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April 10, 2021
Inflation rate for February up slightly The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation for the month of February 2021. That rate stood at 1.1%, as compared to the rate ...
Federal Budget 2021-22 to be brought down in April The Minister of Finance has announced that the federal Budget for the upcoming 2021-22 fiscal year will be delivered on Monday April 19, 2021. This year’s Budget will be the first one delivered sinc...
Canada Revenue Agency locks down individual online tax accounts Over the past month, the Canada Revenue Agency (CRA) identified a large number of individual taxpayer online accounts for which user IDs and passwords had been obtained by unauthorized third parties. ...
Employment increases by 259,000 positions in February The most recent release of Statistics Canada’s Labour Force Survey shows a significant increase in employment during the month of February. During that month, employment rose by 259,000 jobs, and th...
Bank of Canada leaves interest rates unchanged As expected, the Bank of Canada announced on March 10 that no changes would be made to current interest rates. Accordingly, the Bank Rate remains at 0.5%.
In the press release announcing its decision,...
Inflation rate for January at 1% The most recent release of Statistics Canada’s Consumer Price Survey shows a slight increase in the rate of inflation for January 2021. The inflation rate for that month, as measured on a year-over-...
NETFILE service hours of availability The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2017, 2018, 2019, and 2020 tax years is now available 21 hours a day, 7 days a week. The ser...
CRA issues 2020 guide for self-employed taxpayers The Canada Revenue Agency (CRA) has issued the guide to be used by taxpayers who are reporting business or professional income, commission income, and income from farming and fishing received during 2...
CRA help line to be available Saturdays during tax filing season The Canada Revenue Agency (CRA) has announced that, beginning February 27, 2021, its Individual Tax Enquiries line will be available on Saturdays, from 9 a.m. to 5 p.m. That service is also available ...
Prescribed interest leasing rate for March The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Unemployment rate increases to 9.4% in January The most recent release of Statistics Canada’s Labour Force Survey shows a significant decline in employment during the month of January, and a corresponding increase in the overall unemployment rat...
Consultation process launched for 2021-22 federal Budget The federal government has launched the consultation process leading to the release of the 2021-22 federal Budget.
This year, there are three components to the consultation process. The government wil...
Prescribed leasing interest rate for February The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on January 20 the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 0....
CRA issues guide to employment expense deductions for 2020 The Canada Revenue Agency (CRA) has issued an updated version of Guide T4044, Employment Expenses 2020, which outlines the tax treatment of various employment expenses, and will be used by taxpayers i...
Inflation rate up in December 2020 The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate inflation rose by 0.7% during the month of December 2020, as measured on a year-over-year basis. The rate for...
CRA announces automobile benefit and deduction amounts for 2021 The Canada Revenue Agency (CRA) has released the automobile expense deduction limits and benefit rates which will apply during the 2021 taxation year.
Most of the rates and limits which applied during...
Unemployment rate up slightly in December The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of December 2020 increased to 8.6%. The comparable rate for the month of Nov...
Prescribed interest rates for 2021 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2021, as well as the rates that will apply for the purpose ...
NETFILE service for 2019 returns open until January 22, 2021 The Canada Revenue Agency’s (CRA) NETFILE service for the filing of individual income tax returns for the 2016, 2017, 2018, and 2019 taxation years will be available until Friday, January 22, 2021. ...
CRA issues 2020 income tax guide for students Post-secondary students in Canada are eligible for a range of tax credits and deductions, including a tuition tax credit, deductions for moving expenses, and a claim for qualifying student loan intere...
CRA announces new flat rate method for home office expense claims The Canada Revenue Agency (CRA) has announced that a new temporary home office tax credit may be claimable by qualifying individuals who worked from home during 2020.
Taxpayers are eligible to use thi...
Upcoming changes to CRA administrative policy on representatives The Canada Revenue Agency (CRA) permits taxpayers to designate another person, firm, or business to communicate with the CRA on the taxpayer’s behalf, where a written authorization has been provided...
December 31 deadline for tax relief applications Taxpayers may apply to the Minister of National Revenue for administrative relief from interest and penalty charges imposed or, in some cases, for permission to late-file tax elections.
In order to be...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on December 9, the Bank of Canada announced that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 0.5...
Unemployment rate down slightly in November The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment declined by 0.4% during the month of November. The unemployment rate for the month was 8.5%.
Fu...
Prescribed interest leasing rate for December The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Federal government updates deficit projection for 2020-21 On November 30, the Minister of Finance released the Fall Economic Statement, which included updated deficit projections for the current and future fiscal years.
The deficit is now projected to reach ...
Wage subsidy program extended to June 2021 The federal government has announced that the program providing a wage subsidy to eligible businesses experiencing a pandemic-related revenue loss has been extended to be available until June 2021.
Th...
Date announced for 2020 Fall Economic Statement The federal government has announced that its Fall Economic Statement for the 2020-21 fiscal year will be released on Monday November 30, 2020. The press release announcing the date and time of the St...
Inflation rate for October up slightly The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate of inflation for the month of October rose by 0.7%, as measured on a year-over-year basis. The comparable inc...
Employment Insurance premium rates for 2021 announced The federal government has released the premium rates and amounts which will apply in 2021 for purposes of the Employment Insurance (EI) program.
For 2021, the EI premium rate will be 1.58% and maximu...
CRA announces increases in retirement savings contribution limits The Canada Revenue Agency (CRA) has announced upcoming changes in the allowable contribution limits for a range of retirement savings programs.
For registered pension plans, the 2021 money purchase l...
Unemployment rate for October at 8.9% The most recent release of Statistics Canada’s Labour Force Survey shows that the overall rate of unemployment stood at 8.9% for the month of October.
While the unemployment rate for the month was l...
CRA issues updated Employer’s Guide to Taxable Benefits The tax treatment of non-monetary benefits provided by employers to their employees can vary widely. Some such benefits must be included in the employee’s taxable income for the year, while others a...
Prescribed interest leasing rate for November The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Bank of Canada leaves interest rates at current levels In its October 28 announcement, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate remains at 0.5%.
The press release announcing...
Bank of Canada releases interest rate announcement schedule for 2021 The Bank of Canada has released its schedule for policy interest rate announcements to be made during the 2021 calendar year, and that schedule is as follows:
Wednesday, January 20
Wednesday, March 10...
Inflation rate up slightly in September The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation rose 0.5% on a year-over-year basis in September, up from a 0.1% increase in August.
While pric...
Application process for Canada Recovery Benefit now open In September, the Canada Emergency Response Benefit program came to an end, and three new programs to provide financial assistance to individuals impacted by the pandemic were launched.
One of those p...
Unemployment rate down to 9% in September The most recent release of Statistics Canada’s Labour Force Survey shows that Canada’s overall unemployment rate declined by 1.2% during the month of September. For the month, that rate stood at 9...
CRA issues warning of tax scam involving debt write-offs The Canada Revenue Agency (CRA) has issued a warning to taxpayers with respect to a tax scam currently operating, which involves claims for bad debt write-offs.
While bad debts can be written off for ...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for 2020, as well as the rates that will apply for the purpose of calculating employ...
Old Age Security benefit increase for fourth quarter of 2020 The Old Age Security benefit received by Canadians over the age of 65 is indexed quarterly to changes in the Consumer Price Index.
The federal government has announced that the basic OAS benefit of $6...
Prescribed leasing interest rate for October The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the pr...
Individual tax balances for 2019 tax year due by September 30 Earlier this year, the Canada Revenue Agency (CRA) announced that the deadline for payment of individual income tax balances for the 2019 tax year, which is usually April 30, was being extended to Wed...
Unemployment rate decreases to 10.2% for August The September release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate for the month of August stood at 10.2%. That rate represented a decrease of 0.7% from the ra...
Increase announced to non-taxable meal allowance rate The federal government has announced an increase in the amount of any overtime meal allowance, or meal portion of a travel allowance, that employers can provide to employees on a non-taxable basis. Th...
CRA to contact taxpayers affected by cyberattack Earlier this month, a cyberattack on the Canada Revenue Agency (CRA) and other agencies of the federal government compromised the personal tax and financial information of approximately 5500 taxpayers...
Inflation rate for July drops to 0.1% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of July, as measured on a year-over-year basis, stood at 0.1%. The comparable rate ...
Prescribed leasing interest rate for September 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Unemployment rate for July down to 10.9% The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for July was 10.9%. The change means that the unemployment rate has fallen by 1.4 percentage poi...
Extension announced for September individual instalment payments Individual taxpayers who pay income tax by instalment are required to make four such instalment payments each year. The usual deadlines for such payments are the 15th day of March, June, September, an...
Online filing option where paper return not yet assessed by CRA The Canada Revenue Agency (CRA) has posted a notice on its website indicating that it is experiencing delays in the processing of paper-filed individual income tax returns for the 2019 taxation year.
...
CRA provides interest waiver period on tax amounts owed The Canada Revenue Agency (CRA) has announced that an interest waiver period will be provided to individual taxpayers with respect to income taxes owed.
That waiver period will run from April 1 to Sep...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on July 15, the Bank of Canada indicated that, in its view, no change to current interest rates was required. Accordingly, the Bank Rate rema...
Prescribed leasing interest rate for August 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Federal emergency wage subsidy to be available until December Canadian employers whose businesses have been affected by the pandemic may be eligible for a federal government wage subsidy – the Canada Emergency Wage Subsidy (CEWS).
The CEWS, which pays the empl...
Unemployment rate down slightly in June The most recent release of Statistics Canada’s Labour Force Survey shows a slight decline in the rate of unemployment during the month of June.
The unemployment rate for June stood at 12.3%, a decli...
Federal government projects $343 billion current-year deficit On July 8, the federal government provided an update of its fiscal position for the current (2020-21) fiscal year, taking in account expenditures made in connection with the pandemic.
That “Economic...
Supplemental OAS payment issued during first week of July Earlier this year, the federal government announced that, as part of its pandemic relief measures, recipients of Old Age Security would receive an additional one-time payment. Such payment is intended...
NETFILE service for 2019 returns still available The Canada Revenue Agency (CRA) has issued a Tax Tip reminding Canadians that its online filing services for the filing of individual income tax returns for the 2019 tax year are still open.
Such indi...
No change to basic Old Age Security benefit for third quarter 2020 The Old Age Security benefit received by Canadians over the age of 65 is indexed quarterly to changes in the Consumer Price Index.
The federal government has announced that, as the rate of inflation d...
Prescribed leasing interest rate for July 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first three quarters of 2020, as well as the rates that will apply for the p...
Canada Emergency Response Benefit program extended The federal government has announced that the Canada Emergency Response Benefit (CERB) program has been extended to be available for a further eight weeks in some circumstances.
As originally designed...
Inflation rate down by 0.4% for May The most recent release of Statistics Canada’s Consumer Price Survey shows that the rate of inflation fell by 0.4% during the month of May, as measured on a year-over-year basis.
Prices were up in f...
Prescribed interest rate for leasing for June 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Unemployment rate up slightly in May The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate rose slightly during the month of May, from 13% to 13.7%.
The StatsCan analysis indicates that une...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on June 3 the Bank of Canada, as anticipated. made no change to current rates. Accordingly, the Bank Rate remains at 0.5%.
In its announcemen...
June 15 return filing deadline for self-employed taxpayers Self-employed Canadians and their spouses must file an individual income tax return for the 2019 tax year on or before June 15, 2020.
As part of the federal government’s pandemic response plan, howe...
June 15 individual income tax instalment due date deferred Individual Canadians who pay income tax by instalments would normally be required to make the second instalment payment for this year on June 15, 2020.
The Canada Revenue Agency (CRA) has indicated, h...
CRA extends filing and payment deadlines for corporations and trusts The Canada Revenue Agency (CRA) has announced that the deadline for filing of T2 returns by corporations and T3 returns by trusts has been extended.
That announcement provides that all businesses and ...
Free tax return preparation clinics go online Each year community organizations across Canada operate a number of tax clinics at which individual income tax returns are prepared and filed free of charge to the taxpayer. Due to concerns surroundin...
CRA extends federal benefit eligibility period The benefit year for many federal benefits, like the Canada Child Benefit and the Goods and Services Tax Credit runs from July 1 to June 30. Eligibility for and the amount of such benefits are based, ...
Repaying the Canada Emergency Response Benefit The Canada Revenue Agency has issued a reminder to Canadians that there are circumstances in which the Canada Emergency Response Benefit (CERB) must be repaid.
In particular, individuals who return to...
CRA issues warning of Canada Emergency Response Benefit scam The Canada Revenue Agency (CRA) has issued an alert on its website warning Canadians of a scam operating with respect to the Canada Emergency Response Benefit (CERB). That Benefit, for which more than...
