal government as part of the 2024-25 Federal Budget are intended to provide further assistance with putting together a down payment, qualifying for mortgage financing, and repaying amounts borrowed to purchase a first home.
Changes to the Home Buyers’ Plan
The first two measures relate to changes to the federal Home Buyers’ Plan, or HBP. The HBP allows first-time buyers who have money saved in a registered retirement savings plan (RRSP) to withdraw the funds held in that RRSP (to a prescribed limit) on a tax-free basis, as long as those funds are used toward the purchase of a first home. Under current rules, a first-time home buyer can withdraw up to $35,000 from his or her RRSP to use toward the purchase of a first home.
This year’s Federal Budget included a proposal to increase the amount which each individual can withdraw on a tax-free basis from their RRSP for the purchase of a first home from $35,000 to $60,000. The change is effective for RRSP withdrawals made by HBP participants after the federal budget date of April 16, 2024.
While the HBP rules allow first-time home buyers to withdraw funds on a tax-free basis from their RRSPs, those rules also require that the funds be repaid to the RRSP. That repayment takes place on a prescribed schedule – repayments in a specified amount must start in the second year after the withdrawal was made and must be completed within 15 years. In any year(s) in which a required repayment is not made in full, the amount of any repayment not made is included in the income of the RRSP holder for the year and is fully taxed as income.
The first few years of home ownership are often the most challenging from a financial perspective, as new homeowners adjust to the need to make regular mortgage payments and property tax payments and to meet all of the varied (and often unanticipated) expenses that home ownership entails. Having to also make repayments to one’s RRSP at the same time undoubtedly adds to the financial stress.
In this year’s budget, the federal government proposed a change in the repayment rules for the HBP. As a temporary measure, HBP participants who make a first withdrawal from their RRSP between January 1, 2022 and December 31, 2025 will not be required to begin repaying those amounts to their RRSP until the fifth year after the year in which the withdrawal was made. Full repayment will still have to be made in prescribed amounts and within the required 15-year repayment period.
Extended amortization on new build purchases by first-time buyers
For all but the most fortunate first-time home buyers, purchasing a home means borrowing money to cover the difference between the down payment amount and the total purchase price of the home. For most, that means taking out a mortgage which must be repaid in specified amounts over a specified period of time (known as the “amortization period”).
The “standard” repayment or amortization period for residential mortgages is 25 years. Opting for a shorter amortization period means higher mortgage payments and, conversely, where the amortization period is longer than 25 years, the amount of monthly mortgage payments goes down. The recent federal government announcement allows qualifying first-time home buyers, as of August 1, 2024, to extend the amortization (repayment) period for their mortgage to 30 years. Significantly, however, that extended amortization period will be available only to first-time buyers who purchase newly-built homes.
Having the ability to extend the amortization period in this way will have two benefits. First, of course, having lower mortgage payments will ease the financial stress of first-time home ownership. As well, first-time home buyers who opt for a 30-year amortization period and therefore have smaller monthly mortgage payments will likely also find it easier to qualify for more mortgage financing. When assessing the creditworthiness of a mortgage financing applicant, one of the metrics used by a lender is the percentage of income required to meet monthly mortgage payments, along with other debt repayment obligations (car payments, credit card debt, etc.). Where monthly mortgage payment amounts are reduced by an extended amortization period, the percentage of income which the prospective home buyer must allocate to debt repayment goes down, meaning that their creditworthiness, and the amount of mortgage financing for which they qualify, may increase.
Each of these measures is intended to help qualifying first-time home buyers get into the housing market, and each will undoubtedly have that effect. However, as with nearly all financial and tax planning strategies, there are potential downsides which have to be considered. Withdrawing funds from an RRSP inevitably reduces the amount of investment income which those funds can earn, and ultimately means reduced retirement savings over the long term. Extending an amortization period reduces monthly mortgage payments but will mean that, over the long run, the total amount of interest paid will be much higher. Each prospective homeowner will have to determine what the “right” course of action is, based on their individual circumstances. Some help with that determination can be found on the website of the Financial Consumer Agency of Canada at https://www.canada.ca/en/financial-consumer-agency/services/mortgages.html, where detailed information on the ins and outs of financing a home purchase (including online calculators) is provided.
