2024 January Tax News

2024 January Tax News. Expert Fiscaliste provides income tax preparation and consulting services to individuals and businesses.

Table of Contents

    NETFILE service for 2023 tax returns available February 19

    February 2, 2024

    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 services will re-open on Monday, February 19, 2024, at 6:00 a.m. (Eastern Time).

    More information on NETFILE and ReFILE services, including eligibility requirements and a listing of certified software which can be used for filing of returns for 2023, can be found on the CRA website at File your taxes online: Understand NETFILE(CRA) – Canada.ca.

    Online filing of prior year tax returns available until January 26

    January 19, 2024

    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 provided for prior year returns will be available until Friday January 26, 2024. After that date, the NETFILE service will be offline and unavailable until it re-opens (around the middle of February) for the filing of individual income tax returns for the 2023 tax year.

    More information on the NETFILE service for current and prior year returns can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-individuals/netfile-overview/eligibility.html.

    January 18 deadline for repayment of CEBA loans

    January 13, 2024

    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 partially forgivable where required repayments are made by a specified deadline. That deadline is January 18, 2024 for eligible CEBA loan holders in good standing.

    The federal government has not announced any further extension of the repayment deadline: consequently, if a loan remains outstanding on January 19, 2024, it will convert to a term loan with full principal repayment due on December 31, 2026.

    Details of the repayment process, including the federal government’s plans for collection of such loans, can be found on the federal government’s CEBA webpage at Canada Emergency Business Account (CEBA) (ceba-cuec.ca).

    Tax deadlines and limits for the 2024 tax year

    January 9, 2024

    Each new tax year brings with it a schedule of tax payment and filing deadlines, as well as some changes with respect to tax saving and planning opportunities. Some of the more significant dates and changes for individual taxpayers for 2024 are listed below.

    Registered Retirement Savings Plan (RRSP) deduction limit and contribution deadline

    The RRSP current year contribution limit for the 2023 tax year is $30,780. In order to make the maximum current year contribution for 2023 (for which the contribution deadline will be Thursday February 29, 2024), it will be necessary to have earned income of $171,000 for the 2022 taxation year.

    Tax-Free Savings Account (TFSA) contribution limit

    The TFSA contribution limit for 2024 is increased to $7,000. The actual amount which can be contributed by a particular individual includes both the current year limit and any carryover of uncontributed or re-contribution amounts from previous taxation years.

    Taxpayers can find out their personal 2024 TFSA contribution limit by calling the Canada Revenue Agency’s Individual Income Tax Enquiries line at 1-800-959-8281. Those who have registered for the CRA’s online tax service My Account can obtain that information by logging into My Account.

    A TFSA contribution can be made at any time during the taxation year.

    First Home Savings Account (FHSA) contribution limit for 2024

    The FHSA current year contribution limit for 2024 is $8,000. The actual amount which can be contributed by a particular individual includes both the current year contribution limit and any carryover of uncontributed amounts from 2023.

    There is a lifetime per individual limit of $40,000 in contributions to an FHSA, and an FHSA contribution can be made at any time during the taxation year.

    Individual tax instalment deadlines for 2024

    Millions of individual taxpayers pay income tax by quarterly instalments, which are due on the 15th day of March, June, September, and December 2024. Where the 15th of the month falls on a weekend or a statutory holiday, the instalment payment deadline is extended to the next business day.

    The actual tax instalment due dates for 2024 are as follows:

    • Friday March 15, 2024
    • Monday June 17, 2024
    • Monday September 16, 2024
    • Monday December 16, 2024

    Old Age Security income clawback threshold

    For 2024, the income level above which Old Age Security (OAS) benefits are clawed back is $90,997.

    Individual tax filing and payment deadlines in 2024

    For all individual taxpayers, including those who are self-employed, the deadline for payment of any balance of 2023 taxes owed is Tuesday April 30, 2024.

    Taxpayers (other than the self-employed and their spouses) must file an income tax return for 2023 on or before Tuesday April 30, 2024.

    Self-employed taxpayers and their spouses must file an income tax return for 2023 on or before Monday June 17, 2024.

    Federal individual tax rates and brackets for 2024

    January 9, 2024

    The indexing factor for federal tax credits and brackets for 2024 is 4.7%. The following federal tax rates and brackets will be in effect for individuals for the 2024 tax year.

    Income level                    Federal tax rate

    $15,705 – $55,867                  15.0%

    $55,868 – $111,733                20.5%

    $111,734 – $173,205              26.0%

    $173,206 – $246,752              29.0%

    Over $246,752                       33.0%

    Federal individual tax credits for 2024

    January 9, 2024

    Dollar amounts on which individual non-refundable federal tax credits for 2024 are based, and the actual tax credit claimable, will be as follows:

                                                                             Credit amount         Tax credit

    Basic personal amount*                                           $15,705            $2,356

    Spouse or common law partner amount*                   $15,705                $2,356

    Eligible dependant amount*                                      $15,705                $2,356

    Age amount                                                              $8,790                 $1,319

    Net income threshold for erosion of age credit            $44,325

    Canada employment amount                                      $1,433                    $215                        

    Disability amount                                                       $9,872                  $1,481

    Adoption expenses credit                                          $19,066                 $2,860

    Medical expense tax credit income threshold amount    $2,759

    *For taxpayers having net income for the year of more than $173,205, amounts claimable for the basic personal amount, the spousal amount and the eligible dependant amount for 2024 may differ.

    Canada Pension Plan Contributions for 2024

    January 9, 2024

    Changes made to the Canada Pension Plan (CPP) beginning in the 2024 calendar year will create a two-tier contribution structure.

    First-tier contributions for 2024 are set at 5.95% of pensionable earnings between $3,500 and $68,500.

    Second-tier contributions for 2024 are set at 4.0% of pensionable earnings between $68,500 and $73,200.

    The maximum CPP contribution in 2024 for individuals making only first-tier contributions (those with pensionable earnings of $68,500 or less) will be $3,867.50. Individuals making second tier contributions will be required to contribute up to an additional $188.00 in contributions for the year.

    Québec Pension Plan contributions for 2024

    January 9, 2024

    Changes made to the Québec Pension Plan (QPP) beginning in the 2024 calendar year will create a two-tier contribution structure.

    First-tier contributions for 2024 are set at 6.4% of pensionable earnings between $3,500 and $68,500.

    Second-tier contributions for 2024 are set at 4.0% of pensionable earnings between $68,500 and $73,200.

    The maximum QPP contribution in 2024 for individuals making only first-tier contributions (those with pensionable earnings of $68,500 or less) will be $4,160. Individuals making second tier contributions will be required to contribute up to an additional $188.00 in contributions for the year.

    Employment Insurance Premiums for 2024

    January 9, 2024

    The Employment Insurance (EI) premium rate for 2024 is set at 1.66%.

    Yearly maximum insurable earnings are set at $63,200, making the maximum employee premium $1,049.12.

    As in previous years, employer premiums are 1.4 times the employee premium. The maximum employer premium for 2024 is therefore $1,468.77.

    Canada Pension Plan benefits to increase by 4.4% in 2024

    January 5, 2024

    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 year will increase by 4.4%. The maximum retirement benefit payable during 2024 for individuals who begin receiving that retirement benefit at age 65 will therefore be $1364.60.

    Details of how CPP benefits are indexed, and the indexing calculation for 2024, can be found on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/after-apply/consumer-price-index.html.