Online applications available for Canada Emergency Wage Subsidy As part of its pandemic response, the federal government is providing eligible employers with a partial wage subsidy through the Canada Emergency Wage Subsidy (CEWS) program. The CEWS program provides...
Prescribed leasing interest rate for May 2020 The prescribed leasing rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed ...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2020, as well as the rates that will apply for the purpose ...
Inflation rate down sharply for March The April release of Statistics Canada’s Consumer Price Index shows a sharp decline in the rate of inflation for the month of March. That rate stood at 0.9%, as measured on a year-over-year basis. T...
Significant increase in unemployment rate during March The most recent release of Statistics Canada’s Labour Force Survey shows a significant increase in the rate of unemployment during the month of March.
The April release of the Labour Force Survey, w...
Canada Student Loan repayments suspended until September 30, 2020 The federal government has announced that required repayments of Canada Student Loans will be suspended until September 30th, 2020.
Where payments are usually made by pre-authorized debit, such paymen...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on April 15, the Bank of Canada indicated that, in its view, no change to current interest rates was required. Accordingly, the Bank Rate rem...
Wage subsidy program to be provided to Canadian employers The federal government will be providing a wage subsidy program to eligible employers who have experienced a recent reduction in revenues of 30% or more. That program—the Canada Emergency Wage Subsi...
Application process for Canada Emergency Response Benefit now open As of April 6, 2020, Canadians can apply for the federal Canada Emergency Response Benefit (CERB), which provides eligible individuals with $500 per week for a maximum of 16 weeks.
The benefit is gene...
Federal government defers remittance of HST/GST payments The federal government will be providing businesses with an extension with respect to remittance deadlines related to goods and services tax (GST) and harmonized sales tax (HST).
The deferral will app...
Bank of Canada announces further reduction in interest rates In an unscheduled announcement made on March 27, the Bank of Canada lowered interest rates for the third time this month.
In that announcement, the Bank reduced current rates by one-half percentage po...
One-time increase in Canada Child Benefit to be provided The federal government has announced that, for the current benefit year only, the amount of Canada Child Benefit will be increased by a one-time payment of $300 per child.
The $300 additional benefit ...
Individual tax filing and payment deadlines extended The deadline for filing of most 2019 individual income tax returns, as well as payment of any balance of tax owed for the 2019 taxation year by individual taxpayers would usually be April 30, 2020. Th...
Bank of Canada reduces interest rates Citing the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent drop in oil prices, the Bank of Canada has announced a further reduction in interest rates.
The unsch...
CRA issues Tax Tip for property buyers and sellers Canadian taxpayers who buy or sell a property during the year may be subject to requirements to report that transaction on their annual return and, in some cases, to pay tax on sale proceeds.
The CRA ...
Little change in unemployment rate for February The most recent release of Statistics Canada’s Labour Force Survey shows little change in the overall unemployment rate during the month of February. That rate rose by 0.1%, to 5.6%.
During the mont...
Extended hours for CRA individual tax enquiries line The Canada Revenue Agency’s individual income tax enquiries telephone service will be available for extended hours during tax filing season. That enquiries service, which can be reached at 1-800-959...
Bank of Canada cuts interest rates In its regularly scheduled interest rate announcement made on March 4 the Bank of Canada indicated that, in its view, a reduction to current interest rates was required. Accordingly, the bank rate was...
Upcoming deadline for 2019 RRSP contributions The Canada Revenue Agency (CRA) has announced that contributions to a registered retirement savings plan (RRSP), in order to be deducted on the return for 2019, must be made on or before Monday March ...
Increase in inflation rate for January 2020 The most recent release of Statistics Canada’s Consumer Price Index shows an increase in the rate of inflation for the month of January. That rate stood at 2.4%, as measured on a year-over-year basi...
Unemployment rate down slightly for January 2020 The most recent release of Statistics Canada’s Labour Force Survey shows that that unemployment rate dropped slightly during the month of January, from 5.6% to 5.5%.
During that month, employment in...
Digital news subscription tax credit now available In the 2019 Budget, the federal government introduced a new tax credit for digital news subscription costs incurred by individuals.
That tax credit is available starting in the 2020 tax year. Individu...
Digital news subscription tax credit now available In the 2019 Budget, the federal government introduced a new tax credit for digital news subscription costs incurred by individuals.
That tax credit is available starting in the 2020 tax year. Individu...
CRA issues updated guide to students and income tax The Canada Revenue Agency (CRA) publishes a guide for post-secondary students which outlines the rules governing typical tax situations for such students. Those rules include the tax treatment of tuit...
NETFILE service for 2019 returns available February 24, 2020 The Canada Revenue Agency (CRA) has announced that the NETFILE service for online filing of individual income tax returns for the 2019 tax year will be available beginning Monday, February 24, 2020.
M...
CRA issues 2019 Individual Income Tax Return and Guide The Canada Revenue Agency (CRA) has released the Individual Income Tax Return and Guide for all provinces and territories for the 2019 tax year, and those forms and guides are posted on its website at...
Bank of Canada leaves interest rate unchanged In its regularly scheduled interest rate announcement made on January 22, 2020, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remain...
CRA announces automobile expense deduction limits for 2020 The Canada Revenue Agency has announced the rates and limits which will apply for purposes of automobile-related benefits and deductions in 2020.
Most such rates and limits are unchanged, as follows:
...
OAS payment rates for first quarter of 2020 The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the first quarter (January 1 to March 31) of 2020. OAS payments are indexed quarterly to c...
Unemployment rate down for December 2019 The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 35,000 jobs during the month of December and that the overall unemployment rate fell by 0.3%, to...
Personal tax credit amounts increased The federal government has announced that the basic personal tax credit, the spousal credit, and the eligible dependant credit amounts will increase, in four stages, from $12,298 to $15,000.
The first...
Prescribed interest rates for 2020 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2020, as well as the rates that will apply for the purpose ...
Prescribed leasing interest rate for January 2020 The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
Climate action incentive payment amounts for 2020 The federal government has announced the amounts which will be paid under the climate action incentive program during 2020. Such amounts are claimed when filing the individual income tax return for 20...
NETFILE service for prior years available until January 24, 2020 Taxpayers who have not yet filed their individual income tax returns for 2018 (or the three prior years) can file those returns on NETFILE until Friday, January 24, 2020. Until that date, the Canada R...
Economic and Fiscal Update projects increased current year deficit The 2019 Economic and Fiscal Update released on December 16 by the Minister of Finance shows a significant increase in the projected deficit for the current fiscal year.
In the 2019-20 Budget announce...
December 16 deadline for final instalment payment for 2019 Canadians who pay income tax by instalments are required to pay the fourth and final instalment payment of 2019 on or before Monday December 16, 2019.
Taxpayers subject to the instalment payment requi...
December 31 deadline for taxpayer relief applications for 2009 Under the federal government’s Taxpayer Relief Program, the Minister of National Revenue can provide relief to taxpayers from interest or penalty charges which have been assessed.
Such taxpayer reli...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on December 4, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2...
Indexing adjustment for 2020 released by CRA The Canada Revenue Agency has announced that personal income tax brackets and credit amounts for the 2020 taxation year will increase by 1.9%.
Each year, such individual income tax brackets and cred...
Inflation rate for October 2019 unchanged The most recent release of Statistics Canada’s Consumer Price Index indicates that there was no change in the rate of inflation recorded for the month of October. That rate stood at 1.9%, as measure...
CRA issues Payroll Deduction Formula guide for 2020 The Canada Revenue Agency has issued the 2020 version of Guide T4127, Payroll Deduction Formulas, which is intended for use by payroll software providers or companies which develop their own in-house ...
Upcoming CRA webinar on payroll On Wednesday November 27, the Canada Revenue Agency (CRA) will be hosting a webinar on payroll requirements for Canadian employers.
The webinar, which will start at 1:00 p.m. EST, is free of charge fo...
CRA issues 2019 guide to students and income tax The Canada Revenue Agency (CRA) has updated and re-issued its tax guide for post-secondary students.
That guide (P105, Students and Income Tax) reviews the tax treatment of common deductions and credi...
Employment Insurance contribution rates for 2020 The federal government has announced the Employment Insurance (EI) premium rates which will be levied during 2020.
For 2020, maximum insurable earnings for the year will be $54,200. The premium rate f...
No change in unemployment rate for October The most recent release of Statistics Canada’s Labour Force Survey shows that there was no change in the overall unemployment rate for the month of October 2019, with that rate remaining at 5.5%.
Am...
CRA issues employer guide to payroll deductions for 2020 The Canada Revenue Agency has issued its Employer’s Guide: Payroll Deductions and Remittances for 2020 (T4001(E)). That guide provides employers with information on the deductions which must be made...
Canada Pension Plan contribution rates for 2020 released The federal government has announced the contribution rates and amounts and maximum pensionable earnings which will apply for purposes of the Canada Pension Plan in 2020.
Employee and employer contrib...
CRA issues 2019 employer guide to taxable benefits Employers are required, by the end of February 2020, to issue T4 slips for their employees for the 2019 taxation year. Those T4s will summarize the amount of remuneration received by the employee duri...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on October 30, 2019, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate will r...
CPP contribution rate to increase January 1, 2020 As previously announced, changes are to be made to the Canada Pension Plan over the next 5 years, with the goal of increasing the amount of CPP retirement benefits available to contributors.
The next ...
Online retirement income calculator available The federal government provides a detailed online retirement income calculator which can be used by taxpayers planning retirement.
The online calculator allows users to input income amounts from vario...
No change in inflation rate for September The overall inflation rate was unchanged for the month of September, with that rate matching the 1.9% year-over-year increase posted for the month of August 2019.
The greatest contributor to the infla...
Unemployment rate down in September The most recent release of Statistics Canada’s Labour Force Survey shows a sharp increase in job creation for the month of September. During that month employment rose by 54,000, mainly in full-time...
Prescribed interest rate for leasing for November The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
2020 Employment Insurance premium rates announced The federal government has announced the Employment Insurance premium rates and amounts which will be levied during the 2020 calendar year.
For 2020, the Employment Insurance premium rate is decreased...
OAS payment rates for fourth quarter of 2019 The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the fourth quarter (October 1 to December 31) of 2019. OAS payments are indexed quarterly ...
Prescribed interest rates for 2019 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for 2019, as well as the rates that will apply for the purpose of calculating emp...
CRA updates and re-issues publication on tax audits The Canada Revenue Agency (CRA) has updated and re-issued its publication on the conduct of tax audits.
The updated publication (RC4188E)) outlines the process by which the CRA chooses a file for audi...
Prescribed interest rate for leasing for October The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
Rate of inflation at 1.9% for August The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August stood at 1.9%, as measured on a year-over-year basis.
The inflation rate ...
Federal government releases financial results for 2018-19 Finance Canada has released the Annual Financial Report of the Government of Canada for 2018-19, which provides an overview of the federal government’s financial results for the 2018-19 fiscal year ...
CRA issues tax guidance for international students Each September thousands of international students move to (or return to) Canada to attend Canadian secondary or post-secondary educational institutions.
Depending on their residency status, those stu...
Unemployment rate unchanged in August The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 81,000 positions during the month of August 2019. Notwithstanding that increase, the unemploymen...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on September 4, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at ...
Individual income tax instalment payment due September 16 Individual taxpayers who make quarterly instalment payments of tax must make the third such instalment payment for the year on or before September 15. As that date falls on a Sunday this year, payment...
Bank of Canada announces 2020 interest rate announcement schedule The Bank of Canada has released a listing of the eight dates on which it will make regularly scheduled interest rate announcements during 2020. That listing is as follows:
Wednesday, January 22
Wednes...
CRA issues warning on self-directed RRSP withdrawal schemes The Canada Revenue Agency has issued a Tax Tip warning owners of self-directed RRSPs about a current tax scheme which they may encounter.
Promoters of such schemes falsely promise owners of self-direc...
CRA issues updated guide to electronic record keeping by taxpayers The Canada Revenue Agency has updated and re-issued its Information Circular outlining the rules and requirements which apply to taxpayers who keep business and tax books and records in electronic for...
Inflation rate unchanged in July The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation recorded for the month of July was unchanged from the previous month. For both June and July, tha...
Prescribed interest rate for leasing for September The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, which includes the applicable rate for the upcoming month, as well as the rates in ...
Unemployment rate up slightly for July The most recent release of Statistics Canada’s Labour Force Survey shows a slight increase in the unemployment rate for the month of July, as measured on a year-over-year basis. For that month, the ...
CRA enhances telephone security procedures The Canada Revenue Agency (CRA) has issued a Tax Tip reminding taxpayers of the procedures which it utilizes to protect their personal information, particularly with respect to contacts between taxpay...