More information on the budget measures is available on the Finance Canada website at https://budget.canada.ca/2024/report-rapport/chap1-en.html#s1-2.
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 rarely have reason to interact with the tax authorities, and for most people, that’s the way they like it. In the vast majority of cases, Canadians file their tax returns each spring, receive their refund or pay any balance of taxes owing, and forget about taxes until filing season rolls around the following year.
Most Canadians rarely have reason to interact with the tax authorities, and for most people, that’s the way they like it. In the vast majority of cases, Canadians file their tax returns each spring, receive their refund or pay any balance of taxes owing, and forget about taxes until filing season rolls around the following year.
In many cases, however, things don’t run that smoothly, and it’s necessary for the Canada Revenue Agency to contact a taxpayer, to request additional information or seek confirmation of a deduction or credit amount claimed on the return. As our tax system is a self-assessing one, and nearly all returns are filed by electronic means (in which no receipts or other documentation are filed) it’s not surprising that the CRA would need to follow up with some taxpayers with respect to tax matters.
The difficulty for such taxpayers is that a communication – a letter or unsolicited telephone call purporting to be from the CRA – might be legitimate, or it might be part of a scam seeking to defraud the taxpayer. A legitimate communication from the tax authorities can’t be ignored, but clicking on a link in a fraudulent text or email, or providing personal financial information to a scammer over the phone (or worse, sending money), could be disastrous for the taxpayer. And, to add to the difficulties, scammers have become more and more sophisticated in their approaches. A fraudulent phone call from a scammer might show a legitimate CRA phone number on the recipient’s call display, leading him or her to conclude that the call is in fact from the Agency. And, according to the CRA, some fraudulent text messages now include images taken from Government of Canada social media accounts to make their scam messages look more legitimate.
The CRA is well aware of these problems, as tax frauds and scams have become so pervasive that on occasion CRA employees who contact taxpayers on genuine CRA business have had difficulty convincing the recipients of such calls that the call is a legitimate one. To address this problem, the Agency has posted information on its website on how (and how not) to make that determination. The Agency’s goal is two-fold: the first, of course, is to help taxpayers avoid becoming yet another victim of such frauds; the second is to prevent situations in which taxpayers ignore legitimate communications from the Agency, having dismissed them as just another phishing or scam attempt.
To help taxpayers verify that a contact is legitimately from the CRA, the Agency utilizes a number of strategies and security measures. First, any initial contact from the CRA will usually be by way of letter or phone call. The CRA does not send or receive emails or texts containing confidential personal tax information, or communicate with taxpayers on such matters through social media. When the CRA wants to initiate contact with a taxpayer who has not registered for the CRA service My Account, it will send the taxpayer a letter by regular mail, or will contact the taxpayer by phone call. Taxpayers who have registered for My Account may receive an email from the CRA letting them know that there is a communication for them to view in their online CRA account. The taxpayer will then be able to access any letters or electronic communication from the Agency on the CRA website, but only after signing into My Account. My Account, like all of the CRA’s online services, now requires user ID, password, and multi-factor authentication.
Where an unsolicited contact from the CRA to an individual taxpayer is made by telephone, it can be difficult to determine whether that unfamiliar voice on the telephone is in fact a CRA employee (remembering that call display is no longer an effective means of determining whether the call is actually from the Agency).
The Agency suggests that where the taxpayer wishes to verify that the call is in fact from a CRA employee (which is always the best approach when receiving any such phone call), that they take the following steps to ensure that that is the case.
- Tell the caller you would like to first verify their identity.
- Request and make a note of their:
- name,
- phone number, and
- office location.
Not infrequently, a taxpayer will contact the CRA through one of its individual or business tax help lines, which are answered by call centre agents. Each of those telephone services offers an automated callback service – when wait times reach a certain threshold, the taxpayer is given the option of receiving a callback rather than continuing to wait on hold. Where the taxpayer chooses the callback option, they are provided with a randomized four-digit confirmation number. The CRA call centre agent who returns the taxpayer’s call will repeat that number, so that the taxpayer can be certain that it is a CRA employee who is calling.