    About Expert Fiscaliste

    Quebec RL-31

    Expert Fiscaliste provides income tax preparation and consulting services to individuals and businesses.

    If you want to take advantage of our services for your Tax Returns Give us a call at 514-954-9031, or visit our Contact Tax

    2023 December Tax News

    Table of Contents

      Changes to the Canada Pension Plan starting January 1, 2024 (December 2023)

      December 20, 2023

      Everyone in Canada who earns a salary or wages is familiar with the deduction taken from each paycheque for contributions to the Canada Pension Plan (CPP). The CPP is one of the two major government-sponsored retirement income programs in Canada – the other being the Old Age Security program.

      While the Old Age Security program is financed out of general federal government revenues, the CPP is self-funded by means of contributions made by employees, together with matching contributions made by their employers. (Self-employed individuals pay both the employee and employer portions of CPP contributions).

      Several years ago, it was determined that changes were needed to the CPP, to ensure that CPP retirement benefits replaced a greater percentage of working income than was then the case. Those changes to the CPP began in 2019, when the required annual contribution to the CPP began to increase. It was increased each year thereafter, and now stands at 5.95% of annual earnings.

      The basic structure of the CPP provides that everyone who is between 18 and 69 years of age and earns more than $3,500 per year must make CPP contributions equal to 5.95% of their income between $3,500 and a specified income ceiling. That income ceiling is known as the Year’s Maximum Pensionable Earnings (YMPE) and is set at $68,500 for 2024.

      Beginning in 2024, however, the CPP will change from a single-tier to a two-tier contribution structure, with higher-income individuals required to make an additional CPP contribution. Specifically, individuals who have annual income of less than the 2024 YMPE of $68,500 will continue to make Tier 1 CPP contributions of 5.95% of earnings between $3,500 and $68,500. However, those whose earnings exceed the $68,500 income ceiling must pay 4% of those additional earnings (Tier 2 contributions) up to a second earnings ceiling. That second earnings ceiling – to be called the Year’s Additional Maximum Pensionable Earnings, or YAMPE – is set at $73,200 for 2024.

      The effect of the upcoming changes is that individuals who will have income of more than $68,500 during 2024 must pay both the 5.95% contribution on earnings between $3,500 and $68,500 (Tier 1 contributions) and 4% of earnings between $68,500 and $73,200 (Tier 2 contributions).

      There are no tax or financial planning steps to be taken in response to the upcoming changes – having CPP contributions deducted from one’s income and remitted to the federal government by one’s employer is mandatory, and there is no ability to “opt out” of making either Tier 1 or Tier 2 contributions.

      Individuals who earn less than $68,500 during 2024 will see no change to the CPP contributions deducted from their paycheques, but those earning more than that amount will see increased deductions made for CPP beginning January 1, 2024. It should be noted as well that 2024 is something of a phase-in year for Tier 2 contributions. Those contribution amounts will increase in future years, as the upper income limit (or YAMPE) for such Tier 2 contributions, which is set at $73,200 for 2024, will increase significantly in 2025 and later years.

      No one likes to see additional deductions being taken from their paycheque but those who are affected by the increased contribution requirements at least have the satisfaction of knowing that their higher contributions will eventually be reflected in an increase in CPP retirement benefits to which they will be entitled.

      Detailed information on the upcoming changes to the CPP (including changes planned for years after 2024) can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/cpp-enhancement.html.

      Final individual income tax instalment for 2023 due on December 15

      December 16, 2023

      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 made on or before Friday December 15, 2023.

      Taxpayers who make instalment payments of tax will generally have received an Instalment Reminder, which sets out the suggested payment amount and the payment calculation options. More information on those options, as well as available payment methods, can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html.

      Old Age Security payments to increase by 0.8% for first quarter of 2024

      December 16, 2023

      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 adjusted quarterly, based on changes to the Consumer Price Index.

      The latest change means that the maximum OAS benefit for individuals aged 65 to 74 will increase from $707.68 to $713.34. The maximum OAS benefit for those aged 75 and over will increase from $778.45 to $784.68.

      The announcement of the increase can be found on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.

      New T4 and T4A reporting requirements for 2023

      December 2, 2023

      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 T4As must indicate on such information slips for 2023 whether, on December 31, 2023, a payee or any of their family members were eligible to access dental insurance, or dental coverage of any kind through their current or former employment.

      For purposes of the new reporting requirement, new boxes will be added to the T4 and T4A forms. Details of how to complete T4s and T4As to comply with the new requirements are outlined in the CRA Tax Tip, which can be found at Employers and pension plan administrators: Changes coming to T4/T4A reporting – Canada.ca.

      CRA announces indexation adjustment for 2024 personal tax amounts

      December 2, 2023

      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, such personal tax amounts will be increased by 4.7%.

      The announcement of that increase, together with a detailed listing of personal income tax brackets and personal tax credit amounts for 2024, can be found on the CRA website at Indexation adjustment for personal income tax and benefit amounts – Canada.ca.

      About Expert Fiscaliste

      Quebec RL-31

      Expert Fiscaliste provides income tax preparation and consulting services to individuals and businesses in Quebec, Canada and Internationally.

      If you want to take advantage of our services for your Tax Returns Give us a call at 514-954-9031, or visit our Contact Tax Experts page

      Share this:

      2023 November Tax News

      Table of Contents

        New measures to assist at-risk homeowners (November 2023)

        November 28, 2023

        The 10-fold increase in interest rates since March of 2022 has affected Canadians in almost every area of their financial lives, as individuals and families struggle to cope with the every-increasing bite that interest costs take out of their budgets.

        Probably no group has been more affected by increased interest costs than homeowners who have a mortgage on their family home and must find room in their budget to make ever-increasing payments on that mortgage.

        There are basically two types of mortgages held by Canadians. The first is a fixed rate mortgage in which, as the name implies, the rate of interest payable is set for a fixed term of, usually, one to five years. The required monthly payment is also set for the entire term and will not change, meaning that such homeowners are not affected by any change in interest rates during the current term of their mortgage. They will, however, have to renew that mortgage at the end of the current term, at whatever interest rates are then in effect.

        The other major type of mortgage financing is a variable rate mortgage, in which the interest rate payable on the mortgage amount goes up with every interest rate increase announced by the Bank of Canada and passed on to consumers by Canadian financial institutions. Homeowners who have a variable rate mortgage can have one of two types of repayment arrangements. The Financial Consumer Agency of Canada explains the two types of payment arrangements in this way:

        Adjustable payments with a variable interest rate

        With adjustable payments, the amount of the required mortgage payment changes if the interest rate changes. A set amount of each payment applies to the principal amount of the mortgage (the loan amount), while the interest rate portion changes as interest rates change.

        Fixed payments with a variable interest rate

        With fixed payments, although the rate of interest payable changes as interest rates change, the amount of the required mortgage payment stays the same.

        However, when interest rates change, the allocation of that fixed payment between principal and interest also changes. If the interest rate goes up, more of the payment goes towards the interest, and less to the principal. If the interest rate goes down, more of the payment goes towards the principal.

        Where interest rates increase substantially, as they have done over the past year and half, homeowners who have a variable interest rate mortgage with fixed payments are at risk of reaching the point at which their payments no longer cover even the required interest payment. In other words, although they are making payments on time and in the required set amount, their overall mortgage principal is increasing every month, as interest amounts which have not been paid are added to that mortgage principal – a situation known as negative amortization. 

