March 22, 2016 – Ottawa, Ontario – Department of Finance
The Minister of Finance, Bill Morneau, today tabled the new Government of Canada’s first federal budget.
Here are some highlights:
TAX MEASURES FOR INDIVIDUALS
Canada Child Benefit: New monthly tax-free payments starts July 1 to replace UCCB and other tax measures: up to $6,400 a year per child under 6, and $5,400 those aged 6 to 18. But this amount begins to claw back for households with an income over $30,000 and is eliminated entirely for incomes over $190,000.
Tax credits:Children’s arts and fitness tax credits phased out by end of 2017. But teachers get a $150 credit for teaching materials.
Elimination of Education and Textbook Tax Credits to eliminate the education and textbook tax credits, while leaving the tuition tax credit in place. Other income tax provisions that rely on eligibility for the education tax credit would be unaffected by the elimination of the credit effective January 1, 2017.
EI: Changes make it easier to qualify for benefits, and extends benefits for workers in 12 hard-hit regions. Plus: a bigger-than-expected cut in EI premiums next January.
Student grants: Increased 50%, to $3,000 for low-income and $1,200 for middle-income students.
Seniors: Guaranteed Income Supplement increased by up to $947 annually.
The cost of special clothing or footwear required for your job is not deductible. However, special clothing or footwear provided by or reimbursed by the employer will not be considered a taxable benefit to the employee under certain circumstances:
When the employer provides a distinctive uniform, or protective clothing or footwear that is designed to protect them from workplace hazards, this is not a taxable benefit.
If the employer pays an allowance to the employee for purchasing these items, and the employee is required to provide receipts, this is not a taxable benefit.
If an allowance is paid to the employee for the purchase of protective clothing, and the employee is not required to provide receipts, the amount paid will be a taxable benefit to the employee unless all of the following conditions are met:
the law requires the employee to wear the protective clothing on the work site,
the employee purchased the protective clothing, and
QUEBEC – Finance Minister Carlos Leitao tabled Quebec’s 2016-17 budget on Thursday. Here are some highlights:
Tax measures for individuals
The budget announced changes to the plan to reduce the health contribution so that it will be entirely eliminated for all taxpayers in 2018
The budget has announced the creation of a new refundable tax credit called “RénoVert”.
Starting in 2016, the refundable tax credit related to the work premium will be increased for households without children
As of 2016, the limits on donations eligible for the tax credit for donations will be eliminated and, as of 2017, the tax credit for individuals whose marginal tax rate is greater than 24% will be enhanced.
As of 2018, the age of eligibility for the tax credit for experienced workers will be 62 years.
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• 15% on the first $45,282 of taxable income, +
• 20.5% on the next $45,281 of taxable income (on the portion of taxable income over $45,282 up to $90,563), +
• 26% on the next $49,825 of taxable income (on the portion of taxable income over $90,563 up to $140,388), +
• 29% on the next $59,612 of taxable income (on the portion of taxable income over $140,388 up to $200,000), +
• 33% of taxable income over $200,000.
Tax-free savings accounts are available for Canadian residents who are 18 years of age or older. The first tax year that they were available was 2009.
There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year. However, a withdrawal in any year increases the TFSA room in the following calendar year. Thus, if you are thinking of making a withdrawal close to year end, make sure it is done by December 31st, in order to have the withdrawal amount added back to the TFSA room sooner.