Finally, there are some actions which, if taken by anyone purporting to be from the CRA, should lead the taxpayer to immediately end the telephone call or delete the text or email, including the following:
- the caller does not give proof of working for the CRA, for example, their name and office location;
- the caller pressures the taxpayer to act now, uses aggressive language, or issues threats of arrest, deportation, or sending law enforcement;
- the caller asks for information that the taxpayer would not enter on his or her return – for example, a credit card number; or
- the caller recommends that the taxpayer apply for benefits, or offers to apply for benefits on the taxpayer’s behalf.
Any unsolicited email or text which purports to be from the CRA should be immediately deleted WITHOUT clicking on any links. The only instances in which the CRA will email a taxpayer is to notify them that something is available for them to view in their online CRA account (which requires log-in with ID, password, and multi-factor authentication). The Agency will also email a form or publication where the taxpayer has previously requested it during a call or a meeting with a CRA agent. Information on how to ensure that such an email is legitimate can be found on the Agency’s website at What to expect when the Canada Revenue Agency contacts you - Canada.ca.
Finally, a CRA representative will never
- demand immediate payment from the taxpayer by any of the following methods:
- Interac e-transfer,
- cryptocurrency (Bitcoin),
- prepaid credit cards,
- gift cards from retailers such as iTunes, Amazon, or others;
- ask the taxpayer for a fee to speak with a contact centre agent;
- set up a meeting in a public place to take a payment from the taxpayer;
- leave voicemails that are threatening to the taxpayer, or that include the taxpayer’s personal or financial information; or
- send an email or text message with a link to the taxpayer’s refund.
While scams and frauds and their perpetrators have been around for literally centuries, changes in how we communicate and how we conduct our financial affairs have made it significantly easier to carry out such deceptions. Most taxpayers are now accustomed to and at ease with conducting much of their personal and financial lives online, and replying instantly to any communication has become the norm. And even newer technology, like AI, poses additional threats for the future.
In such an environment, the best protection for a taxpayer who has received an unsolicited communication purporting to be from the CRA is to do … nothing, in the moment. Responding immediately without taking the time to assess and verify the legitimacy of the communication is exactly the response the scammers count on and profit from. (As well, any communication which requires the taxpayer to act immediately with respect to a tax matter is almost certainly fraudulent – if the CRA contacts a taxpayer requesting information or documentation, or payment, a reasonable time period in which to respond will be provided and a date by which that response is required will be specified as part of the communication.) The taxpayer’s best protection is to double check in order to verify the legitimacy of any unsolicited contact received with respect to matters of tax or personal finances. Doing so is no longer just prudent, it’s a necessity.
More information on how to avoid become the victim of a tax scam can be found on the CRA website at Security and privacy of your information with the CRA - Canada.ca.
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 taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
Most taxpayers are, of course, hoping for a refund – the bigger the better. And in most cases that hope is realized. Of the approximately 6 million tax returns filed with the Canada Revenue Agency between February 8 and March 18 of this year, 65% resulted in the payment of a refund to the taxpayer, while only 15% resulted in a balance owed to the Canada Revenue Agency. (The remaining 20% were nil returns.) However, while only a small percentage of returns put the taxpayer in the position of owing money to the government, that’s not much consolation to the taxpayers who find themselves in that situation.
The worst-case scenario, for all taxpayers, is to find out that they are faced with a large tax bill and an imminent payment deadline, and that they just don’t have the money to make the required payment by that deadline. This year, that deadline is Tuesday April 30, 2024 for ALL individual taxpayers (including self-employed taxpayers and their spouses who don’t actually have to file their returns for 2023 until June 15, 2024). That payment deadline is inflexible and, where payment in full is not made on or before April 30, 2024, interest charges on any unpaid balance will be levied by the Canada Revenue Agency beginning on May 1, 2024. Interest charges levied by the CRA tend to add up quickly, for two reasons. First, the interest charged by the CRA on outstanding tax amounts is, by law, higher than current commercial rates – the rate charged from April 1 to June 30, 2024 is 10.0%. Second, interest charges levied by the CRA are compounded daily, meaning that each day interest is levied on the previous day’s interest charges. It is for these reasons that a taxpayer is, where at all possible, likely better off arranging private borrowing in order to pay any taxes owing by the April 30, 2024 deadline.