        Finally, while holders of fixed rate mortgages (in which the interest rate does not change during the term of the mortgage) are currently sheltered from the impact of increased interest rates, they are unlikely to remain in that position much longer. According to the Bank of Canada, almost all borrowers will see an increase in mortgage interest costs over the next three years, and the Bank’s data suggests that holders of fixed rate mortgages will see their payments increase by between 20% and 25% at their next renewal. 

        Looking at the current pressures being experienced by holders of variable rate mortgages, as well as the impact that mortgage renewals will have in the near future on holders of fixed rate mortgages, the Financial Consumer Agency of Canada (FCAC – a federal agency whose responsibilities include protecting the rights and interests of consumers of financial products and services and supervising federally regulated financial entities, such as banks) determined that new measures were needed to address both current and upcoming risks. Those measures outline the expectations of the FCAC with respect to mortgage lending practices by federally regulated financial institutions (which would include all major lenders – a full listing can be found at https://www.osfi-bsif.gc.ca/Eng/wt-ow/Pages/wwr-er.aspx?sAll= 1), in situations in which homeowners can be characterized as “consumers at risk” with respect to their mortgage payment obligations. For purposes of the new guidelines, “consumers at risk” means those who have variable rate mortgages and whose payments (or the portion of their payments allocated to interest charges) have increased materially, or who may be facing negative amortization, or those who have fixed rate mortgages which will be up for renewal in the near future and who are also facing a material increase in payments.

        Where a homeowner is facing a material increase in mortgage payments, or negative amortization, the FCAC’s expectation is that the financial institution holding that mortgage will provide temporary mortgage relief in the following specific ways:

        • waiving prepayment penalties where such a homeowner makes a lump sum payment to avoid negative amortization, or sells their principal residence;
        • waiving, for a limited period, internal fees or costs which would otherwise be charged when mortgage relief measures are activated: and
        • ensuring, for a limited time, that where mortgage relief measures result in negative amortization no interest is charged on interest which has been added to mortgage principal.

        Where homeowners fall short or fall behind in meeting their mortgage payment obligations, the longer-term financial repercussions – in the form of higher interest rates charged on future borrowings, or a negative impact on the homeowner’s credit rating, or both – can be significant. The new guidelines address both of those risks, as follows:

        • at the time of mortgage renewal, the homeowner should not be offered a less advantageous interest rate based on the homeowner’s inability to adjust his or her mortgage agreement, or to qualify with other lenders; and
        • where mortgage relief measures are provided, and the new arrangements include the ability to make a late payment or be delinquent on the mortgage generally, those late payments or that delinquency should not be reflected on the homeowner’s credit report.

        Where homeowners run into difficulty with paying their mortgage, one of the relief measures which can be provided is to extend the time period over which the mortgage must be repaid – the amortization period. While an extension of the amortization period will mean lower payments, those lower payments also mean that more interest will be paid over the life of the mortgage and, of course, that it will take longer before the homeowner is mortgage-free.

        Extension of the amortization period of a mortgage is one of the relief measures set out in the new guidelines. However, those guidelines also impose specific steps to be taken by the financial institution which provides the extended amortization. Any such extension must be for the shortest period possible, and the financial institution is expected to work with the homeowner to develop a plan which:

        • ensures that the total amortization period is reasonable;
        • includes information about options to restore the amortization to its original period; and
        • includes an assessment and communication of the potential long-term, negative financial implications of the change in the amortization period.

        Finally, where any mortgage relief measures are provided, the onus is on the financial institution to provide specific information to the homeowner before implementing any such measures. That information must include:

        • the outstanding amount owing on the original credit agreement for the mortgage before the mortgage relief measures take effect;
        • the impact of the mortgage relief measures on the total cost of servicing the mortgage, in dollar figures, as well as the remaining amortization (or repayment) period after the relief measures take effect;
        • the new payment amount, due date, and frequency;
        • the new interest rate and type (that is, fixed or variable); and
        • the date on which the changes will take effect.

        The new guidelines expect financial institutions to proactively monitor their clients to permit early identification of signs of financial stress, and to proactively contact consumers at risk regarding possible mortgage relief measures. However, consumers who are at risk of falling into default on their mortgage obligations are well-advised to also be proactive in contacting their financial institution where mortgage relief is needed – armed with knowledge of the kinds of relief which can be provided, and on what terms.

        Detailed information on the new mortgage relief guidelines is available on the federal government website at https://www.canada.ca/en/financial-consumer-agency/services/industry/commissioner-guidance/mortgage-loans-exceptional-circumstances.html.

        Tax planning for year-end charitable donations (November 2023)

        November 28, 2023

        Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit for qualifying donations made and, 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, however, another reason to ensure donations are made by December 31. The credit provided by the federal government is a two-level credit, in which the percentage credit claimable increases with the amount of donation made. For federal tax purposes, the first $200 in donations is eligible for a non-refundable tax credit equal to 15% of the donation. The credit for donations made during the year which exceed the $200 threshold is, however, calculated as 29% of the excess. Where the taxpayer making the donation has taxable income (for 2023) over $235,675, charitable donations above the $200 threshold can receive a federal tax credit of 33%.

        As a result of the two-level credit structure, the best tax result is obtained when donations made during a single calendar year are maximized. For instance, a qualifying charitable donation of $400 made in December 2023 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 2023 and January 2024, the total credit claimable is only $60.00 ($200 times 15% plus $200 times 15%), and the 2024 donation can’t be claimed until the 2024 return is filed in April of 2025. 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. So, if donations made in 2023 don’t reach the $200 level, it’s usually worth holding off on claiming the donation and carrying forward to the next year in which total donations, including carryforwards, are over that threshold. Of course, this also means that donations made but not claimed in any of the 2018, 2019, 2020, 2021, or 2022 tax years can be carried forward and added to the total donations made in 2023, and the aggregate then claimed on the 2023 tax return.

        When claiming charitable donations, it’s possible to combine donations made by oneself and one’s spouse and claim them on a single return. Generally, and especially in provinces and territories which impose a high-income surtax – currently, Ontario and Prince Edward Island – it makes sense for the higher income spouse to make the claim for the total of charitable donations made by both spouses. Doing so will reduce the tax payable by that spouse and thereby minimize (or avoid) liability for the provincial high-income surtax.

        Regardless of when a charitable donation is made, 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 world events like wars, famines, 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.

        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, and 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, the countries in which it operates, the nature of its charitable activities, and details of its revenues and expenses, all of which can help a would-be donor to determine whether or not to make a donation.

        Detailed information on calculating and claiming a charitable donations tax credit is available on the same website at Giving to charity: Information for donors – Canada.ca.

        Planning for home office expense claims for 2023 (November 2023)

        November 28, 2023

        When the pandemic struck in March of 2020 and public health lockdowns were imposed, virtually all Canadian employees were required to work from home, most for the first time.

        In the nearly four years since then, the work landscape has shifted, as many employees continue to work entirely from home, some have returned to the office full-time, and many, perhaps most, now utilize some kind of hybrid arrangement, dividing their work week between their employer’s work site and a home office.

        As the necessity and availability of work-from-home arrangements changed (and changed again) over the past four years, the tax rules governing 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 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 essentially mandatory in 2020, the federal government greatly simplified the rules governing those claims, to provide for a temporary flat-rate method which eliminated the requirement for documentation of home office costs. That flat-rate method was available (with some variations) during 2020, 2021 and 2022, but cannot be used for home office expenses claims for 2023.