Third quarterly income tax instalment due September 15 Individuals who are required to pay income tax by instalments must make their third quarterly instalment for 2019 on or before September 15, 2019. As that date is a Sunday, such payments are considere...
Bank of Canada releases 2020 interest rate announcement dates The Bank of Canada has released the listing of dates on which it will make scheduled interest rate announcements during calendar year 2020.
There will be 8 such scheduled interest rate announcements d...
Mortgage stress test interest rate lowered to 5.19% Prospective mortgage borrowers in Canada are subject to a “stress test” as part of the assessment of their credit-worthiness. Under that test, such borrowers are required to qualify for a mortgage...
Inflation rate up by 2% in June The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation during the month of June 2019 stood at 2%. The comparable rate for May was 2.4%.
The decr...
Prescribed interest rate for leasing for August The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as ...
Slight increase in unemployment rate for June The most recent release of Statistics Canada’s Labour Force Survey shows that, although the unemployment rate for the month of June rose by 0.1%, employment increased by 132,000 positions during the...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on July 10, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the bank rate remains at 2%.
...
Prescribed interest rates for the first three quarters of 2019 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first three quarters of 2019, as well as the rates that will apply for th...
Increases to GST/HST credit and Canada Child Benefit payment rates July 1, 2019 is the start of the 2019-20 benefit year for many provincial and federal child and tax benefits, including the federal GST/HST credit and the Canada Child Benefit.
As of that date, the pa...
OAS payment rates for third quarter of 2019 The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the third quarter (July 1 to September 30) of 2019. OAS payments are indexed quarterly to ...
Prescribed interest rate for leasing for July The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July 2019.
The prescribed rate for July is 2.75%.
A chart showi...
Inflation rate for May at 2.4% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of May 2019, as measured on a year-over-year basis, stood at 2.4%.
Inflation during...
First-time home buyer’s incentive to launch September 2, 2019 In this year’s federal Budget, a new program was announced to benefit first-time home buyers. Under that program, the First-Time Home Buyer’s Incentive, the Canada Mortgage and Housing Corporation...
Increases to Canada child benefit effective July 1, 2019 Effective as of July 2019, the amount of Canada Child Benefit (CCB) payable to eligible Canadian families will be increased to account for inflation.
Starting with the July payment (which will be made...
Unemployment rate down slightly in May The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate recorded for the month of May. The unemployment rate for that month stood at...
Prescribed interest rates for leasing for June 2019 The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the month of June 2019.
The prescribed rate for that month will be increase...
Individual income tax instalment payment due June 17 Individual taxpayers who pay income tax by instalments must make their second instalment payment for 2019 on or before June 17, 2019.
Such taxpayers will have received an instalment notice setting out...
2018 returns for self-employed taxpayers due June 17, 2019 Self-employed taxpayers (and their spouses) have until Monday June 17, 2019 to file their income tax returns for the 2018 tax year. Returns filed after that date will be subject to late-filing penalti...
Bank of Canada maintains interest rates at current levels In its regularly scheduled interest rate announcement made on May 29, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Consequently, the Bank Rate remain...
Filing of 2018 tax return required to receive federal tax benefits The federal government and many of the provinces provide benefit programs for which both entitlement and benefit amount are based, at least in part, on the income of the recipient taxpayer. Those bene...
Overall inflation rate for April 2019 at 2% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of April stood at 2%, as measured on a year-over-year basis.
Seven of the eight maj...
CRA confirms June 17 filing deadline for self-employed taxpayers The Canada Revenue Agency (CRA) has issued a Tax Tip confirming that the filing deadline for individual income tax returns filed for the 2018 tax year by self-employed individuals and their spouses is...
Good employment news for the month of April The most recent release of Statistics Canada’s Labour Force Survey shows growth in employment during the month of April for nearly all demographic groups. The overall unemployment rate for the month...
CRA issues warning on Health Spending Account tax schemes The Canada Revenue Agency (CRA) has issued a warning about a current tax scheme involving Health Spending Accounts (HSAs) which are being marketed to small businesses. HSAs are self-insured health pla...
Canada Child Benefit rates to increase in July The federal government has announced that, effective with the July 2019 payment, Canada Child Benefit rates will increase.As of July, the maximum benefit for a child under the age of 6 will increase t...
Prescribed interest rate for leasing for May 2019 The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the month of May 2019.
The prescribed rate for that month will be reduced t...
CRA reminds flood-affected taxpayers of available relief The Canada Revenue Agency (CRA) has issued a press release reminding taxpayers who have been affected by this spring’s floods of the availability of relief with respect to their obligation to file a...
Increase in rate of inflation for March 2019 The most recent release of Statistics Canada’s Consumer Price Index shows a significant increase in the rate of inflation recorded for the month of March 2019. During that month, the CPI rose 1.9%, ...
Bank of Canada leaves interest rates unchanged The Bank of Canada, in its regularly scheduled interest rate announcement made on April 24, determined that no change was needed to current rates. The Bank Rate therefore remains at 2%.
The press rele...
OAS rates unchanged for the second quarter of 2019 The federal government has announced the Old Age Security payment rates which will be in effect for the second quarter (April 1 to June 30) of 2019.
OAS payment rates are indexed quarterly to inflatio...
April 30 deadline for payment of 2018 individual income taxes All payments of individual income tax owed for the 2018 taxation year must be received by the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2019.
There are a number of means by which paym...
CRA issues guide to medical expense claims for 2018 The Canada Revenue Agency (CRA) has issued an updated guide to be used by taxpayers who are claiming medical expenses on their income tax returns for 2018.
Individual taxpayers are entitled to claim a...
Unemployment rate unchanged in March The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change in the overall unemployment rate for the month of March. That rate remained at 5.8%.
Employment ...
Prescribed interest rates for leasing for April The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the month April 2019.
The prescribed rate for the upcoming month is 3.1%.
A chart...
Prescribed interest rates for the first half of 2019 The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2019, as well as the rates that will apply for the purpose of cal...
CRA posts Tax Tips for students and seniors The Canada Revenue Agency (CRA) has posted a number of Tax Tips for seniors and students on its website. Those Tax Tips list and explain particular credits, deductions, or benefits which are most like...
Inflation increases by 1.5% in February The most recent release of Statistics Canada’s Consumer Price Survey indicates that the rate of inflation for the month of February, as measured on a year-over-year basis, stood at 1.5%. The compara...
Budget 2019: Adjusting the Rules for Cannabis Taxation Budget 2019 is proposing that the excise duty framework for cannabis products be amended to more effectively apply the excise duty on new classes of cannabis products, as well as to cannabis oils, whi...
Budget 2019: Expanding Health-Related Tax Relief Budget 2019 proposes to expand health-related tax relief under the Goods and Services Tax/Harmonized Sales Tax (GST/HST) system to better meet the health care needs of Canadians by:
providing GST/HST ...
Budget 2019: Employee Stock Options Budget 2019 announces the Government’s intent to limit the use of the current employee stock option tax regime and move toward aligning the tax treatment with the United States for employees of larg...
Budget 2019: Electronic Delivery of Requirements for Information Budget 2019 proposes that the Canada Revenue Agency (CRA) will be allowed to send requirements for information electronically to a bank or credit union only if the bank or credit union notifies the CR...
Budget 2019: Carrying on Business in a Tax-Free Savings Account Budget 2019 proposes that the joint and several liability for tax owing on income from carrying on a business in a TFSA be extended to the TFSA holder. The joint and several liability of a trustee of ...
Budget 2019: Mutual Funds: Allocation to Redeemers Methodology Budget 2019 proposes to introduce a new rule that would deny a mutual fund trust a deduction in respect of the portion of an allocation made to a unitholder on a redemption of a unit of the mutual fun...
Budget 2019: Medical Expense Tax Credit Amounts paid for cannabis products may be eligible for the medical expense tax credit where such products are purchased for a patient for medical purposes in accordance with the Access to Cannabis for...
Budget 2019: Supporting Donations of Cultural Property A recent court decision related to the interpretation of “national importance” has created uncertainty about the availability of these tax incentives. Budget 2019 proposes to introduce legislative...
Budget 2019: Variable Payment Life Annuities Budget 2019 proposes to amend the tax rules to permit PRPPs and defined contribution RPPs to provide a variable payment life annuity (VPLA) to members directly from the plan. A VPLA will provide payme...
Budget 2019: Advanced Life Deferred Annuities Budget 2019 proposes to amend the tax rules to permit an advanced life deferred annuity (ALDA) to be a qualifying annuity purchase, or a qualified investment, under certain registered plans. An ALDA w...
Budget 2019: Modernizing the Home Buyers’ Plan (HBP) Budget 2019 proposes to increase the Home Buyers’ Plan (HBP) withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019. Budget 2019 also proposes to extend acces...
Budget 2019: Canada Training Credit Budget 2019 proposes this new, non-taxable credit that would help Canadians pay for training fees. Every year, eligible workers between the ages of 25 and 64 would accumulate a credit balance of $250 ...
Budget 2019: Strengthening Canada’s International Tax Rules Budget 2019 proposes to:
extend the foreign affiliate dumping rules in the Income Tax Act to prevent a corporation resident in Canada that is controlled by a non-resident individual or trust from redu...
Budget 2019: Strengthening Beneficial Ownership Transparency In Budget 2019, the Government proposes further amendments to the Income Tax Act to make the beneficial ownership information maintained by federally incorporated corporations more readily available t...
Budget 2019: Character Conversion Transactions Budget 2019 proposes an amendment that introduces an additional qualification for the commercial transaction exception in the definition “derivative forward agreement” as the exception applies to ...
Budget 2019: Improving Support for Small, Growing Companies Budget 2019 proposes to repeal the use of taxable income as a factor in determining a CCPC’s annual expenditure limit for the purpose of the enhanced SR&ED tax credit. As a result, small CCPCs w...
Budget 2019: Small Business Deduction - Farmers and Fishers Budget 2019 proposes to eliminate the requirement that sales be to a farming or fishing cooperative corporation in order to be excluded from specified corporate income. As such, this exclusion will ap...
Budget 2019: Support for Canadian Journalism Budget 2019 proposes to introduce three new tax measures to support Canadian journalism:
allowing journalism organizations to register as qualified donees;
a refundable labour tax credit for qualifyin...
Unemployment rate unchanged in February The most recent release of Statistics Canada’s Labour Force survey shows that, while the rate of unemployment for the month of February was unchanged, employment grew by 56,000 positions. The unempl...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on March 6, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2%
I...
Inflation down to 1.4% for January 2019 The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows a drop in the rate of inflation for the month of January. That rate, as measured on a year-over-year basis, was 1.4%. ...
First instalment payment of 2019 due March 15 The first instalment payment of individual income taxes for the 2019 tax year is due on or before Friday March 15, 2019. Individuals who have previously paid tax by instalments will have received an i...
CRA providing extended hours for individual tax help line The Canada Revenue Agency (CRA) has announced that its Individual Income Tax Enquiries line (1-800-959-8281) is now available for extended hours.
Until April 30, 2019, telephone agents will be availab...
Date announced for 2019-20 federal Budget The Minister of Finance has announced that the 2019-20 federal Budget will be brought down on Tuesday, March 19, 2019.
Once the Budget is released, at around 4 p.m., the Budget Papers will be posted o...
Obtaining a 2018 tax return form and guide The 2018 T1 Individual Income Tax Return and Guide package is now available on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packag...
NETFILE available for filing of 2018 individual income tax returns The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns is available as of Monday, February 18, 2019.
The current NETFILE service (which ...
CRA issues tax filing tips for students The Canada Revenue Agency (CRA) has issued a Tax Tip for post-secondary students and graduates who will be filing an income tax return for the 2018 tax year.
That Tax Tip, which can be found on the CR...
Small increase in unemployment rate for January During the month of January, the number of people employed in Canada rose by 67,000, with that figure attributable for most part to increased employment of those aged 15 to 24 and those working in the...
Prescribed interest rate for leasing The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of March 2019.
That prescribed rate for the month of March will be...
CRA issues tax filing tips for seniors The Canada Revenue Agency (CRA) has posted a Tax Tip which lists the tax deductions and credits which are most relevant to seniors, and which can be claimed by eligible seniors when preparing and fili...
NETFILE service for 2018 returns available February 18 The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns for the 2018 tax year will be available online on Monday February 18, 2019. The N...
Upcoming changes to the CRA’s e-mail service Effective as of February 11, 2019, the Canada Revenue Agency (CRA) will be merging its online mail and account alerts services. Notification of the change is being sent to users of those services, and...
Pre-Budget consultations ending on January 29 Finance Canada has issued a reminder that the current consultation process with respect to the upcoming 2019-20 federal Budget will end on Tuesday, January 29, 2019.