Where the taxpayer can’t pay his or her tax bill out of current resources and is unable to borrow the funds to do so, there is another option. Like most creditors, the CRA would rather get paid on time and in full, but the Agency’s ultimate goal is to collect the full amount of taxes owed. If a tax bill can’t be paid, in full or in part, out of either current resources or private borrowing arranged by the taxpayer, the Canada Revenue Agency is open to making a payment arrangement with that taxpayer, providing him or her with the option of paying an amount owed over time, plus interest.
There are two avenues available to taxpayers who want to propose such a payment arrangement. The first is a call to the CRA’s automated TeleArrangement service at 1-866-256-1147. When making such a call, it is necessary for the taxpayer to provide their full name and address, date of birth, and social insurance number, and to have the Notice of Assessment for the last tax return for which they were filed and assessed. For taxpayers who are up to date on their tax filings, that will be the Notice of Assessment for the return for the 2022 tax year. The TeleArrangement Service is available Monday to Friday, from 7 a.m. to 10 p.m., Eastern time.
Taxpayers who would rather speak directly to a CRA client services agent can call the Agency’s debt management call centre at 1-888-863-8657 from 7 a.m. to 8 p.m. Eastern Time Monday to Friday, or can complete an online form (available at https://apps.cra-arc.gc.ca/ebci/iesl/showClickToTalkForm.action) requesting a callback from a CRA agent.
Finally, regardless of the taxpayer’s circumstances, there is one strategy which is, in all circumstances, a bad one. Taxpayers who can’t pay their tax bill by the deadline sometimes conclude that there is no point in filing if payment can’t be made. That’s the wrong decision, and also a costly one. Where an amount of tax is owed and the return isn’t filed on time, there is an immediate tax penalty imposed of 5% of the outstanding tax amount – and interest charges start accruing on that penalty amount (as well as on the outstanding tax balance) immediately. For each full month that the return isn’t filed, a further penalty of 1% of the outstanding tax amount is charged, to a maximum of 12 months. Higher penalty amounts are charged, for a longer period, where the taxpayer has incurred a late-filing penalty within the past three years. In the worst-case scenario, the total penalty charges can reach 50% of the tax amount owed – and that doesn’t count the compound interest which is levied on all penalty amounts, as well as on all unpaid taxes. In all cases, no matter what the circumstances, the right answer is to file one’s tax return on time.
Detailed information on the options available to taxpayers who can’t pay their taxes on time and in full can be found on the CRA website at Call us if you can't pay in full or on time - Debt collection at the CRA - Canada.ca and https://www.canada.ca/en/revenue-agency/services/payments-cra/payment-arrangements.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.
Our tax system is, for the most part, a mystery to individual Canadians. The rules surrounding income tax are complicated and it can seem that for each and every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances, and of which most Canadians are aware. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2023 must be remitted to the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2024. No exceptions and, absent extraordinary circumstances, no extensions.
Our tax system is, for the most part, a mystery to individual Canadians. The rules surrounding income tax are complicated and it can seem that for each and every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances, and of which most Canadians are aware. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2023 must be remitted to the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2024. No exceptions and, absent extraordinary circumstances, no extensions.
It is very much in the CRA’s interest to make paying taxes as simple and as straightforward as it can be, and so the Agency offers individual taxpayers a wide range of choices when it comes making that payment. There are, in fact, no fewer than seven separate options available to individual residents of Canada in paying their taxes for the 2023 tax year. The first four options outlined below involve payment by electronic means, while the last three describe those available to taxpayers who would prefer to make their payments in person, or by mailing a cheque to the CRA.
Pay using online banking or ATM
Millions of Canadians transact most or all of their banking using the online services of their particular financial institution and/or at an ATM of the financial institution. The list of financial institutions through which a payment can be made to the Canada Revenue Agency is a lengthy one (available at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-online-banking.html), and includes all of Canada’s major banks and credit unions.
The specific steps involved in making that payment will differ slightly for each financial institution, depending on how their online payment systems or ATM systems are configured. In most cases, it is necessary to have the Canada Revenue Agency listed as a payee on one’s online banking or ATM arrangements.
It’s important as well to remember that the nature of the payment – i.e. current year tax return, as distinct from current year tax instalment payments – must be specified, and the taxpayer’s social insurance number must be provided, in order to ensure that the payment is credited to the correct account, for the correct taxation year.