        For 2023, 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 using the detailed method which will apply to such claims during 2023.

        In order to claim a deduction for costs related to a work from home space using the detailed method, an employee must meet at least one of the following conditions.

        • The employee worked from home during the year as a consequence of the pandemic (including employees who were given a choice and elected to work from home); or
        • The employee was required by their employer to work from home during the year (this can be just a verbal or written agreement between employer and employee).

        In addition, at least one of the following criteria must also be satisfied in order to claim work from home costs under the detailed method.

        • 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 meeting clients, customers, or other people in the course of their employment duties.

        Once these threshold 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, 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 workspace is not a separate room but is a shared 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 CRA 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 using the detailed method. Each such employee must obtain either a T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19 – Canada.ca or T2200 Declaration of Conditions of Employment – Canada.ca. On those forms, 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.

        For the many taxpayers who were able to avail themselves of the simplified method for claiming a deduction for home office expenses in 2020, 2021, or 2022, the upcoming filing season for returns for 2023 may be the first time they encounter the rules and requirements which govern claims for home office expenses using the traditional detailed method. It would, therefore, be advisable to do some upfront planning to determine whether a deduction claim can be made for 2023 and to ensure that any record keeping needed to support that deduction is done before tax filing season arrives a few months from now.

        Deadline extended for filing of underused housing tax returns for 2022

        November 18, 2023

        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, or Canadian citizens or permanent residents who own residential property as a member of a partnership or as a trustee, or corporations which are incorporated outside of Canada.

        Property owners who own an affected property at the end of the calendar year must file a return and pay any tax owing for each such property on or before the following April 30. The Canada Revenue Agency (“CRA”), however, recently announced that the deadline for filing such returns for the 2022 calendar year has been extended to April 30, 2024. Consequently, affected owners of residential property in Canada must file a separate UHT return by April 30, 2024, for each property owned on December 31 of the 2022 and 2023 calendar years, in order to avoid penalties and interest.

        The news release announcing the extension can be found on the CRA website at Government of Canada extends deadline for homeowners to file their Underused Housing Tax return – Canada.ca, and detailed information on the tax itself is available on the same website at Who must file a return and pay the tax – Underused Housing Tax (UHT) – Canada.ca.

        CRA announces Canada Pension Plan contribution amounts for 2024

        November 10, 2023

        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 changes which will create a second level of contributions for higher income individuals.

        First level (CPP1) contributions will be made by individuals earning between $3,500 and $68,500. Employee and employer CPP1 contribution rates for 2024 remain at 5.95%, and the maximum contribution will be $3,867.50 for each of the employer and employee. The contribution rate for self employed individuals, who pay both the employer and employee contributions, will remain at 11.90%, and the maximum contribution will be $7,735.00.

        Second level (or CPP2) contributions will be made by individuals on income for the year between $68,500 and $73,200. Employee and employer CPP2 contribution rates for 2024 will be 4.00%, and the maximum contribution will be $188.00 each. As is the case with CPP1 contributions, self-employed individuals will pay both the employer and employee contributions, meaning that they will pay 8.00% of income between $68,500 and $73,200, or a maximum CPP2 contribution of $376.00.

        Details of the contribution structure and amounts for 2024 are outlined in a CRA Tax Tip, which can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/maximum-pensionable-earnings-contributions-2024.html.

        Temporary exemption from carbon tax on purchases of home heating oil

        November 4, 2023

        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 federal government indicated that a $250 incentive payment would be provided to low- and median-income households that switch their heating source from heating oil to heat pumps. Average cost heat pumps will also be provided free of charge to low- to median-income Canadian households in provinces and territories that have agreed to support the delivery of the federal Oil to Heat Pump Affordability grants, which will be increased from $10,000 to $15,000.

        Details of the new measures are outlined in a Backgrounder which can be found on the Finance Canada website at https://www.canada.ca/en/department-finance/news/2023/10/lowering-energy-bills-for-canadians-across-the-country.html.

        About Expert Fiscaliste

        Quebec RL-31

        Expert Fiscaliste provides income tax preparation and consulting services to individuals, businesses, with real estate residential operations in Quebec.

        If you want to take advantage of our services for your Tax Returns Give us a call at 514-954-9031, or visit our Contact Tax Experts page

        2023 Q3 Corporate Newsletter

        Please find the 2023 Q3 Corporate Newsletter on proposed Changes to the Alternative Minimum Tax.

        http://www.expert-fiscaliste.org/wp-content/uploads/2023/12/Issue65-Corporate.pdf

        About Expert Fiscaliste

        Save Your Tax

        Expert Fiscaliste provides Canadian and international income tax preparation and consulting services to corporations, businesses, individuals, and trusts.

        If you want to take advantage of our services for your Tax Return. Give us a call at 514-954-9031, or visit our Contact Tax

        2023 Q4 Corporate Newsletter

        Please find the 2023 Q3 Corporate Newsletter on Brief Introduction to GST/HST.

        About Expert Fiscaliste

        Save Your Tax

        Expert Fiscaliste provides Canadian and international income tax preparation and consulting services to corporations, businesses, individuals, and trusts.

        If you want to take advantage of our services for your Tax Return. Give us a call at 514-954-9031, or visit our Contact Tax Experts page.

        2023 Q3 Personal Newsletter

        Please find the 2023 Q3 Personal Newsletter on Tax Planning for Year End.

        Including tips on when does a Hobby become a business…

        About Expert Fiscaliste

        Quebec RL-31

        Expert Fiscaliste provides income tax preparation and consulting services to individuals, and businesses in Canada and the US.

        If you want to take advantage of our services for your Tax Returns or to be your Authorized Representative Give us a call at 514-954-9031, or visit our Contact Tax Experts page

        2023 Q4 Personal Newsletter

        Please find the 2023 Q4 Personal Newsletter on Tax Planning for Year End.

        Including tips on Tax Planning for Year End, Family Trusts, Increase Business Expenses, Tax Loss Selling, Final RRSP Contribution, Deadlines, and more…

        About Expert Fiscaliste

        Quebec RL-31

        Expert Fiscaliste provides income tax preparation and consulting services to individuals, and businesses in Canada and the US.

        If you want to take advantage of our services for your Tax Returns or to be your Authorized Representative Give us a call at 514-954-9031, or visit our Contact Tax

        2022 Notice of Assessment

        Notice of Assessment
        Call 514-954-9031

        Notice of Assessment (NoA) is sent to you after the Canada Revenue Agency (CRA) or Revenu Quebec (RQ) has completed a assessment of your filed tax return.  This document is very important to you, and should be reviewed with your tax return filed.  You only have (90) days to file an Notice of Objection if you want to dispute a Notice of Assessment or Notice of determination.  Failure to file can limit you rights!  

        Why are Notices of Assessment so important

        Not only to they provide very important information that the the government has received your tax returns, they provide confirmations that they either have currently have accepted the facts of what you have filed or an explanation of changes that they have made.  If you don’t understand the change it’s the perfect reason to have a Authorized Representative to help you understand the change and you protect your rights.

        Not only does the  NOA provide the summary of your tax returns it also starts the clock for first (90) days limit to file a Notice of Objection to any changes that the government has made.  Failure not to file a Notice of Objection can restrict your rights to challenge the changes made in the assessment.    Another good reason to have a Authorized Representative to file the Notice of Objection to make sure your rights are protected.  