Interested stakeholders can make t...
Inflation rate increases to 2% in December The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation, as measured on a year-over-year basis, stood at 2% during the month of December 2018. The equiva...
Finance announces automobile allowance limits and rates for 2019 Finance Canada has announced the automobile deduction limits and expense benefit rates which will apply to businesses and their employees during the 2019 taxation year.
Most of the limits which applie...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on January 9, 2019, the Bank of Canada indicated that no change would be made to current interest rates. The Bank Rate therefore remains at 2...
Prescribed interest rates for leasing for January and February The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the months of January and February 2019.The prescribed rate for January is ...
Prescribed interest rates for the first quarter of 2019 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2019, as well as the rates that will apply for the purpo...
Canada Pension Plan changes to take effect January 1, 2019 Over the next seven years, significant changes will be made to the Canada Pension Plan. Those changes will result, overall, in an increase of about 50% in the maximum retirement benefit.
The first suc...
Inflation for November down to 1.7% The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of November, as measured on a year-over-year basis, stood at 1.7%. The comparable r...
NETFILE service for prior years available until January 25, 2019 Taxpayers who have not yet filed their individual income tax returns for 2017 (or the three prior years) can file those returns on NETFILE until Friday, January 25, 2019. Until that date, the Canada R...
Prescribed leasing interest rate for January 2019 The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of January 2019.
The prescribed rate for that month will be 3.39%....
December 31, 2018 deadline for 2008 tax fairness applications Where taxpayers fail to meet their tax filing or payment obligations, penalties and interest are usually levied for that failure. However, the Minister of National Revenue has the authority to forgive...
Unemployment rate for November at 42-year low The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of November was the lowest recorded since 1976.
The unemployment rate for the month,...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on December 5, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate rem...
Personal tax credit amounts for 2019 The federal government will provide the following personal tax credit amounts for 2019:
Basic personal amount ……………………………… $12,069
Spouse or common law partner amount …...
Inflation rate up slightly in October The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation rate for the month of October. That rate rose 2.4%, following a 2.2% increase for...
New tax credits to support news organizations In the 2018-19 Fall Economic Statement, the Minister of Finance announced that three new tax initiatives would be introduced to support both traditional and digital news organizations.
Those changes w...
Federal government announces new business tax incentives In the Fall Economic Statement issued on November 21, the Minister of Finance announced new tax measures that would:
allow businesses to immediately write off the cost of machinery and equipment used ...
CRA issues 2018 employer’s guide to taxable benefits Some of the non-monetary benefits which employers provide to their employees must be included in the employee’s income and taxed as such. Each year, employers must include the amount of any such tax...
CRA announces enhancements to BizApp The Canada Revenue Agency (CRA) provides a mobile web app for small business owners and sole proprietors which enables them to manage their business tax accounts on any browser-enabled mobile device.
...
Unemployment rate down slightly for September The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in unemployment during the month of September. That rate stood at 5.8%, down 0.1% from the rate posted for Au...
Canada Pension Plan contribution rates for 2019 The Canada Revenue Agency has announced the contribution rates and amounts for the Canada Pension Plan which will apply during the 2019 calendar year, and that announcement can be found at https://www...
Prescribed interest rate for leasing for November The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of November.
The prescribed rate for that month will be 3.43%.
A c...
CRA announces contingency plans for postal disruption The Canada Revenue Agency (CRA) (as well as other federal government departments and agencies) has issued information indicating how government payments will be handled during the current postal disru...
Inflation rate at 2.2% for September The most recent release of Statistics Canada’s Consumer Price Index shows that the inflation rate for the month of September stood at 2.2%, as measured on a year-over-year basis. The comparable rate...
Bank of Canada raises interest rates again In its regularly scheduled interest rate announcement made on October 24, the Bank of Canada once again increased the bank rate, which now stands at 2%.In the press release announcing the increase, wh...
OAS payment rates for the fourth quarter of 2018 The federal government has announced the maximum Old Age Security (OAS) benefit amount which will be paid to eligible recipients in the last quarter — October, November, and December — of 2018.
Th...
CRA issues updated forms for reduced source deductions In some circumstances, taxpayers are entitled to request a reduction in the amount of tax being deducted at source from their income. An employee can request that the amount of income tax being deduct...
CRA to hold webinar on CPP changes for the self-employed A number of changes have been made over the past few years to the Canada Pension Plan (CPP), with those changes generally providing greater flexibility to CPP contributors. Some of those changes parti...
Slight decline in unemployment rate for September The most recent release of Statistics Canada’s Labour Force Survey shows a small decrease in the overall unemployment rate for the month of September. That rate decreased from the 6% rate recorded f...
Prescribed interest rate for leasing for October The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of October.
The prescribed rate for that month will be 3.33%.
A ch...
Prescribed interest rates for the fourth quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the fourth quarter of 2018, as well as the rates that will apply for the purp...
NETFILE still available for filing of 2017 returns While the deadline for filing of individual income tax returns for the 2017 tax year (for both employees and the self-employed) has passed, the Canada Revenue Agency’s (CRA’s) NETFILE service thro...
Inflation rate down slightly in August The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August 2018 stood at 2.8%, as measured on a year-over-year basis. The comparable...
CRA updates fact sheet for temporary Canadian workers Canada’s tax system is one based on residency, and individuals who are considered to be residents of Canada are subject to federal and provincial tax.
The federal government has issued a fact sheet ...
Employment insurance premium rate for 2019 The Minister of Finance has announced that the employment insurance premium rate payable by employees and the self-employed for the 2019 tax year will be reduced.
The premium rate for that year will b...
CRA issues updated guide to federal and provincial child benefits The federal government has updated and re-issued its guide to child benefits paid by the federal and several provincial governments.
The updated guide (T4114), which is available on the Canada Revenue...
Slight increase in unemployment rate for August The most recent release of Statistics Canada’s Labour Force Survey shows a small increase in the unemployment rate posted for the month of August. That rate rose by 0.2%, from 5.8% to 6%.
Most of th...
Relief available to taxpayers affected by wildfires The Canada Revenue Agency (CRA) can provide interest and penalty relief to taxpayers who are unable to meet their tax filing or payment obligations due to circumstances beyond their control, including...
Bank of Canada leaves interest rates unchanged In its scheduled interest rate announcement made on September 5, the Bank indicated that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 1.75%.
The Bank acknow...
CRA issues Tax Tip on benefit review process Each year the Canada Revenue Agency (CRA) sends a letter and questionnaire to approximately 350,000 taxpayers, seeking to determine whether such taxpayers are receiving the correct tax credits and ben...
Upcoming tax instalment due date for individuals The due date for the third instalment payment of 2018 income taxes by individuals falls on September 15, 2018. As that date is a Saturday, instalment payments will be considered to be made on time if ...
Amendments to be made to rules on political activities of charities The federal government has announced that changes will be made to the administrative rules governing the extent to which charities can engage in non-partisan political activities.
The intended amendme...
Rate of inflation at 3% for July The most recent release of Statistics Canada’s Consumer Price Survey shows a significant increase in inflation for the month of July. That rate, as measured on a year-over-year basis, stood at 3%. T...
Unemployment rate down slightly for July The most recent release of Statistics Canada’s Labour Force Survey indicates that the overall rate of unemployment was down slightly for the month of July. That rate stood at 5.8%, down by 0.2% from...
Finance announces lower payment card fees for small businesses The Minister of Finance has announced that two major payment card networks have agreed to lower costs charged to small and medium-sized businesses.
Both VISA and Mastercard have agreed to reduce domes...
CRA podcasts and webinars for small businesses The Canada Revenue Agency (CRA) prepares and posts on its website a number of podcasts and webinars covering tax and tax-related issues of particular interest to small businesses.
There are currently ...
Bank of Canada 2019 interest rate announcement dates The Bank of Canada has issued a listing of the dates on which it will make announcements during the 2019 calendar year with respect to current interest rates.
There are eight such interest rate announ...
CRA issues new direct deposit form for businesses The Canada Revenue Agency (CRA) has updated and re-issued its Form RC366, which allows businesses to have amounts owed to them deposited directly to a bank account.
The updated form can be used to eit...
CRA issues updated guide to RESPs The Canada Revenue Agency (CRA) has updated and re-issued its publication RC4092(E) on Registered Education Savings Plans.
The updated publication incorporates changes, originally announced as part of...
Inflation rate up by 2.5% in June The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of June, as measured on a year-over-year basis, stood at 2.5%. That change ...
Prescribed interest rates for leasing rules The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will apply during the months of July and August 2018.
Those prescribed rates will be 3.28% for July ...
CRA issues updated guide to taxation of RRIF on death The Canada Revenue Agency has updated and re-issued its publication outlining the tax treatment of funds held in a RRIF on the death of the RRIF annuitant.
The updated publication (RC4178(E)) also rev...
Slight increase in unemployment rate for June While employment rose by 32,000 during the month of June, the unemployment rate was also up, by 0.2%, a result attributed by Statistics Canada an increase in the number of individuals seeking to enter...
Bank of Canada increases benchmark interest rate In its regularly scheduled interest rate announcement made on July 11, the Bank of Canada indicated that it was increasing its benchmark interest rate by one-quarter of a percentage point. Accordingly...
CRA issues Tax Tip on return review process Each year, the Canada Revenue Agency reviews approximately 3 million returns which have already been filed and assessed. Generally, such reviews are carried out to confirm income amounts reported, and...
Old Age Security benefits to increase by 1.2% in third quarter Old Age Security (“OAS”) benefits received by Canadians are indexed to changes in the overall Consumer Price Index, and are adjusted each quarter to reflect increases in that Index.The federal gov...
No change to inflation rate for May The most recent release of Statistics Canada’s Consumer Price Index indicates the rate of inflation for the month of May stood at 2.2%. The same rate was recorded for the month of April, and both ra...
CRA issues updated source deductions online calculator The Canada Revenue Agency (CRA) has re-issued the payroll deductions online calculator to be used by employers in calculating employee source deductions as of July 1, 2018.
The updated version of that...
Prescribed interest rate for leasing for July The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July.
The prescribed rate for that month will be 3.28%.
A chart...
Prescribed interest rates for the third quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the third quarter of 2018, as well as the rates that will apply for the purpo...
CRA updates and re-issues Notice of Objection form The Canada Revenue Agency has updated and re-issued its standard form for filing an objection to a Notice of Assessment or Reassessment. The 2018 T-400A E, Notice of Objection, can be found on the CRA...
No change in unemployment rate for May The most recent release of Statistics Canada’s Labour Force Survey shows little change in unemployment during the month of May. For the fourth consecutive month, that rate stood at 5.8%.
There was s...
June 15 filing deadline for self-employed taxpayers The filing deadline for individual income tax returns for the 2017 year for self-employed individuals and their spouses is midnight Friday June 15, 2018.
Returns can be filed using the Canada Revenue ...
Individual income tax instalment payment due June 15 For Canadians who make quarterly instalment payments of personal income tax, the next due date for such payment is Friday June 15, 2018.
The Canada Revenue Agency has posted a notice on its website in...
Taxpayer relief available for Canadians affected by spring floods The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who have been affected by this spring’s floods of the availability of administrative tax relief.
Under the federal government’s T...
Bank of Canada maintains interest rates at current level In its regularly scheduled interest rate announcement made on May 30, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the Bank Rate remains...
CRA issues updated payroll deduction formulas for July 1, 2018 The Canada Revenue Agency (CRA) has issued updated payroll deduction formulas for use by employers for payroll periods beginning after July 1, 2018. The updated formulas reflect changes in provincial ...
Inflation rate for April at 2.2% The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of April stood at 2.2%, as measured on a year-over-year basis. The rate for...
Unemployment rate unchanged in April The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change during the month of April to either employment figures or the overall unemployment rate.
That un...
CRA tax topic podcasts available for download The Canada Revenue Agency prepares and posts podcasts on a number of different tax topics, both individual and corporate. Those podcasts are available for download from the CRA website.
The current se...
Prescribed interest rates for May and June The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the months of May and June 2018.
Those prescribed rates will be 3.22% during the ...
Getting information about your tax refund Taxpayers who have filed their return for the 2017 tax year and are expecting to receive a refund can track the status of that refund payment through a toll-free telephone line. That line, the CRA’s...
CRA issues warning on filing season tax scams The Canada Revenue Agency (CRA) has issued a warning to taxpayers of the need to be particularly vigilant with respect to fraudulent text, telephone, and e-mail communications, which increase during t...
Inflation rate for March reaches 2.3% The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation stood at 2.3% during the month of March 2018, as measured on a year-over-year basis. The year...
April 30 due date for all 2017 individual taxes owed The Canada Revenue Agency (CRA) has issued a reminder that all individual income tax balances owed for the 2017 tax year must be paid on or before Monday April 30, 2018.