It’s not necessary to access any particular CRA form in order to make an online payment of taxes through one’s financial institution.
Using the CRA’s My Payment
The CRA also provides an online payment service called My Payment. There is no fee charged for the service, and it’s not necessary to be registered for any of the CRA’s other online services in order to use My Payment.
What is necessary is that the taxpayer have an activated debit card with an Interac Debt, VISA Debit, or Debit MasterCard logo from a participating Canadian financial institution, as My Payment is set up to accept payment using only those cards. Credit cards cannot be used to make a payment through My Payment. Anyone intending to use My Payment should also confirm that the amount of any payment to be made is within the transaction limits imposed by their particular financial institution.
A list of participating financial institutions for each type of card, and more details on how to use this payment method, can be found at https://www.canada.ca/en/revenue-agency/services/e-services/payment-save-time-pay-online.html.
Payment by credit card, PayPal, or Interac e-transfer
While it’s possible to pay one’s taxes using a credit card, PayPal, or Interac e-transfer, such payments can only be made through third-party service providers (that is, payments by those methods cannot be made directly to the Canada Revenue Agency), and such third-party service providers will impose a fee for the service.
The CRA website indicates that there is currently only one such third party service provider – Pay Simply – which can process and remit individual income tax amounts owed through credit card, PayPal, or Interac e-transfer.
Details of making an income tax payment through a third-party service provider can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-credit-card.html.
Payment by pre-authorized debit
It’s possible to set up a pre-authorized debit (PAD) arrangement with the CRA, authorizing the Agency to debit the taxpayer’s bank account for an amount of taxes owed, on dates specified by the taxpayer.
Individuals who make instalment payments of tax throughout the year may already have such an arrangement in place and can certainly use that existing arrangement to arrange a PAD of any balance of taxes owed for the 2023 tax year. However, any such arrangement must be made at least five business days before the payment due date of April 30. A taxpayer who makes a payment of taxes only once a year is likely better off using another of the available payment methods.
There is also another option for taxpayers who have their return prepared and E-FILED by an authorized electronic tax filer. Such taxpayers can have that E-FILER set up a PAD agreement on their behalf in order to make a “one-time” payment for a current year tax amount owed. Such an arrangement is used only for the payment of a current year (i.e., 2023) tax balance, and can’t be used for other payments like instalment payments of tax. Details on how to set up a pre-authorized debit arrangement, whether for a single payment or for recurring payments, are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.
Paying in person at your financial institution
For those who don’t use online banking, or simply prefer to make a payment in person, it’s possible to pay a tax amount owed at the bank. Doing so, however, requires that the taxpayer have a specific personalized remittance form – the T7DR, Amount owing Remittance Voucher.
If the taxpayer has not received the required remittance form from the Canada Revenue Agency, it’s possible to download and print the form from the CRA website. Instructions on how to do so can be found on that website at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html, and detailed information on how to make the payment is available on the same website at Pay at the counter (teller) at a bank or credit union - Payments to the CRA - Canada.ca.
Paying at a Canada Post outlet
All Canada Post retail outlets can receive payments of individual income tax balances owed, in cash or by debit card, and will charge a fee for this service. Once again, however, it’s necessary to have a specific form to do so.
In this case, the taxpayer must have a QR code which contains the information needed for the CRA to credit the amount paid to the taxpayer’s account.
While a QR code is sometimes included on remittance forms sent to the taxpayer by the CRA, it’s also possible to generate a QR code online through the CRA website. A link to instructions on how to do so can be found on that website at https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/pay-canada-post.html.
Paying by cheque
While it’s not as common anymore, it’s still possible to pay any tax balance owed on filing by cheque, as outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-cheque.html.
Such cheques are made payable to the Receiver-General for Canada, and are mailed, together with the required remittance form (T7DR – Amount Owing Remittance Form) to the Canada Revenue Agency, using the address found on the back of the payment remittance form. Such payments can also be dropped off at a Canada Revenue Agency dropbox location (a listing of such locations can be found on the CRA website at CRA Office and dropbox locations - Canada.ca). As is the case with payments made at a financial institution, the taxpayer can print the required remittance form from the CRA’s website. Instructions on how to do so can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.