         Your tax Notice of Assessment (NoA) may also includes carry forward amounts that you can include on your next year’s tax return, such as unused tuition and education credits and capital losses. Be sure to keep your Notice of Assessment in a safe place to refer to when your returns are prepared next year. 

        It’s very common for Banks, foreign governments, and other third parties may request your Notice of Assessment as proof of residence, taxable income, and for other reasons.

        For more information on Notice of Assessment visit this page Notice of Assessment – Expert Fiscaliste (expert-fiscaliste.org)

        About Expert Fiscaliste

        Quebec RL-31

        Expert Fiscaliste provides income tax preparation and consulting services to individuals, and businesses in Canada and the US.

        If you want to take advantage of our services for your Tax Returns or to be your Authorized Representative Give us a call at 514-954-9031, or visit our Contact Tax

        Share this:

        2023 October Tax News

        Table of Contents

          CRA issues Tax Tip on reporting of cryptocurrency holdings and transactions

          October 27, 2023

          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 recently issued a Tax Tip for such taxpayers, outlining the record keeping and reporting obligations which must be met.

          The Tax Tip, which can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/crypto-asset-exchanges-records-obligations-responsibilities.html, notes that crypto-asset exchanges may stop operations without notice, leaving clients without access to transaction records. The CRA recommends that such information – including trades (buy, sell, and swap), transfers (deposits and withdrawals), staking rewards, yield earnings, wallet addresses, and any other transaction information – be downloaded regularly, so that users will have information needed for tax reporting purposes.

          Year-end planning for your RRSP, RRIF, TFSA, and FHSA

          October 11, 2023

          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. There are, however, some circumstances in which an RRSP contribution must be (or should be) made by December 31 in order to achieve the desired tax result. 

          Similarly, most Canadians who have opened a registered retirement income 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. 

          The rules around TFSAs are more flexible, but it is nonetheless the case that advantages can be obtained (and disadvantages avoided) by carefully timing TFSA withdrawals and recontributions based on the calendar year end.

          Finally, beginning in 2023, taxpayers have an additional opportunity to save on a tax-assisted basis, through the new First Home Savings Account (FHSA). While saving through an FHSA is possible only for those who have not owned a home in the current or any of the four previous years, the FHSA offers qualifying taxpayers the opportunity to reduce taxes payable to an extent not available through other government-sanctioned tax saving or deferral programs.

          While the basic rules with respect to contributions to and withdrawals from each of these tax-assisted savings plans are relatively straightforward, there are nonetheless benefits to be obtained from careful consideration of the detailed rules – and some exceptions from those rules. What follows is an outline of steps which should be considered, before the end of the 2023 calendar year, by Canadians who have an RRSP, RRIF, TFSA, or FHSA – or maybe all four.

          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 his or her spouse’s name and claim the deduction for the contribution on his or her own return. When the funds are withdrawn by the spouse, the amounts are taxed as the spouse’s income, at a (presumably) lower tax rate. However, the benefit of having withdrawals taxed in the hands of the spouse is available only where the withdrawal takes place no sooner than the end of the second calendar year following the year in which the contribution is made. Therefore, where a contribution to a spousal RRSP is made in December of 2023, the contributor can claim a deduction for that contribution on his or her return for 2023. The spouse can then withdraw that amount as early as January 1, 2026 and have it taxed in his or her own hands. If the contribution isn’t made until January or February of 2024, the contributor can still claim a deduction for it on the 2023 tax return, but the amount won’t be eligible to be taxed in the spouse’s hands on withdrawal until January 1, 2027. It’s an especially important consideration for couples who are approaching retirement who 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 2023

          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 2023

          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, and neither the original contribution nor the investment gains will be taxable when the funds are withdrawn from the TFSA.

          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 maximum contribution for 2023 is $6,500. As well, where an amount previously contributed to a TFSA is withdrawn from the plan, that withdrawn amount can be re-contributed, 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, 2023 will have the amount which is withdrawn added to their TFSA contribution limit for 2024, which means it can be re-contributed, where finances allow, as early as January 1, 2024. If the same taxpayer waits until January of 2024 to make the withdrawal, they won’t be eligible to recontribute the funds withdrawn until 2025.

          Contributing to an FHSA

          The First Home Savings Account (FHSA) program, which became available to taxpayers beginning in 2023, offers qualifying taxpayers significant tax benefits. The FHSA program allows taxpayers who do not currently own a home (and did not own a home in any of 2019, 2020, 2021, or 2022) to contribute up to $8,000 per year to an FHSA. Each qualifying taxpayer can contribute up to a lifetime total of $40,000 to an FHSA.

          Contributions made to an FHSA are deductible from income, and investment income earned by funds inside an FHSA is not taxed as earned. Finally, where funds are withdrawn to purchase a home, both the original contributions made and investment income earned are received by the taxpayer free of tax.

          The ability to contribute up to $8,000 per year to an FHSA does not depend on the taxpayer’s income, and contributions not made in a calendar year can (subject to a maximum of $8,000 in carryforward amounts, and to the $40,000 lifetime limit) be carried forward and made in a future tax year.

          Where an individual has opened and contributed to an FHSA, he or she has up to 15 years to withdraw those funds tax-free and use them to purchase a home. However, taxpayers who have an FHSA also have the option to transfer funds from that FHSA plan to their RRSP (and vice-versa), without immediate tax consequences.

          For taxpayers who qualify, the new FHSA program offers an unparalleled degree of flexibility to save on a tax-free or tax-deferred basis. Details on the FHSA program can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html.

          The approach of the calendar year end doesn’t usually prompt Canadians to consider the details of making contributions to an RRSP or FHSA, 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 CPP post-retirement benefit – deciding whether to continue contributing (October 2023)

          October 11, 2023

          One or two generations ago, retirement was an event. Typically, an individual would leave the work force completely at age 65 and begin collecting Canada Pension Plan (CPP) and Old Age Security (OAS) benefits along with, in many cases, a pension from an employer-sponsored registered pension plan.

          Transitioning into retirement is now much more of a process than an event – often a complex process involving decisions around both finances (present and future) and one’s desired way of life. It’s now the case that almost every individual’s retirement plans look a little different than anyone else’s. Some will take a traditional retirement of moving from a full-time job into not working at all, while others may stay working full-time past the traditional retirement age of 65. Still others will leave full-time employment but continue to work part-time, either out of financial need (especially over the past couple of years) or simply from a desire to stay active and engaged in the work force.

          The flexible nature of retirement plans is reflected in changes made over the past decade to Canada’s government-run retirement income programs, particularly the Canada Pension Plan. It’s possible to begin receiving CPP benefits as early as age 60 and as late as age 70, with the amount of benefit increasing with each month that receipt of benefits is deferred. Many Canadians now choose to begin receiving their CPP retirement benefits while continuing to participate in the work force, part-time or full-time.

           At one time, beginning to receive CPP retirement benefits meant that, even for those who chose to remain in the work force, no further CPP contributions were allowed. That changed in 2012 with the introduction of the CPP Post-Retirement Benefit. The availability of that benefit means that those who are aged 65 to 70 and continue to work while receiving CPP retirement benefits must decide whether or not to continue making CPP contributions. Such individuals who make the choice to continue to contribute to the Canada Pension Plan will see an increase in the amount of CPP retirement benefit they receive each month for the remainder of their lives. That increase is the CPP post-retirement benefit or PRB.