April 30 is also the deadline ...
Unemployment rate unchanged in March The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment for the month of March 2018 stood at 5.8%. The same rate was recorded for February 2018.
Employ...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on April 18, the Bank of Canada indicated that no change was required to current interest rates. Accordingly, the Bank Rate will remain at 1....
ReFILE service for changing individual income tax returns It is not uncommon for taxpayers to discover an error or omission in an already-filed return, and the usual means by which such error can be corrected is the filing of a T1-Adjustment form. While a co...
CRA issues reminder of taxability of income from “sharing economy” The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who receive income from the “sharing economy” that such income is taxable and must be reported on the annual tax return.
Although...
Bank of Canada interest rate announcement dates for 2018 The Bank of Canada’s regularly scheduled interest rate announcement dates for the remainder of calendar year 2018 are as follows:
April 18, 2018;
May 30, 2018;
July 11, 2018;
September 5, 2018;
Octo...
CRA issues update on home sale reporting requirements Proceeds received from the sale of one’s principal residence are, in most circumstances, not taxable, as such sales are eligible for the principal residence exemption. However, as of the 2016 tax ye...
Significant increase in inflation rate for February The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in inflation for the month of February. That rate stood at 2.2%, while the rate for January 2018 was 1.7%. ...
Prescribed interest rates for second quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the second quarter of 2018, as well as the rates that will apply for the purpose...
CRA issues warning on tax scams While taxpayers fall victim to tax scams year-round, such scams are more prevalent during and just following tax filing season. During that time, taxpayers expect to hear from the tax authorities, a...
CRA issues e-filers manual for 2017 returns The Canada Revenue Agency has issued its Guide RC4018, Electronic Filers Manual for 2017 Income Tax and Benefit Returns. That guide is for use by certified e-filers in filing individual income tax ret...
Unemployment rate down slightly in February The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate for the month of February 2018. That rate declined from 5.9% in the month of...
Increase in Consumer Price Index for January The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation for the month of January 2018 stood at 1.7%. The rate for the previous month was 1.9%.
Inflat...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on March 7, the Bank of Canada indicated that no change would be made to current interest rates. Accordingly, the bank rate remains at 1.5%.
...
Budget 2018 - Personal tax credits Budget 2018: No personal tax credits have been repealed, and there are no new personal tax rate changes....
Budget 2018 - Service animals Budget 2018: Eligibility of specially trained service animals will be expanded for the purposes of the medical expense tax credit....
Budget 2018 - Canada Workers Benefit Budget 2018: Taxpayers will no longer need to apply when filing their return in order to receive the Canada Workers Benefit....
Budget 2018 - CRA compliance orders Budget 2018: Where a CRA compliance order or information requirement is contested, a new rule will “stop the clock” to prevent the tax year from being statute barred....
Budget 2018 - RDTOH Budget 2018: A corporation will have two RDTOH accounts going forward: eligible and non-eligible RDTOH....
Budget 2018 - Investment income Budget 2018: A corporation with $100,000 of investment income will have its small business limit reduced to $250,000....
Extended hours for CRA telephone help line The Canada Revenue Agency (CRA) provides a 1-800 telephone service to provide tax information to Canadian taxpayers. Such information can be general in nature, or can involve the specific tax affairs ...
CRA issues list of approved software for NETFILING of 2017 returns The Canada Revenue Agency’s NETFILE service for filing of individual income tax returns will be available starting Monday February 26, 2018.
Taxpayers do not need to obtain an access code to file th...
Unemployment rate up slightly in January The most recent release of Statistics Canada’s Labor Force Survey shows a slight increase in the overall unemployment rate for the month of January. That rate rose by 0.1%, from 5.8% to 5.9%.
That c...
2018-19 Federal Budget date announced The Federal Minister of Finance has announced that the 2018-19 federal Budget will be brought down on Tuesday, February 27, 2018.
The Budget will be released at around 4 p.m. and the full Budget Paper...
Obtaining hard copy of a 2017 income tax return package This year, the Canada Revenue Agency (CRA) will be providing taxpayers with hard copies of the 2017 Income Tax and Benefit package through a variety of means, and at various dates.
Individuals who pap...
CRA announces NETFILE service availability dates for 2017 returns The Canada Revenue Agency (CRA) has announced the date on which NETFILE service for the filing of individual income tax returns for the 2017 tax year will be available.
NETFILE service will be availab...
CRA to mail tax return packages to selected taxpayers While the majority of Canadians now file their individual income tax returns electronically, there is still a significant minority of tax filers who file using a printed return.
The Canada Revenue Age...
CRA announces change to 2017 individual tax return forms The Canada Revenue Agency (CRA) has posted a notice on its website that an “update” has been made to individual 2017 tax forms. Those forms are to be used by individual Canadians to file their ret...
CRA reinstates telephone tax return filing service For a number of years, taxpayers whose tax situation was relatively straightforward were able to file their return by telephone. That service, which was called TELEFILE, was withdrawn a few years ago....
Prescribed interest rates for first quarter of 2018 The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2018, as well as the rates that will apply for the purpo...
Bank of Canada raises interest rates As widely expected, the Bank of Canada indicated, in its regularly scheduled interest rate announcement made on January 17, that an increase in the bank rate was required.
The Bank’s announcement, w...
Federal Budget 2018-19 consultations to end January 26 Finance Canada has announced that the consultation process leading to the release of the 2018-19 federal Budget will conclude on Friday January 26, 2018.
Canadians can provide input by submitting thei...
CRA issues individual T1 Tax Return Form and Guide for 2017 The Canada Revenue Agency has released the T1 Individual Income Tax Return and Benefit form to be used by individual Canadian taxpayers in filing their return for the 2017 tax year. The T1 form is ava...
Unemployment rate for December 2017 down to 5.7% The most recent release of Statistics Canada’s Labour Force Survey indicates that the unemployment rate for the month of December 2017 stood at 5.7%. The last period for which that rate was recorded...
Small business tax rate reduced effective January 1 As previously announced, the federal small business tax rate is reduced to 10.0%, effective as of January 1, 2018. There is no change in the federal small business limit, which remains at $500,000.
Th...
Automobile deduction and benefit limits for 2018 Finance Canada has announced the limits and thresholds which will apply for purposes of determining automobile benefits and deductions during 2018.
Most such deduction limits and thresholds are unchan...
CRA issues guidance on upcoming changes to small business tax rules Planned changes to the federal income tax rules governing the taxation of small incorporated Canadian businesses are to take effect for 2018. One of those changes will include greater restrictions on ...
Changes to be made to Voluntary Disclosure Program The Canada Revenue Agency (CRA) provides an administrative program under which taxpayers who have failed to file returns or pay taxes on a timely basis can bring their tax affairs into compliance, usu...
Age 71 final RRSP contribution to be made by December 31 Taxpayers who are turning age 71 during the year and who have available contribution room are entitled to make a final RRSP contribution for that year.
Such contributions must be made by the end of th...
NETFILE service for 2016 returns available until January 19 Taxpayers who have not yet filed their return for the 2016 tax year will have until January 19, 2018 to file that return using NETFILE. Until that date, returns for the 2013, 2014, 2015, and 2016 tax ...
Bank of Canada leaves interest rates unchanged In its regularly scheduled interest rate announcement made on December 6, the Bank of Canada indicated that, in its view, no change is required to current rates. Accordingly, the bank rate remains at ...
Unemployment rate down in November The most recent release of Statistic’s Canada’s Labour Force Survey shows a slight decline in the overall unemployment for the month of November. That rate declined by 0.4%, to 5.9%. The November ...
T4127 for 2018 payroll deduction amounts released The Canada Revenue Agency has issued the 2018 version of its publication T4127(E), Payroll Deductions Formulas. The guide is intended for use by payroll software providers and by employers which manag...
CRA issues federal TD1 Form and TD1 Worksheet for 2018 The Canada Revenue Agency has issued the federal TD1 Form and Worksheet which will be used by taxpayers and their employers to determine required federal income tax source deductions for the upcoming ...
Inflation rate up by 1.4% in October The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows an inflation rate of 1.4% for the month of October, as measured on a year-over-year basis. The equivalent rate for the...
Finance launches pre-budget consultations Finance Canada has begun the consultation process leading to the release of the 2018-19 federal Budget.
As part of that budget consultation process, the Minister of Finance is holding in-person public...
CRA to provide online filing for trust tax and information returns Effective as of January 8, 2018, administrators and representatives of qualifying Canadian trusts will be able to file trust income tax and information returns online, through the Canada Revenue Agenc...
Employment Insurance premium rates for 2018 The federal government has announced the premium rates and maximum insurable earnings amount which will be in place for the 2018 calendar year.
The premium rate for the year for employees has been set...
CRA announces CPP contribution rates and amounts for 2018 The Canada Revenue Agency (CRA) has announced the contribution rates and amounts for both employers and employees which will apply for 2018.
Maximum pensionable earnings for the year will be $55,900 (...
ON - Date announced for 2021-22 provincial Budget The Ontario government has announced that the province’s Budget for the upcoming 2021-22 fiscal year will be brought down on Wednesday March 24, 2021.
When the Budget is released, the budget papers ...
ON - Province releases third quarter financial report for 2020-21 The provincial government has released the revenue, expenditure, and projected deficit figures for the third quarter (October 1 – December 31) of the 2020-21 fiscal year.
Based on those figures, the...
ON - Province launches 2021 Budget consultation process The Ontario government has launched its consultation process with respect to the upcoming 2021-22 provincial Budget. That Budget will be brought down by March 31, 2021.
The Budget consultation process...
ON - Personal tax credit amounts for 2021 The province of Ontario will provide the following personal tax amounts for 2021.
Basic personal amount ………………………………… $10,880
Spouse or common law partner amount …… $9,...
ON - Interest Rates - 2021 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Application process for Support for Learners subsidy now open In early November the Ontario government announced that a subsidy would be provided to families with children up to age of 12 (or age 21 in the case of children with special needs).The purpose of the ...
ON - Ontario Finance updates and re-issues Notice of Objection form Ontario taxpayers who disagree with an assessment of their tax liability under a range of provincial tax programs are entitled to object to that assessment.
The Ontario government has updated and re-i...
ON - Province increases exemption threshold for Employer Health Tax The Employer Health Tax (EHT) is a payroll tax paid by employers based on their total annual Ontario remuneration in excess of a remuneration threshold. The EHT has a top rate of 1.95%.
In March 2020 ...
ON - 2020-21 Budget projects current year deficit of $38.5 billion In the 2020-21 Budget brought down on November 5, the government of Ontario projected a deficit of $38.5 billion for the current fiscal year. That deficit amount is unchanged from the figure projected...
ON - Province introduces Seniors’ Home Safety Tax Credit In the 2020 Budget brought down on November 5, the province introduced a new refundable tax credit for seniors. That credit will be claimable by senior homeowners, renters, or people who live with rel...
ON - Provincial Budget to be brought down on November 5 The Ontario government has announced that the 2020-21 provincial Budget will be brought down on Thursday November 5, 2020.
In the announcement of the Budget date, which is available on the provincial ...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each quarter of the calendar year. The rates presc...
ON - Province releases Public Accounts for 2019-20 fiscal year Ontario has released the province’s final fiscal results for the fiscal year ended March 31, 2020. The 2019-20 Public Accounts compare those final fiscal results with the figures projected in the 20...
ON - Province to implement residential rent freeze for 2021 The Ontario government has announced that a rent freeze will be imposed for the 2021 calendar year for most residential rental accommodation in the province.
While Ontario already has rent control leg...
ON - Interest and penalty relief period to end October 1, 2020 As part of its pandemic response measures, the Ontario government provided businesses with relief from penalties and interest charges related to late filings or remittances, for a six-month period. Th...
ON - Province extends change to temporary layoff rules Under Ontario labour laws, where a non-unionized employee is laid off for more than 13 weeks, said layoff can trigger termination and severance payment obligations for the employer. However, earlier...
ON - CRA issues warning on tax scam and Ontario tax benefits The Canada Revenue Agency (CRA) has issued a warning to taxpayers of a current tax scam relating to claims for Ontario tax benefits — specifically, claims for the Ontario Senior Homeowners Property ...
ON - Minimum wage to increase effective October 1, 2020 On October 1, 2020, the Ontario general minimum wage will increase by 25 cents, to $14.25 per hour. That increase is based on changes to the Ontario Consumer Price Index.
Different minimum wage rates ...
ON - Interest and penalty relief program extended In March 2020, the Ontario government announced that, as part of its pandemic response plan, it would provide an interest and penalty relief period for Ontario taxpayers with respect to specific tax p...