The CRA also suggests that, where payment of taxes owing is made by cheque, the taxpayer should include his or her social insurance number on the memo line found on the front of the cheque, and indicate the type of payment being made (that is, 2023 tax balance). Doing so will help ensure that the payment is credited to the correct account.
A decision on what method to use to pay one’s taxes includes another important consideration of which most taxpayers are unaware. Under longstanding Canada Revenue Agency policy, the CRA considers that a payment is actually made on the date on which it is received by the Agency. However, depending on the payment method chosen, that date of receipt often isn’t the same day the payment is made by the taxpayer, and it can be as much as several days later. And, of course, where payment is made close to the payment deadline, that delay can mean the difference between a timely payment and one that is late and incurs interest charges.
Helpfully, the Canada Revenue Agency provides information, for each payment method, on how the date of receipt is determined for that particular method. That information can be found on the CRA’s website at Canada Revenue Agency https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/make-payment.html. Taxpayers who have delayed making a payment until April 30 should be aware that the only two payment methods for which payment is always considered to have been received by the CRA on the same day it is made are payment at the counter at one’s financial institution (not at an ATM) or payment at a Canada Post location. In both cases, the remittance voucher will be date-stamped with the current day’s date, and the CRA will consider payment to have been made on that day, regardless of when it actually receives the funds.
Finally, once payment has been made, by any payment method, the CRA provides taxpayers with an online method for confirming that a payment has been received and applied to the taxpayer’s account. That service is available at https://www.canada.ca/en/revenue-agency/services/payments-cra/confirm-payment.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.
No one likes paying taxes, but for taxpayers who live on a fixed income having to pay a a large tax bill can mean real financial hardship – and the majority of Canadians who live on fixed incomes are, of course, those who are over 65 and retired. Adding to their financial stress is the reality that such individuals have been coping, for the past two years, with inflationary increases in the cost of just about all goods and services, especially food and shelter.
No one likes paying taxes, but for taxpayers who live on a fixed income having to pay a a large tax bill can mean real financial hardship – and the majority of Canadians who live on fixed incomes are, of course, those who are over 65 and retired. Adding to their financial stress is the reality that such individuals have been coping, for the past two years, with inflationary increases in the cost of just about all goods and services, especially food and shelter.
Fortunately, the Canadian tax system recognizes and addresses these realities by providing a number of tax deductions and credits which are available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit). In addition, tax deductions or credits are available to help offset the kinds of costs – like medical costs – which are more often incurred by older Canadians. What follows is an outline of some of the most common such deductions and credits which may be claimed by those over 65 on the return for the 2023 tax year.
Age credit
All Canadians who were age 65 or older at the end of 2023 can claim the age credit on their tax return for the year. For 2023, that credit amount is $8,396 which, when converted to a tax credit, reduces federal tax by $1,259.40.
While the age credit can be claimed by anyone aged 65 or older, the amount of credit claimable is reduced where the taxpayer’s income for 2023 was more than $42,335. Where that is the case, the available credit is reduced by 15% for each dollar of income over that $42,335 threshold amount.
Pension income credit
Most Canadians who are aged 65 or older receive income some kind of private pension income which would qualify for the pension income credit. For purposes of that credit, amounts received from an employer-sponsored pension plan qualify, but so too do amounts received from a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF). Amounts received from government-sponsored retirement income plans (like the Canada Pension Plan (CPP) or Old Age Security (OAS)) do not, however, qualify.
Where the taxpayer receives amounts that qualify as pension income for purposes of the pension income credit, the first $2,000 of such income is effectively exempt from federal tax. In addition, unlike the age credit, the total income of the taxpayer does not limit a claim for the pension income credit in any way.
Pension income splitting
Pension income splitting is a tax strategy which allows married taxpayers who are over the age of 65 to split eligible pension income between them, in order to obtain the best possible overall tax result.
The general rule with respect to pension income splitting is that a taxpayer who receives private pension income during the year is entitled to allocate up to half that income (without any dollar limit) to their spouse for tax purposes. In this context, private pension income means a pension received from a former employer and, where the income recipient is age 65 or older, payments from an annuity, an RRSP, or an RRIF. Government source pensions, like the CPP, Québec Pension Plan (QPP), or OAS payments do not qualify for pension income splitting, regardless of the age of the recipient.