          The rules governing the PRB differ, depending on the age of the taxpayer. In a nutshell, an individual who has chosen to begin receiving the CPP retirement benefit but who continues to work will be subject to the following rules:

          • Individuals who are 60 to 65 years of age and continue to work are required to continue making CPP contributions.
          • Individuals who are 65 to 70 years of age and continue to work can choose not to make CPP contributions. To stop contributing, such an individual must fill out Form CPT30 (https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt30.html). A copy of that form must be given to the individual’s employer and the original sent to the Canada Revenue Agency. An individual who has more than one employer must make the same choice (to continue to contribute or to cease contributions) for all employers and must provide a copy of the CPT30 form to each employer.

            A decision to stop contributing can be changed, and contributions resumed, but only one such change can be made per calendar year. To make that change, the individual must complete section D of CRA Form CPT30, give one copy of the form to their employer(s), and send the original to the CRA.
          • Individuals who are over the age of 70 and are still working cannot contribute to the CPP.

          Overall, the effect of the rules is that CPP retirement benefit recipients who are still working and who are under aged 65, as well as those who are between 65 and 70 and choose not to opt out, will continue to make contributions to the CPP system and will continue therefore to earn new credits under that system. As a result, the amount of CPP retirement benefits to which they are entitled to will increase with each successive year’s contributions.

          Individuals who are currently considering whether to continue contributing the CPP will now have to take into consideration changes being made to CPP contribution rules beginning January 1, 2024.

          The basic structure of the CPP provides that anyone who is over the age of 18 and earns more than $3,500 per year must make CPP contributions equal to 5.95% of their income between $3,500 and a specified income ceiling. That income ceiling is known as the Year’s Maximum Pensionable Earnings and is set at $66,600 for 2023.

          Beginning in 2024, however, there will be two levels of required CPP contributions. Individuals who have annual income of less than the YMPE (likely to be around $70,000 for 2024) will continue to make CPP contributions of 5.95% of earnings between $3,500 and $70,000.  However, those whose earnings exceed that $70,000 income ceiling must pay 4% of those additional earnings, up to a second earnings ceiling. That second earnings ceiling – to be called the Year’s Additional Maximum Pensionable Earnings, or YAMPE – is likely be around $80,000 for 2024.

          The effect of the upcoming changes is that individuals who will have income of more than around $70,000 during 2024 must pay an additional CPP contribution of 4% of their income between $70,000 and $80,000 (in addition to the 5.95% contribution to be made on income between $3,500 and $70,000). The increased contribution will, of course, be reflected in the amount of PRB the individual receives; however, each individual will have to consider how much he or she will have to pay in additional CPP contributions and whether those increased costs are justified by the amount of any increase in future benefits. It’s important to note, as well, that anyone who chooses to continue making CPP contributions will be subject to both levels of CPP contribution requirements – it is not possible to “opt out” of making second-level CPP contributions.

          Where an individual does choose to continue making CPP contributions while working and receiving CPP retirement benefits, the amount of any CPP post-retirement benefit earned will automatically be calculated by the federal government (no application is required), and the individual will be advised of any increase in their monthly CPP retirement benefit each year. The PRB will be paid to that individual automatically the year after the contributions are made, effective January 1 of that second year. Since the federal government doesn’t have all of the information needed to make such calculations until T4s and T4 summaries are filed by the employer by the end of February, the first PRB payment is usually made in a lump sum amount, in the month of April. That lump sum amount represents the PRB payable from January to April. Thereafter, the PRB is paid monthly and combined with the individual’s usual CPP retirement benefit in a single payment.

          While the rules governing the PRB can seem complex (and certainly the actuarial calculations are), the individual doesn’t have to concern themself with those technical details. For CPP retirement benefit recipients who are under age 65 or over 70, there is no decision to be made. For the former, CPP contributions will be automatically deducted from their paycheques and for the latter, no such contributions are allowed.

          Individuals in the middle group – aged 65 to 70 – will need to make a decision about whether it makes sense in their individual circumstances (and considering the possible impact of the additional contribution requirements which will take effect in 2024) to continue making contributions to the CPP.  To assist in that decision, the Canada Revenue Agency provides a very helpful online calculator which enables individuals to obtain an estimate of the amount of PRB which they will receive. That calculator is available on the CRA website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html.

          As well, while every situation is different, there are some general rules of thumb which will be useful in determining whether or not to continue making contributions to the CPP. Generally speaking, continuing to contribute makes the most sense for individuals whose current CPP retirement pension is significantly less than the maximum allowable benefit (which is, for 2023, $1,306.57 per month), as making such contributions will mean an increase in the individual’s CPP retirement benefit each month for the rest of their life. Conversely, for individuals who are already receiving the maximum CPP retirement benefit, or even close to it, there is likely insufficient benefit to be derived from continuing to contribute (especially for those who will be subject to the additional contribution amount requirements beginning in 2024, or who are self-employed and must therefore pay both the employer and employee contribution amounts). 

          More information on the PRB generally is available on the CRA website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement.html.

          Year-end planning for medical expense claims (October 2023)

          October 11, 2023

          While our health care system is currently struggling with a number of significant problems, Canadians are nonetheless fortunate to have a publicly funded health care system, in which most major medical expenses are covered by government 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 medical expense tax credit to help offset out-of-pocket medical and para-medical costs which must be incurred.

          The bad news for such individuals is that while a tax credit is available, the computation of eligible expenses and, in particular, determining when a claim for the credit should be made can be confusing. In addition, the determination of which expenses qualify for the credit and which do not isn’t necessarily intuitive, nor is the determination of when it’s necessary to obtain prior authorization from a medical professional in order to ensure that the planned expenditure will qualify for the credit. 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 from a medical professional. 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 basic rule is that the total cost of qualifying medical expenses (a lengthy list of which can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return.html) which exceed 3% of the taxpayer’s net income, or $2,635, whichever is less, can be claimed for purposes of the medical expense tax credit on the taxpayer’s return for 2023.

          Put in more practical terms, the rule for 2023 is that any taxpayer whose net income is less than $87,835 will be entitled to claim medical expenses that are greater than 3% of their net income for the year. Those having income of $87,835 or more will be limited to claiming qualifying expenses which exceed the $2,635 threshold.

          The other aspect of the medical expense tax credit which can cause some confusion is that it’s possible to claim medical expenses which were incurred prior to the current tax year but weren’t claimed on the return for the year that the expenditure was made. The actual rule is that the taxpayer can claim qualifying medical expenses incurred during any 12-month period which ends in the current tax year, meaning that each taxpayer must determine which 12-month period ending in 2023 will produce the greatest amount eligible for the credit. That determination will obviously depend on when medical expenses were incurred so there is, unfortunately, no universal rule of thumb which can be used.

          Medical expenses incurred by family members – the taxpayer, their spouse, and children who are under the age of 18 at the end of 2023, as well as certain other dependent relatives – can be added together and claimed by one member of the family. In most cases, it’s best, in order to maximize the amount claimable, to make that claim on the tax return of the lower-income spouse, where that spouse has tax payable for the year equal to at least the amount of the medical expense tax credit 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 2023, as well as those paid during 2022 and not claimed on the 2022 return. Once those totals are known, it will be easier to determine whether to make a claim for 2023 or to wait and claim 2023 expenses on the return for 2024. And, if the decision is to make a claim for 2023, 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 2024. 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 2023, where that means they can be included in 2023 totals and claimed on the return for this year.