ON - Province extends commercial rent assistance program The provincial government has announced that its commercial rent assistance program — Canada Emergency Commercial Rent Assistance (CECRA) — has been extended to be available until the end of Augus...
ON - Tax penalty and interest relief period ends August 31 In March 2020 the provincial government announced that, as part of its pandemic response plan, a five-month interest and penalty relief period would be provided to Ontario businesses which failed to f...
ON - Limits to be imposed on payday loan interest rates and fees The provincial government has announced that it will be moving to impose limits on the rate of interest and certain fees which can be levied by payday loan companies.
The proposed changes would cap th...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute at the beginning of each calendar quarter. The rates set for the third quarter...
ON - Application process for commercial rent assistance program open Applications can now be made by commercial landlords in Ontario for forgivable loans to assist with pandemic-related losses of rental income.
Under the Canada Emergency Commercial Rent Assistance (CEC...
ON - Province provides temporary deferral of student loan payments As part of its pandemic response plan, the province is providing interest relief and payment deferrals on existing Ontario Student Assistance Program (OSAP) loans.
Under that plan, OSAP borrowers will...
ON - Forgivable loan program for eligible small business landlords The Ontario government will be providing forgivable loans to eligible commercial property owners in the province who are experiencing rent shortfalls due to the pandemic, through the new Ontario-Canad...
ON - Interest and penalty relief for Ontario businesses As part of its recent Economic and Fiscal Update, the province announced that interest and penalty relief would be provided to Ontario businesses with respect to their obligations under specified tax ...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province to provide interest and penalty relief for businesses In the Economic and Fiscal Update brought down on March 25 Ontario’s Minister of Finance announced that, beginning April 1, 2020, penalties and interest will not be imposed on Ontario businesses tha...
ON - Province to bring down Economic and Fiscal update on March 25 The Ontario government had announced that the province’s 2020-21 Budget would be brought down on March 25, 2020.
The Ontario Minister of Finance has indicated that, in light of recent developments, ...
ON - Province announces date for 2020-21 Budget The Ontario government has announced that the province’s Budget for the upcoming (2020-21) fiscal year will be brought down on Wednesday March 25, 2020.
Once the Budget is released, the Budget paper...
ON - Province releases third-quarter results for 2019-20 The Ontario Ministry of Finance has announced the province’s financial results for the third quarter (October to December 2019) of its 2019-20 fiscal year.
As of December 31, 2019, the government is...
ON - Interest Rates - 2020 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Personal tax credit amounts for 2020 The province of Ontario will provide the following personal tax credit amounts for 2020:
Basic personal amount ……………………………… $10,783
Spouse or common law partner amount ...
ON - Province projects balanced budget by 2023 In the 2019 Ontario Economic Outlook and Fiscal Review released by the provincial government on November 7, the Minister of Finance confirmed the government’s commitment to balance the budget by 202...
ON - Small business income tax rate to be reduced In the fall Economic Outlook and Fiscal Review released on November 6, the Minister of Finance announced that the provincial corporate income tax rate applied to Ontario small businesses will be reduc...
ON - Date announced for 2019 Fall Economic Statement The Ontario Minister of Finance has announced that the 2019 Fall Economic Statement will be brought down on Wednesday November 6, 2019.
That economic statement will update the revenue, expenditure, an...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province releases financial results for 2018-19 The Ontario government has released the Public Accounts which summarize the province’s financial position at the end of the 2018-19 fiscal year, which ended March 31, 2019.
The related press release...
ON - Land transfer tax refund for first-time home buyers The province of Ontario levies a land transfer tax (LTT) on each purchase and sale of property in the province. The province also provides first-time homebuyers in Ontario with a refund of LTT which w...
ON - Online calculator available for 2019-20 Ontario tax credits The province of Ontario provides residents with a number of refundable tax credits, with eligibility for those credits based on age, income, and type and place of residence. The current benefit year f...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Updated bulletin issued on non-resident speculation tax (NRST) Ontario imposes a 15% non-resident speculation tax (NRST) on purchases of residential property located in the Greater Golden Horseshoe Region (GGH) by individuals who are not citizens or permanent res...
ON - Budget reduces and simplifies Estate Administration Tax The province of Ontario levies an Estate Administration Tax (EAT), which is more commonly known as probate fees. In the 2019-20 Budget, the province announced that changes would be made to the EAT, as...
ON - Province to balance Budget in 2023-24 The 2019-20 Ontario Budget released on April 11, 2019 indicates that the province will not achieve a balanced budget until the 2023-24 fiscal year.
The Budget papers show that the province expects the...
ON - Province introduces new child care tax credit The 2019-20 provincial Budget brought down on April 11 included the announcement of a new refundable child care tax credit, claimable for the 2019 and subsequent taxation years.
The new credit will be...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Date announced for 2019-20 provincial Budget The Ontario government has announced that the province’s Budget for the upcoming (2019-20) fiscal year will be brought down on Thursday April 11, 2019.
Once the Budget is released, the Budget papers...
ON - Third quarter update shows reduced deficit The provincial government has issued its fiscal update for the Third Quarter of the 2018-19 year, and that update shows a $1 billion reduction in the province’s deficit. That deficit is now projecte...
ON - Interest Rates - 2019 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province launches 2019-20 Budget consultation process The Ontario Minister of Finance has announced the start of the consultation process leading to the release of the province’s 2019-20 Budget next spring.
There are several options for Ontario residen...
ON - Payroll tax exemption level increased for 2019 In the recent Economic Outlook and Fiscal Review, the Ontario Minister of Finance announced that the annual payroll threshold for the province’s Employer Health (payroll) Tax (EHT) would be increase...
ON - Personal tax credit amounts for 2019 The province of Ontario will provide the following personal tax credit amounts for 2019:
Basic personal amount ………………………………… $10,582
Spouse or equivalent to spouse amount …...
ON - Province reverses planned 2019 minimum wage increase The Ontario government has reversed the minimum wage increase which had been scheduled to take effect on January 1, 2019. On that date, the minimum wage was scheduled to increase from $14 to $15 per h...
ON - Province offers property tax deferral program The province provides a program under which low-income seniors and low-income persons with disabilities can obtain a partial deferral of property tax and education tax. The tax deferral applies to the...
ON - Interest Rates - 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Increases to driver licensing fees cancelled The government of Ontario has announced that planned fee increases with respect to licensing fees for drivers in the province, which were to have taken effect on September 1, 2018, have been cancelled...
ON - Registering for online tax services for business The Ontario government provides an online service – ONT-TAXS, through which Ontario businesses can file and amend returns, make tax payments, and track the status of such returns and payments.
The s...
ON - Ontario Trillium Benefit amounts for 2018-19 benefit year The new benefit year for the Ontario Trillium Benefit (OTB) began in July 2018 and will run until June 2019. The OTB is a refundable tax credit which is claimed on the annual tax return and paid to ta...
ON - 2018 personal income tax rates As announced in this year’s provincial Budget, Ontario has altered its personal tax rate structure. The changes announced include the elimination of the provincial surtax and the replacement of the ...
ON - Provincial cap-and-trade system eliminated as of July 3 The Ontario government has announced that the existing cap-and-trade carbon tax system will be eliminated, effective as from July 3, and that provincial government programs which were funded under tha...
ON - Interest Rates – 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - CRA issues source deductions online calculator for Ontario The Canada Revenue Agency (CRA) has re-issued the payroll deductions online calculator to be used by Ontario employers in calculating employee source deductions starting July 1, 2018.
The updated vers...
ON - July 1st start of 2018-19 tax credit benefit year The province provides eligible Ontario residents with a number of refundable tax credits and benefits. Those benefits are paid on a monthly basis, and eligibility for most benefits is based, in part, ...
ON - Provincial R&D tax credit enhanced The Ontario Research and Development Tax Credit (ORDTC) is a 3.5% non-refundable tax credit earned on eligible R&D expenditures. As announced in this year’s provincial Budget, eligible busines...
ON - 2018-19 Budget changes affecting seniors enacted The Ontario government recently enacted legislation to implement announcements made in this year’s provincial budget. Those announcements include two changes affecting seniors in the province, as fo...
ON - Increased consumer access to credit reporting information The provincial government has announced changes that will provide Ontario residents with increased access to personal information held by credit reporting agencies.
Under the new rules, certain credit...
ON - Filing a tax return to receive provincial benefits for 2018-19 The province of Ontario provides a number of tax credits to individual residents of the province, and those benefits are paid on monthly basis. The next benefit year will start in July 2018 and run un...
ON - Province increases charitable donation tax credit In this year’s Budget, the provincial government announced that the non-refundable tax credit provided to taxpayers who make qualifying donations to charity would be increased.
The credit is a two-l...
ON - Interest Rates - 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - Province announces date for 2018-19 Budget The provincial government has announced that Ontario’s 2018-19 Budget will be brought down by the Minister of Finance on Wednesday, March 28 at around 4 p.m.
Once the Budget is announced, the Budget...
ON - Personal tax credit amounts for 2018 The province of Ontario will provide the following personal tax credit amounts for 2018:
Basic personal amount ………………………………… $10,354
Spouse or equivalent to spouse amount ...
ON - Province releases third-quarter fiscal results for 2017-18 The release of Ontario’s Third Quarter Finances report indicates that the province remains on track to balance the budget for the 2017-18 fiscal year, although the amount of the projected surplus ha...
ON - Personal income tax rates and brackets for 2018 For the 2018 tax year, the province of Ontario will levy personal income tax based on the following tax rates and brackets.
05% on taxable income between $10,354 and $42,960;
15% on taxable income bet...
ON - Payment dates for Ontario Trillium Benefit for 2018 The province of Ontario provides a number of refundable tax credits to individual residents of the province. Several of those credits are combined and paid as a single monthly benefit — the Ontario ...
ON - Consultation process for 2018-19 provincial Budget announced The government of Ontario has announced the launch of its pre-budget consultation process leading to the release of the province’s 2018-19 Budget.
That budget consultation process has several compon...
ON - CRA releases 2017 T1 tax return form for Ontario residents The Canada Revenue Agency has released the 2017 T1 Individual Income Tax Return and Benefit form to be used by individuals who were residents of Ontario at the end of that year. The T1 form package (w...
ON - Interest Rates – 2018 The province of Ontario charges and pays interest on underpayments and overpayments of tax at rates prescribed by statute and set at the beginning of each calendar quarter. The rates levied and paid f...
ON - 2018 Ontario TD1 Form and TD1 Worksheet released The Canada Revenue Agency has issued the Ontario TD1 form and worksheet which will be used by taxpayers resident in the province, and their employers, to determine required provincial income tax sourc...
ON - Changes enacted to provincial employment standards The Ontario government has enacted a number of changes to the province’s employment standards laws, and those changes include the following:
the Ontario minimum wage will increase to $14 per hour on...
ON - Apprenticeship training tax credit eliminated The province of Ontario provided employers who hired and trained eligible apprentices in designated construction, industrial and motive power, and certain service trades with a refundable tax credit, ...
ON - Province to reduce small business tax rate in 2018 In the 2017 Economic and Fiscal Review issued on November 14, Ontario’s Minister of Finance announced that the provincial small business tax rate would be reduced, effective as of January 1, 2018, f...
Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know until their return is completed what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know until their return is completed what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.
Most taxpayers are, of course, hoping for a refund — the bigger the better. A lot would be happy to find that at least nothing is owed to the Canada Revenue Agency (CRA), or that an amount owing is not significant.
The worst-case scenario, for all taxpayers, is to find out that they are faced with a large tax bill and an imminent payment deadline, and that they just don’t have the money to make the required payment by that deadline. For those who don’t have the means to pay a tax bill out of existing resources, that likely means borrowing the needed funds. And, while that will mean paying interest on the borrowing, the interest cost incurred will likely be less than that which would be levied by the CRA on the unpaid tax bill.
If a tax bill can’t be paid in full out of either current resources or available credit, the CRA is open to making a payment arrangement with the taxpayer. While, like most creditors, the CRA would rather get paid on time and in full, its ultimate goal is to collect the full amount of taxes owed. Consequently, the CRA provides taxpayers who simply can’t pay their bill for the year on time and in full with the option of paying an amount owed over time, through a payment arrangement.
There are two avenues available to taxpayers who want to propose such a payment arrangement. The first is a call to the CRA’s automated TeleArrangement service at 1-866-256-1147. When making such a call, it is necessary for the taxpayer to provide his or her social insurance number, date of birth, and the amount entered on line 150 of the last tax return for which the taxpayer received a Notice of Assessment. For taxpayers who are up to date on their tax filings, that will be the Notice of Assessment for the return for the 2019 tax year. The TeleArrangement Service is available Monday to Friday, from 7 a.m. to 10 p.m., Eastern Time.