The mechanics of pension income splitting are relatively simple. There is no need to transfer funds between spouses or to make any change in the actual payment or receipt of qualifying pension amounts, and no need to notify a pension administrator. Taxpayers who wish to split eligible pension income received by either of them must each file Form T1032 Joint Election to Split Pension Income (T1032 E (23)) with their annual tax return. That form, which is not included in the annual tax return package, can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1032.html or can be ordered in large print format by calling 1-800-959 8281.
The tax saving strategies outlined above can be claimed by any taxpayer who meets the basic eligibility requirements (age, type of income, marital status, etc.) for the credit. Other types of deductions or credits require that the taxpayer incur a particular kind of expenditure which can then be claimed on the annual return, with that claim reducing the amount of federal tax payable for the year.
Not infrequently, taxpayers incur such expenditures but do not receive the available tax benefit because they are unaware that a credit or deduction is available to be claimed. Almost every taxpayer, for instance, incurs medical expenses or makes charitable donations in the course of a year, both of which can be eligible for a tax credit claim. And while the Canada Revenue Agency will correct basic arithmetical errors made on a return, it does not (and cannot) ensure that the taxpayer has claimed all the deductions and credits to which they are entitled on the return for the year.
As well, most of the credits which are available to reduce federal tax payable can also be claimed for provincial tax purposes, with the amount of the available provincial tax savings determined by the taxpayer’s province of residence. Finally, many of the provinces also offer tax saving opportunities to residents who are over the age of 65 through programs such as property tax credits for senior homeowners or tax credits for expenditures related to increasing safety or mobility for an individual over the age of 65 who lives in his or her own home.
Most Canadians do not prepare their own tax returns, and it's not reasonable to expect individuals (of any age) who don’t spend their working lives immersed in the intricacies of the Canadian tax system to be aware of the myriad of deductions and credit claims which may be available to them to help lower their tax bill. There is, however, help to be had with the tax return preparation process through free tax clinics which will prepare a return for the taxpayer at no cost, and can help to ensure that all available tax deductions and credits are claimed. Those tax return preparation clinics are operating now and a listing of such clinics can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/community-volunteer-income-tax-program/need-a-hand-complete-your-tax-return.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 the past two years, Canadians have had to continually adjust their household budgets to accommodate price increases for nearly all goods and services. The impact of rising prices is felt most by those who are living on a fixed income and who, of necessity, spend a larger than average share of their income on non-discretionary expenditures like housing and food. And, while such individuals and families can be found in all age groups, retirees make up the largest Canadian demographic who live on such fixed incomes.
For the past two years, Canadians have had to continually adjust their household budgets to accommodate price increases for nearly all goods and services. The impact of rising prices is felt most by those who are living on a fixed income and who, of necessity, spend a larger than average share of their income on non-discretionary expenditures like housing and food. And, while such individuals and families can be found in all age groups, retirees make up the largest Canadian demographic who live on such fixed incomes.
For many Canadian retirees, benefits received from the Canada Pension Plan (CPP) and Old Age Security (OAS) make up a significant portion of their annual income. And while such benefit amounts are indexed to inflation, those inflationary increases in benefits are tied to the overall rate of inflation. For the past two years, however, the cost of non-discretionary goods and services – especially housing and food – has risen much faster than the general rate of inflation. Consequently, such increases have outstripped the amount by which CPP and OAS benefits have been increased to account for inflation. Price increases in the cost of food purchased from stores were, in fact, higher than the overall rate of inflation in every month between December 2021 and November 2023 – in some months, nearly three times the overall inflation rate.
It must seem to Canadian retirees that there just aren’t many good options when it comes to generating the cash flow needed to cover ever-increasing costs for non-discretionary expenditures. Fortunately, however, the roughly 75% of Canadians over the age of 60 who own their own homes (based on Statistics Canada’s figures for 2021) do have options. Canadians who are now of retirement age and own their homes most likely purchased those homes many years, or even decades, ago and have, consequently, built up significant equity. In the current economic circumstances, that equity has made them house-rich and cash-poor. And that equity can now provide an ongoing source of retirement income – through a home equity line of credit or a reverse mortgage.