          Increase in Old Age Security benefits for October to December 2023

          October 7, 2023

          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 to the Consumer Price Index.

          During the fourth quarter, the maximum monthly OAS payment for recipients under the age of 75 will be $707.68, while the maximum monthly payment to those age 75 and older is set at $778.45.

          Details of these and other benefits during the fourth quarter of 2023 can be found on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.

          Employment Insurance premium rates for 2024

          October 7, 2023

          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 result of indexation, maximum insurable earnings will increase to $63,200. The premium rate will be $1.66 per $100 of insurable earnings, meaning that the maximum employee premium for the year will be $1,049.12. Maximum premiums payable by employers (who pay 1.4 times the employee rate) are set at $1,468.77 per employee for 2024.

          The announcement of the premium rates and maximum insurable earnings for 2024 can be found on the federal government website at https://www.canada.ca/en/employment-social-development/news/2023/09/canada-employment-insurance-commission-confirms-2024-employment-insurance-premium-rate.html.

          About Expert Fiscaliste

          Quebec RL-31

          Expert Fiscaliste provides income tax preparation and consulting services to individuals, businesses, with real estate residential operations in Quebec.

          If you want to take advantage of our services for your Tax Returns Give us a call at 514-954-9031, or visit our Contact Tax Experts page

          2023 September Tax News

          Table of Contents

            Coming clean with the tax authorities – the Voluntary Disclosure Program (September 2023)

            September 27, 2023

            The Canadian tax system is a “self-assessing system” which relies heavily on the voluntary co-operation of taxpayers. Canadians are expected (in fact, in most cases, required) to complete and file a tax return each spring, reporting income from all sources, calculating the amount of tax owed, and remitting that amount to the federal government on or before April 30. And while it’s doubtful that anyone does so with any great degree of enthusiasm, each spring tens of millions of Canadians do sit down to complete that return (or, more often, they pay someone else to do it for them).

            Whether they do it themselves or have the return prepared for them, the rate of compliance among Canadian taxpayers is very high – between February 6 and August 27, 2023, just under 31 million individual income tax returns were filed with the Canada Revenue Agency. Inevitably, however, there are those who do not meet their filing or payment obligations.

            There are a lot of reasons why some Canadians don’t file their returns, or don’t file returns which are accurate and complete, or don’t pay their taxes on a timely basis. Sometimes, that failure to timely file is based on a lack of understanding of how our tax system works, or on incorrect information about that system. In other instances, taxpayers simply don’t have the funds needed to pay the amount of tax owing and decide (incorrectly) that if they can’t pay their tax bill, in whole or in part, the best course of action is to not file a return. Finally, each year there are some Canadians who file returns in which (inadvertently or purposefully) income amounts are underreported and/or deductions or credits to which that taxpayer is not entitled are claimed.

            While the overall percentage of taxpayers who don’t file or pay on time, or who file returns which are not accurate, isn’t high, there are a lot of such returns when measured by absolute numbers. And although each such instance of non-compliance represents lost revenue to the Canadian government, the resources needed to track down each and every instance of non-compliance simply aren’t available, especially since in many cases the amount recovered may be less than the costs which must be incurred to recover that amount.

            With all of that in mind, several years ago the Canada Revenue Agency (CRA) instituted a program – the Voluntary Disclosure 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 some other interest charges, some penalties which would normally be imposed, and the risk of criminal prosecution.

            To qualify for relief under the VDP, an application made with respect to non-compliance with income tax filing and payment obligations must:

            • be voluntary (meaning that it is done before the CRA initiates any enforcement action related to the information to be disclosed);
            • be complete;
            • involve the application or potential application of a penalty;
            • include information that is at least one year past due; and
            • include payment of the estimated tax owing.

            The VDP program includes two separate “tracks” for income tax disclosures – the Limited Program and the General Program – and the kind and extent of relief available depends on the track to which a particular application is assigned.

            While the CRA will 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 applications disclose non-compliance which appears to include intentional (as distinct from inadvertent) conduct on the part of the taxpayer or a degree of carelessness 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 there has been deliberate or wilful default or carelessness amounting to gross negligence on the part of the taxpayer; and
            • whether the disclosure was made after the taxpayer became aware of the CRA’s intended specific focus on that particular area of taxpayer compliance.

            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 exempt 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 – that is, for the years preceding the three most recent years of returns required to be filed. For example, a taxpayer who makes an application to the VDP and who has failed to file returns for the 2016 through 2021 taxation years may be provided with interest relief with respect to taxes owed for the 2016, 2017, and 2018 taxation years. Such relief is generally equal to 50% of interest owed – in other words, the taxpayer will be required to pay only half of the interest charges which would otherwise be levied for those years. No interest relief will, however, be provided on tax amounts owed for the three most recent (2019, 2020, and 2021) taxation years. Since interest charges levied by the CRA are, by law, higher than current commercial rates (for instance, the rate levied for the third quarter of 2023 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 decided to move forward with an application to the VDP can complete a Form RC199 Voluntary Disclosures Program Application, which is available on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc199.html. Once the application is received, the CRA will check to make certain that the applicant is eligible to apply and that all of the required information and documentation and the payment have been sent. The next step is for the CRA to evaluate the application to ensure that the criteria for participation in the VDP are satisfied and, if so, to determine the program (Limited or General) to which the application should be assigned, and the taxation year(s) for which relief is being considered. At each step the taxpayer will be provided with written notice of the CRA’s decisions. The CRA’s advice is that taxpayers should contact them (for individual taxpayers, by calling the Individual Income Tax Enquiries line at 1-800-959-8281) if more than five weeks have passed since the application was submitted and no response has yet been received.

            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. If that decision is also unfavourable, it is 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 his or her 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 website makes it clear that the Agency expects taxpayers who have benefitted from the VDP to thereafter meet their tax obligations, and a second review will be provided for the same taxpayer only in 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 program can be found on the CRA website at: https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/voluntary-disclosures-program-overview.html.

            Deciding when to start receiving Old Age Security benefits (September 2023)

            September 27, 2023

            The Old Age Security (OAS) program is the only aspect of Canada’s retirement income system which does not require a direct contribution from recipients of program benefits. Rather, the OAS program is funded through general tax revenues, and eligibility to receive OAS is based solely on Canadian residency. Anyone who is 65 years of age or older and has lived in Canada for at least 40 years after the age of 18 is eligible to receive the maximum benefit. For the third quarter of 2023 (July to September), that maximum monthly benefit for recipients under the age of 75 is $698.60, while benefit recipients aged 75 and older can receive up to $768.46 per month. The monthly benefit for all recipients will increase by 1.3% during the fourth quarter (October to December) of 2023. 

            For many years, OAS was automatically paid to eligible recipients once they reached the age of 65. For the past decade, however, Canadians who are eligible to receive OAS benefits have been able to defer receipt of those benefits for up to five years, 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 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.

            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 2023, that second income tax bracket begins when taxable income reaches $53,359.
            • The Canadian tax system provides (for 2023) a non-refundable tax credit of $8,396 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 $42,335.
            • Individuals can receive a GST/HST refundable tax credit, which is paid quarterly. For 2023, the full credit is payable to individual taxpayers whose family net income is less than $42,335.
            • 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 income for 2023 is more than $86,912 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 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?