Taxpayers who would rather speak directly to a CRA employee can call the Agency’s debt management call centre at 1-888-863-8657, or can complete an online form (available at https://apps.cra-arc.gc.ca/ebci/iesl/showClickToTalkForm.action) requesting a callback from a CRA agent.
The CRA also provides on online tool, in the form of a Payment arrangement calculator (available at Payment Arrangement Calculator — Canada.ca), which allows the taxpayer to calculate different payment proposals, depending on his or her circumstances). That calculator includes interest charges since, no matter what payment arrangement is made, the CRA levies interest charges on any amount of tax owed for the 2020 tax year which is not paid on or before April 30, 2021. Interest charges levied by the CRA tend to add up quickly, for two reasons. First, the interest charged by the CRA on outstanding tax amounts is, by law, higher than current commercial rates — the rate charged from April 1 to June 30, 2021 is 5%. Second, interest charges levied by the CRA are compounded daily, meaning that each day interest is levied on the previous day’s interest charges. It is for these reasons that a taxpayer is, where at all possible, likely better off arranging private borrowing in order to pay any taxes owing by the April 30 deadline.
This year, there is one exception to the usual rules with respect to interest charges levied on late or insufficient tax payments. During 2020, millions of Canadian taxpayers applied for and received pandemic-related benefits. And, although those benefits represent taxable income to the recipients, no tax was deducted from the payments when they were made. Consequently, many benefit recipients will be facing a larger than expected tax bill when they complete their return for 2020. And, given the continuing economic and employment fallout from the pandemic, it’s likely that many of them will be unable to pay those taxes on time and in full. In recognition of that fact, the CRA has indicated that it will be providing relief from the resulting interest charges in the form of a one-year interest holiday. Specifically, taxpayers who received pandemic-related benefits during 2020 and whose income for that year was $75,000 or less, will not have to pay any interest charges on 2020 tax amounts owed until May 1, 2022. More information on the interest relief program can be found on the CRA website at https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/covid19-taxes/interest-relief.html.
Finally, regardless of the taxpayer’s circumstances, there is one strategy which is a bad one. Taxpayers who can’t pay their tax bill by the deadline sometimes conclude that there is no point in filing if payment can’t be made. Those taxpayers are wrong. Where an amount of tax is owed and the return isn’t filed on time, there is an immediate tax penalty imposed of 5% of the outstanding tax amount — and interest charges start accruing on that penalty amount (as well as on the outstanding tax balance) immediately. For each month that the return isn’t filed, a further penalty of 1% of the outstanding tax amount is charged, to a maximum of 12 months. Higher penalty amounts are charged, for a longer period, where the taxpayer has incurred a late-filing penalty within the past three years. In a worst-case scenario, the total penalty charges can be 50% of the tax amount owed — and that doesn’t count the compound interest which is levied on all penalty amounts, as well as on all unpaid taxes. In all cases, no matter what the circumstances, the right answer is to file one’s tax return on time. This year, for most taxpayers, that means filing on or before Friday April 30, 2021. For self-employed taxpayers (and their spouses) the filing deadline is Tuesday June 15, 2021. However, for all taxpayers, the payment deadline for all 2020 income tax owed is Friday April 30, 2021.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Our tax system is, for the most part, a mystery to individual Canadians. The rules surrounding income tax are complicated and it can seem that for every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances, and of which most Canadians are aware. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2020 must be remitted to the Canada Revenue Agency (CRA) on or before Friday April 30, 2021. No exceptions and, absent extraordinary circumstances, no extensions.
Our tax system is, for the most part, a mystery to individual Canadians. The rules surrounding income tax are complicated and it can seem that for every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances, and of which most Canadians are aware. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2020 must be remitted to the Canada Revenue Agency (CRA) on or before Friday April 30, 2021. No exceptions and, absent extraordinary circumstances, no extensions.
It is very much in the CRA’s interest to make paying taxes as simple and as straightforward as it can be and so the Agency offers individual taxpayers a wide range of choices when it comes making that payment. There are, in fact, no fewer than eight separate options available to individual residents of Canada in paying their taxes for the 2020 tax year. The first five options outlined below involve payment by electronic means, while the last three describe those available to taxpayers who would prefer to make their payments in person, or by sending a cheque to the CRA.
The specific steps involved in making that payment will differ slightly for each financial institution, depending on how their online payment systems are configured. What’s important to remember is that the nature of the payment (i.e. current year tax return, as distinct from current year tax instalment payments) must be specified, and the taxpayer’s social insurance number must be provided, in order to ensure that the payment is credited to the correct account, for the correct taxation year.
It is not necessary to access any particular CRA form in order to make an online payment of taxes through one’s financial institution.
Using the CRA’s My Payment
The CRA also provides an online payment service called My Payment. There is no fee charged for the service, and it’s not necessary to be registered for any of the CRA’s other online services in order to use My Payment.
What is necessary is that the taxpayer have a debit card with a VISA Debit, Debit MasterCard, or Interac logo from a participating Canadian financial institution, as My Payment is set up to accept payment using only those cards. Anyone intending to use My Payment should also confirm that the amount of any payment to be made is within the daily or weekly transaction limits imposed by the particular financial institution.
Payment by credit card, PayPal, or Interac e-transfer
While it’s possible to pay one’s taxes using a credit card, PayPal, or Interac e-transfer, such payments can only be made through third-party service providers (that is, payments by those methods cannot be made directly to the CRA), and such third party service providers will impose a fee for the service.
There are a number of third-party service providers which will accept payments and remit them on the taxpayer’s behalf to the CRA. However, the majority of such services are more oriented toward providing services to businesses, and most of those listed on the CRA website do not handle payments of individual income tax amounts owed.
It’s possible to set up a pre-authorized debit (PAD) arrangement with the CRA, authorizing them to debit the account for an amount of taxes owed, on dates specified by the taxpayer.
Individuals who make instalment payments of tax throughout the year may already have such an arrangement in place and can certainly use that existing arrangement to arrange a PAD of any balance of taxes owed for the 2020 tax year. However, any such arrangement must be made at least five business days before the payment due date of April 30. A taxpayer who makes a payment of taxes only once a year is likely better off using another of the available payment methods.
There is also another option for taxpayers who have their return prepared and E-FILED by an authorized electronic filer. Such taxpayers can have that E-FILER set up a PAD agreement on their behalf in order to make a “one-time” payment for a current year tax amount owed. Such an arrangement is only for the payment of a current-year tax balance, and can’t be used for other payments like instalment payments of tax. Details on how to set up a pre-authorized debit arrangement, whether for a single payment or for recurring payments, are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-authorized-debit.html.
Paying in person at your financial institution
For those who don’t use online banking, or simply prefer to make a payment in person, it’s possible to pay a tax amount owed at the bank. Doing so, however, requires that the taxpayer have a specific remittance form.
All Canada Post outlets can receive payments of individual income tax balances owed, in cash or by debit card. Once again, however, it is necessary to have a specific form to do so.
In this case, the taxpayer must have a QR code which contains the information needed for the CRA to credit the amount paid to the taxpayer’s account.
Such cheques are made payable to the Receiver-General of Canada, and are mailed, together with the required remittance form, to the CRA, using the address found on the back of the payment remittance form. As is the case with payments made at a financial institution, the taxpayer can print such a remittance form from the CRA’s website. Instructions on how to do so can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/request-payment-forms-remittance-vouchers.html.
The CRA also suggests that, where payment of taxes owing is made by cheque, the taxpayer should include his or her social insurance number on the memo line found on the front of the cheque. Doing so will help ensure that the payment is credited to the correct account.
It’s important for all taxpayers to realize that, whatever form of payment is used, the payment deadline of April 30 requires that the CRA receive payment by that date. The CRA considers that a payment has been made only when it actually receives that payment, or the payment is received by a member of the Canadian Payments Association (which would include most Canadian financial institutions).
The majority of payment options now available to Canadians involve online transactions or the use of third party service providers. Both such methods can mean some delay in receipt of the payment by the CRA, as a result of the time required for processing of the payment by the financial institution or third party. Consequently, taxpayers who make their tax payments online or using a third party service provider are well advised to consider that time lag in deciding when to make their payment – waiting until April 30, especially late in the day, to do so isn’t a good idea.
Those who make their payment in person at a financial institution (using a remittance form, as outlined above) can make their payment on April 30, as the date stamped on the remittance form is considered to be the date on which such payment is received by the CRA.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
By the time most Canadians sit down to organize their various tax slips and receipts and undertake to complete their tax return for 2020, the most significant opportunities to minimize the tax bill for the year are no longer available. Most such tax planning or saving strategies, in order to be effective for 2020, must have been implemented by the end of that calendar year. The major exception to that is, of course, the making of registered retirement savings plan (RRSP) contributions, but even that had to be done on or before March 1, 2021 in order to be deducted on the return for 2020.
By the time most Canadians sit down to organize their various tax slips and receipts and undertake to complete their tax return for 2020, the most significant opportunities to minimize the tax bill for the year are no longer available. Most such tax planning or saving strategies, in order to be effective for 2020, must have been implemented by the end of that calendar year. The major exception to that is, of course, the making of registered retirement savings plan (RRSP) contributions, but even that had to be done on or before March 1, 2021 in order to be deducted on the return for 2020.
The fact that the clock has run out on most major tax planning opportunities for 2020 doesn’t mean, however, that there are no tax-saving strategies left. At this point, there are a couple of ways to minimize the tax hit for 2020 — by claiming all available deductions and credits on the return and also by making sure that those deductions and credits are claimed in the way which will give the taxpayer the most “bang for the buck”.
Everyone’s tax situation — and, therefore, tax return — is different, but most taxpayers make claims on their annual returns for medical expenses incurred and/or charitable donations made. It may seem counterintuitive or even illogical to not claim every available deduction and credit in order to obtain the best possible tax result for the year. However, for both medical and charitable tax credit claims, albeit for different reasons, there are situations in which it makes sense to defer an available claim until a future year, or to transfer the claim to another person.
Claiming charitable donations
Taxpayers are entitled to make a claim on the annual tax return for charitable donations made in the current (2020) year or any of the previous five years. The reason it can sometimes makes sense not to claim a charitable donation in the year it was made arises from the way in which the charitable donations tax credit is structured to encourage higher donations.
That credit, at both the federal and provincial/territorial levels, is a two-tier credit. Federally, the first $200 in donations receives a credit of 15% of the total donation, or $30. However, donations above the $200 level receive a credit equal to 29% of the donation amount over $200.
Take, for example, a taxpayer who makes a regular contribution to a favourite charity of $100 each month, or $1,200 per year. Where he or she claims that donation on the annual return each year, that claim will result in a federal credit of $320 ($200 × 15%, + $1,000 × 29%). Where, however, the same taxpayer defers the claim to the following year and claims a total of $2,400 in donations on a single return, he or she will receive a federal credit of $668. ($200 × 15%, + $2,200 × 29%). Where the donations are accumulated and claimed once every five years, the federal credit received will be $1,712 ($200 × 15%, + $5,800 × 29%). Under each scenario, the total charitable donation made is the same, but the amount of credit received increases with each year that the claim is deferred. Since each of the provinces and territories provide a two-tier credit (at different rates, depending on the jurisdiction), the same result will be seen when calculating the provincial/territorial credit.
Medical expense tax credit
Notwithstanding our publicly funded health care system, there are a great (and increasing) number of medical and para-medical expenses for which coverage is not provided and which must be paid on an out-of-pocket basis. In many instances, it’s possible to claim a medical expense tax credit for those out-of-pocket costs.
The federal credit for such expenses is 15% of allowable expenses. As is usually the case, the provinces and territories also provide a credit for the same expenses, albeit at different rates.
Many taxpayers, with some justification, find the rules on the calculation of a medical tax credit claim confusing. First, there is an income threshold imposed. Medical expenses eligible for the credit are qualifying expenses which exceed 3% of net income, or (for 2020) $2,397, whichever is less. Put more practically, for 2020 taxpayers who have net income of $79,900 or more can claim medical expenses incurred over $2,397. Those with lower incomes can claim medical expenses which exceed 3% of that lower net income. For instance, a taxpayer having $35,000 in net income could claim qualifying medical expenses incurred over $1,050 (3% of $35,000).
The other aspect of the medical expense tax credit which can be confusing is the calculation of the optimal time period. Unlike most credit claims, the medical expense tax credit can be claimed for qualifying expenses which were paid in any 12-month period ending during the tax year. While confusing, such rule is beneficial, in that it allows taxpayers to select the particular 12-month period during which medical expenses (and therefore the resulting credit claim) is highest. The only restrictions are that the selected 12-month period must end during the calendar year for which the return is being filed and, of course, any expenses which were claimed on a previous return cannot be claimed again.