The home equity line of credit (or HELOC), as the name implies, is a line of credit which permits the homeowner to borrow up to a pre-set limit based on the current market value of their home. Such borrowings can be in any amount (up to, of course, the limit on the HELOC) and can be made at any time and for any purpose. Typically, the interest rate charged on a HELOC is a variable rate – usually one half or one per cent more than the prime rate used by the lender. There is, however, a significant feature of the HELOC of which potential borrowers must be aware. While there is generally no obligation to repay amounts borrowed from a HELOC until either the death of the homeowner or until the house is sold, borrowers are required to pay interest each month on the total amount borrowed.
Take, for example, a couple who own a house currently valued at $750,000. Assume that the couple obtain a HELOC based on that home value and borrow $1,000 each month ($12,000 annually) from the HELOC to help meet current cash flow shortfalls. At an interest rate of 8.70%, they will be obliged to make an interest payment of approximately $87 per month on that $12,000 borrowing. As the amount of HELOC indebtedness increases over time, or the interest rate charged goes up, the amount of those required monthly interest payment obligations will, of course, also increase.
The other option open to homeowners to provide cash flow is a reverse mortgage. Like the HELOC, a reverse mortgage allows homeowners to borrow based on the market value of their property. A reverse mortgage is also similar to a HELOC in that borrowers can borrow a lump sum amount, or can opt to structure the reverse mortgage as a series of payments which will provide a regular income stream, or some combination of the two. And, as with a HELOC, no repayment of the funds advanced under a reverse mortgage is required until the death of the homeowner, or until they leave or sell the home.
The basic advantage of a reverse mortgage over a HELOC is that no payments of interest are required under a reverse mortgage. However, homeowners need to consider the impact that advantage can have over time. Once the reverse mortgage is taken out, interest will, of course, be levied on all amounts provided, and will accumulate from the time the funds are first advanced. Total interest costs can add up very quickly and reach significant amounts by the time the debt is eventually to be repaid, usually out of the proceeds from the sale of the house. And, of course, every dollar of funds advanced and interest levied eats away at the amount of equity which the homeowner has built up, on a dollar-for-dollar basis. By contrast, with a HELOC, where accrued interest charges must be paid monthly, the amount of debt (and consequent reduction in equity) will never be greater than the principal amount borrowed. Finally, under the terms of many reverse mortgages, a prepayment penalty is levied where the homeowner moves or sells the house within a few years of obtaining the reverse mortgage – the exact time frame will depend on terms provided by the particular lender. With a HELOC, however, repayment of the outstanding balance can be made in part or in full at any time, without penalty.
As is almost always the case with financial issues, there is no one right answer or even a one-size-fits-all answer, as the “correct” answer is always based on the particular financial and life circumstances of the individuals involved. Some help with making a decision on whether a HELOC or a reverse mortgage makes sense in one’s circumstances can be found on the website of the Financial Consumer Agency of Canada at https://www.canada.ca/en/financial-consumer-agency/services/mortgages/borrow-home-equity.html, where the benefits and downsides of each option are outlined in detail.
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 don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2023 ahead of the April 30, 2024 filing deadline.
Most Canadians don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2023 ahead of the April 30, 2024 filing deadline.
While that approach leaves plenty of time to get the return prepared and filed, it also means that the most significant opportunities to reduce or minimize the tax bill for 2023 are no longer available. Almost all such tax planning or saving strategies, in order to be effective for 2023, must have been implemented by the end of that calendar year.
The fact that the clock has run out on most major tax planning opportunities for 2023 does not, however, mean that there are no tax-saving strategies left. At this point, there are a couple of ways to minimize the tax hit for 2023 – by claiming all available deductions and credits on the return, and also by making sure that those deductions and credits are structured and claimed in the way which will give the taxpayer the greatest tax benefit.
In some cases, a claim for a tax deduction or credit can only be made on the return for the year in which the expense is incurred; in other cases, claims can be made for expenses incurred in the previous tax year or even as far back as five years previously. Consequently, getting the best tax result on one’s return requires an assessment of which deductions and credits are available to claim in the current year, whether some or all of them can be carried forward and claimed in a future year, and whether it makes sense to do so. It may seem counterintuitive, or even illogical, to not claim every available deduction and credit in order to obtain the best possible tax result for the year. However, in some cases (albeit for different reasons) th