            Taxpayers who were not members of an employer-sponsored pension plan during their working lives generally save for 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, and, whatever the chosen option (usually, converting the RRSP into a registered retirement income fund or RRIF, or purchasing an annuity), it will mean that the taxpayer will begin receiving income amounts from those RRSP funds in the following year. Taxpayers who have significant retirement savings in RRSPs should, in determining when to begin receiving OAS benefits, consider that they will have an additional (taxable) income amount for each year after they turn 71.

            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 and taxation of each of those income sources must be considered, and none can be considered in isolation from the others.

            Individuals who are facing that decision-making process will find some assistance on the Service Canada website. That website provides a 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; the taxpayer can obtain that information 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.

            Changes to Registered Education Savings Plans for the upcoming school year (September 2023)

            September 27, 2023

            By anyone’s measure, obtaining a post-secondary education is an expensive undertaking. Tuition and other school-related costs are just the start of the bills which must be paid. Whether the student obtains a place in a university residence or finds a place to live off campus, students (and their parents) must also budget for the cost of residence and meal plan fees, or rent and groceries. The total cost of a single year of university or college attendance away from home can easily reach $30,000 – and can significantly exceed that amount where the student is enrolled in a specialized academic program leading to a professional designation.

            Adding to the financial hit, government support for post-secondary education through our tax system has been cut back in recent years. While students can still claim a tax credit for the cost of tuition, two other related tax credits – the education tax credit and the textbook tax credit – were eliminated by both the federal government and several of the provinces in recent years.

            While there are still government-sponsored loan and grant programs which post-secondary students can access, the reality is that most families will shoulder the main financial burden of post-secondary education for their children. And many families do so through a Registered Education Savings Plan, or RESP.

            An RESP enables parents (or grandparents) to save for a child or grandchild’s post-secondary education on a tax-assisted basis. While parents or grandparents who contribute to an RESP cannot deduct contributions made from income, investment income earned by those contributed funds is not taxed as it is earned. And, where RESP contributions start early, those funds can compound, through untaxed investment earnings, for more than a decade.

            The other significant tax benefit of an RESP comes into play when the beneficiary, now a student enrolled in post-secondary education, withdraws funds to pay for his or her education. All such qualifying withdrawals made, whether of original contributions or investment income earned, are taxed in the hands of the student beneficiary. And, because most students have little or no income, it’s often the case that no tax is payable on amounts withdrawn.

            A change announced in the 2023-24 federal budget will enhance the available tax savings. The amount which a student can withdraw from an RESP is subject to limits and, as noted in the budget, those limits have not changed in 25 years, clearly not keeping pace with increases in either the cost of living or the cost of post-secondary education.

            To address that gap, the amount which a student can withdraw from an RESP has been increased, effective as of the budget date of March 28, 2023. Those changes are as follows:

            • Students who are enrolled full-time (defined as a program lasting at least three weeks and requiring at least 10 hours per week of courses or other program work) can now withdraw up to $8,000 in respect of the first 13 consecutive weeks of enrollment in a 12-month period. (The previous limit was $5,000.)
            • Students who are enrolled part-time (defined as a program lasting at least three consecutive weeks and requiring at least 12 hours per month of courses in the program) can now withdraw up to $4,000 per 13-week period. (The previous limit was $2,500.)

            The tax impact of the change can mean that a post-secondary student who lives at home during the summer, is able to find full-time employment at minimum wage during that time, and who withdraws the full $8,000 from his or her RESP, could cover about half the costs to be incurred for the upcoming school year out of income on which no federal tax is payable.

            Assume that such a student is paid $15.00 per hour, working 35 hours a week for the 16 weeks between academic years. That work will generate $8,400 in income. The RESP withdrawal of $8,000 will bring the student’s total income for the year to $16,400. For federal tax purposes, every taxpayer can earn up to $13,521 (for 2023) in annual income before any federal tax is payable. The student can, as well, claim a federal tax credit for tuition amounts paid, which will eliminate federal tax on the remaining $2,879 of income.

            Despite the best efforts of students and their parents to save for post-secondary education and to offset the costs of that education through summer jobs, the reality is that most post-secondary students do have to borrow money at some point during their post-secondary education years. The lowest-cost source of such borrowing is government student loan programs, and changes which take effect as of the 2023-24 academic year have also been made with respect to such borrowings.

            All Canada Student Loan (CSL) borrowings are subject to a weekly limit and where a student borrows funds through the CSL program, no repayment of those borrowings is required until six months after the student graduates. As announced in this year’s federal budget, and effective as of August 1, 2023, the limit on borrowings through the Canada Student Loan program was increased from $210 to $300 per week of study. Finally, effective as of April 1, 2023, all loans received through the CSL program are interest free.

            More information on the budgetary changes to the Canada Student Loan program and on changes to the rules governing Registered Education Savings Plans can be found on the federal government website at https://www.canada.ca/en/employment-social-development/corporate/notices/budget-student-aid.html and at https://www.budget.canada.ca/2023/report-rapport/tm-mf-en.html#a3.

            Repayment deadline extended for small business pandemic loans

            September 23, 2023

            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 small businesses with loans of up to $60,000.

            Program terms provided that where such loans were repaid by December 31, 2023, up to 33% of loan amounts could be forgiven. The federal government recently announced that such repayment deadline would be extended by a few weeks, and that the new deadline will be January 18, 2024. As of January 19, 2024, outstanding loans will convert to three-year term loans, subject to interest of five per cent per annum, with the term loan repayment date extended by an additional year from December 31, 2025 to December 31, 2026.

            Details of the repayment requirements and new deadlines are outlined in the federal government announcement of the extension, which can be found at https://www.canada.ca/en/department-finance/news/2023/09/canada-emergency-business-account-government-extends-repayment-and-partial-loan-forgiveness-deadlines.html.

            Third individual instalment payment of 2023 due September 15

            September 9, 2023

            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 the 2023 tax year falls on Friday, September 15. Information on the instalment payment program, available options with respect to determining the amount of instalment payment to be made, and methods for making an instalment payment can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html.

            Increase in withdrawal limits for Registered Education Savings Plans

            September 1, 2023

            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 contribute up to $50,000 per child beneficiary to an RESP. Once the beneficiary of an RESP enrols in post-secondary education, he or she can withdraw amounts from the plan, and such withdrawals are taxed in the hands of the student beneficiary. Since many students have little or no other income, they can usually withdraw the money tax-free.

            In this year’s budget, the federal government announced that the amount which a beneficiary can withdraw from his or her RESP once enrolled in post-secondary education would be increased. Effective as of March 28, 2023, that amount is increased to $8,000 (from $5,000) for full-time students and to $4,000 (from $2,500) for part-time students.

            Detailed information on RESPs can be found on the Canada Revenue Agency website at https://www.canada.ca/en/services/benefits/education/education-savings.html, and the budget announcement of the increased withdrawal limits is available on the Finance Canada site at Chapter 1: Making Life More Affordable and Supporting the Middle Class | Budget 2023 (canada.ca).

            About Expert Fiscaliste

            Quebec RL-31

            Expert Fiscaliste provides income tax preparation and consulting services to individuals, businesses, with real estate residential operations in Quebec.

            If you want to take advantage of our services for your Tax Returns Give us a call at 514-954-9031, or visit our Contact Tax Experts page

            Translate »