While only expenses which exceed the $2,379/3% threshold may be claimed, it’s also possible to aggregate expenses incurred within a family and make a single claim for those expenses on the return of one spouse. Specifically, the rules allow families to aggregate medical expenses incurred for each spouse and for all children born in 2003 or later. While medical expenses incurred by a single family member might not be enough to allow him or her to make a claim, aggregating those expenses is very likely (especially for a family that does not have private medical insurance coverage) to mean that total expenses will exceed the applicable threshold.
In determining who will make the medical tax credit claim for a family, there are two points to remember. Since total medical expenses claimable are those which exceed the 3% of net income/$2,379 threshold, whichever is less, the greatest benefit will be obtained if the spouse with the lower net income makes the claim for total family medical expenses. However, the medical expense credit is a non-refundable one, meaning that it can reduce tax otherwise payable, but cannot create (or increase) a refund. Therefore, it’s necessary that the spouse making the claim have tax payable for the year of at least as much as the credit to be obtained, in order to make full use of that credit.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
When the pandemic was declared just over a year ago, the federal government announced a wide range of benefits to help mitigate the financial stress experienced by those who lost jobs or saw their hours (and income) reduced.
When the pandemic was declared just over a year ago, the federal government announced a wide range of benefits to help mitigate the financial stress experienced by those who lost jobs or saw their hours (and income) reduced.
The most broad-based of those programs was the Canada Emergency Relief Benefit (CERB), which was received by nearly 9 million Canadians. The rollout of the program was rapid—generally speaking, recipients could obtain benefits by direct deposit within days after completing an online application questionnaire. Inevitably, the rapid rollout of CERB gave rise to some confusion, among recipients and those who were administering the program. That confusion meant that some individuals who were not actually eligible for the CERB nonetheless received benefit payments—in some cases substantial benefit payments.
A year later, such recipients are faced with the requirement that benefits which they received but to which they were not entitled must be repaid. Nonetheless, the federal government has announced that as a matter of administrative policy, relief from such repayment obligations may be provided, mainly in circumstances where erroneous information was provided to applicants.
The beneficiaries of the relief measure announced are self-employed individuals. When the CERB program was rolled out, one of the criteria for benefit eligibility was that the applicant must have had income of at least $5,000 during the previous 12 months. For most individuals determining that figure is straightforward, but for the self-employed, the calculation is more complex.
Information given to some self-employed applicants last spring was the $5,000 threshold referred to gross self-employment income, not net income. That information was incorrect, and self-employed individuals who indicated on the application form that they had at least $5,000 in income from self-employment in the previous 12 months generally received the CERB (assuming all other criteria were met). Where, however, they had less than $5,000 in net self employment income during the qualifying period, such individuals were subsequently found not to been eligible, after all, and were required to repay CERB amounts received.
In February of this year, the federal government determined that, in light of the fact that such individuals had acted in reliance on information provided by CERB program administrators, repayment should not be required. Consequently, the government announced that:
“ … self-employed individuals who applied for the Canada Emergency Response Benefit (CERB) and would have qualified based on their gross income will not be required to repay the benefit, provided they also met all other eligibility requirements. The same approach will apply whether the individual applied through the Canada Revenue Agency or Service Canada.
"This means that, self-employed individuals whose net self-employment income was less than $5,000 and who applied for the CERB will not be required to repay the CERB, as long as their gross self-employment income was at least $5,000 and they met all other eligibility criteria.”
To date, the relief to be provided to qualifying self-employed CERB recipients is the only broad-based repayment forgiveness program which has been announced by the federal government. In any other circumstances, relief of any kind may be provided only on a case-by-case basis.
Those who believe that they are required to repay CERB amounts received (or have received a communication indicating that they must do so) should also be aware of the existence of CERB repayment scams, and know to recognize such a scam. Sadly, but predictably, individuals have been contacted by scammers purporting to be from the federal government who insist that repayment of CERB amounts received must be made immediately, often by unconventional means, like pre-paid credit cards. The federal government has issued a warning with respect to such scams, advising Canadians to beware of fraudulent emails, texts or calls claiming to be from the CRA about repaying the CERB or requesting personal information. The best way to avoid becoming a victim of such scams is to be knowledgeable about the ways in which the CRA does and does not communicate with taxpayers on such matters. For instance, the CRA will never demand immediate payment by Interac e-transfer, bitcoin, prepaid credit cards, or gift cards from retailers such as iTunes or Amazon, and will never threaten a taxpayer with arrest or a prison sentence. As well, the CRA never uses text messages or instant messaging such as Facebook Messenger or WhatsApp to communicate with taxpayers about tax-related issues under any circumstance. Any text or instant message purporting to be from the CRA is a scam.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
While the obligation to file a tax return recurs annually, that return form is never exactly the same from year to year. Tax brackets and allowable deduction and credit amounts change each year and, more significantly, new deductions are provided for and new credits allowed or eliminated.
While the obligation to file a tax return recurs annually, that return form is never exactly the same from year to year. Tax brackets and allowable deduction and credit amounts change each year and, more significantly, new deductions are provided for and new credits allowed or eliminated.
The changes on the individual income tax return for 2020 are perhaps not as numerous or as significant as in some prior years, but there are new credits and deductions which may be claimed, and changes to some existing filing procedures. What follows is an outline of some of the more important changes affecting individual tax filers for 2020, and where those changes can be found on the T1 return form.
Home office expense deduction claims by employees — line 22900 and Form T777S
For many years, employees who work from home more than 50% of the time or who use their home as a place to hold client meetings on regular basis have been able to deduct certain expenses when calculating taxable income for the year.
Obviously, during 2020, the number of employees who work from home increased dramatically, and the Canada Revenue Agency (CRA) has made changes to the rules governing home office expense deductions to accommodate that reality.
In previous years, a home office expense deduction was calculated by totalling all eligible expenses and claiming the percentage of those expenses which corresponded to the size of the home office relative to the entire home. For example, an individual whose home work space used 15% of the total square footage of his or her home would be able to claim 15% of eligible home office expenses.
The CRA has added a new cost to the list of eligible home office deduction expenses. Effective for the 2020 and subsequent tax years, eligible employees can include reasonable monthly home internet access fees in tallying home office expenses.
While it’s still possible to calculate and claim home office expenses for 2020 using the detailed method outlined above, the CRA has also made available a simpler method for those who don’t wish to do all of the required calculations involved in the detailed method. Using the CRA’s “quick method”, taxpayers who are eligible to claim home office expenses can simply claim $2 per day, for a maximum of 200 days. The total allowable claim using the quick method is, therefore, a deduction of $400.
Home office expenses are claimed on line 22900 of the return, and taxpayers making this claim must also complete Form T777S.
Non-refundable digital news subscription tax credit — line 31350
It’s common knowledge that the field of publishing, especially the publication of news, is in a state of flux, as traditional print media adapts to the online dissemination of such news. In recognition of this reality, the federal government will be providing (for the years 2020 to 2024) a digital news subscription tax credit.
For 2020, individual taxpayers can claim up to $500 for amounts paid for qualifying subscription expenses. Generally, such qualifying expenses are those paid to Canadian print journalism organizations (i.e., not broadcast media) for a digital news subscription to content that is primarily original news.
While the maximum amount which can be claimed for such a subscription is $500 per year, that amount can be split between taxpayers, as long as the total claim does not exceed $500.
The digital news subscription tax credit is claimed on line 31350 of the 2020 tax return.
Refundable training tax credit — line 45350
Canadian taxpayers aged between 26 and 66 years of age may be able to claim a refundable tax credit for eligible tuition and other fees paid in 2020 in relation to occupational, trade, or professional training.
To qualify for the credit, such tuition fees must generally have been paid to a Canadian university or college, or to a certified Canadian institution offering occupational training. Individuals wishing to claim the credit must also have been resident in Canada throughout 2020 and must meet certain income requirements and limitations for 2020.
The vast majority of Canadian taxpayers file their returns electronically, using NETFILE or E-FILE. At one time it was necessary, in order to NETFILE, to obtain an access code from the CRA in order to file electronically. That’s no longer the case, as the CRA now uses a taxpayer’s date of birth and social insurance number to satisfy their online filing security requirements.
This year, however, taxpayers who are using NETFILE have the option of including an access code as part of the return filed, for a different purpose. Some background is required to understand that purpose.
Taxpayers frequently contact the CRA (often through the individual’s income tax enquiries line at 1-800-959-8281) with questions about their particular tax situation. CRA representatives must, of course, confirm the identify of the person they are speaking to, in order to establish that that person is entitled to the information sought. To do so, the caller is required to answer questions beginning with their name, social insurance number, and date of birth, followed by questions which are specific to the information provided in their tax returns filed for previous years.
This year, taxpayers who include their particular access code in their return filings will be able to use information from the 2020 return as identifying information in any future contacts with the CRA, while those who choose not to provide the access code will not. (Note that such taxpayers should still be able to fulfill information security requirements by providing information filed in returns from other tax years.)
The access code which taxpayers can choose to include with the 2020 return filed was provided by the CRA on the taxpayer’s 2019 Notice of Assessment. That eight-digit alpha-numeric code can be found on page 1 of that Notice of Assessment, in the top right-hand corner.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Each year, the Canada Revenue Agency (CRA) publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. Those statistics for the 2020 filing season show that the vast majority of Canadian individual income tax returns — nearly 90%, or almost 28 million returns were filed online, using one or the other of the CRA’s web-based filing methods, or by telephone. The remaining 10% of returns were paper-filed.
Each year, the Canada Revenue Agency (CRA) publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. Those statistics for the 2020 filing season show that the vast majority of Canadian individual income tax returns — nearly 90%, or almost 28 million returns were filed online, using one or the other of the CRA’s web-based filing methods, or by telephone. The remaining 10% of returns were paper-filed.
Clearly, electronic filing is the overwhelming choice of Canadian taxpayers, and those who choose electronic filing this year have two choices — NETFILE and E-FILE. The first of those, NETFILE (used last year by just under 33% of tax filers), involves preparing one’s return using software approved by the CRA and filing that return on the Agency’s website, using the NETFILE service. The second method, E-FILE, involves having a third party file one’s return online. Almost always, the E-FILE service provider also prepares the return which they are filing. And, it seems that most Canadians want to have little to do with the preparation of their own returns, as last year 57% of all the individual income tax returns filed came in by E-FILE.
Those who are able and willing to prepare their own tax returns and file online can use the CRA’s NETFILE service (which is available as of February 22, 2021), and information on that service can be found at http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html. While there are some kinds of returns which cannot be NETFILED (for instance, a return for a non-resident of Canada, or for someone who declared bankruptcy in 2019 or 2020), the vast majority of Canadians who wish to do so will be able to NETFILE their return.
At one time, it was necessary to obtain and provide an access code in order to NETFILE. While such a code is no longer a requirement, the CRA has provided tax filers with a taxpayer-specific code which can be included with the return for 2020. That 8-digit alpha-numeric code is found (in very small type) in the top right-hand corner of the first page of the 2019 Notice of Assessment, just under the Date Issued line for that Notice of Assessment. Including the code with your return is not mandatory; however, the taxpayer will be able to use information from the 2020 return when confirming their identity with the CRA only if the code was provided on that return.
A return can be filed using NETFILE only where it is prepared using tax return preparation software which has been approved by the CRA. While such software can be found for sale just about everywhere at this time of year, approved software which can be used free of charge, or for a nominal charge, is also available. A listing of free and commercial software approved for use in preparing individual returns for 2020 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/certified-software-netfile-program.html.
Copies of the 2020 tax return and guide package can also be ordered online, at https://apps.cra-arc.gc.ca/ebci/cjcf/fpos-scfp/pub/rdr?searchKey=ncp%20, to be sent to the taxpayer by regular mail. Taxpayers can also download and print hard copy of the return and guide from the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html. In previous years, the CRA made some tax packages available in hard copy at Service Canada offices and post offices across the country. This year, however, there is no reference on the CRA website to such a distribution. Finally, the CRA will send, by regular mail, hard copy of the 2020 tax return and guide package to anyone who paper-filed a return for 2019 before November 30, 2020.
A minority of taxpayers will have the option of filing their returns using a touch-tone telephone. That option, called File my Return service will be available to eligible low-income Canadians whose returns are relatively simple and whose tax situation remains relatively unchanged from year to year. For such taxpayers, it is important to file, even if there is no income to report, so that they receive the benefits and credits to which they are entitled. The telephone filing option is, however, available only to taxpayers who are advised by the CRA of their eligibility for the File my Return service, and those individuals will have been notified by letter during the month of February.
Finally, taxpayers who are not comfortable preparing their own returns, but for whom the cost of engaging a third party to do so is a financial hardship, have another option. During tax filing season, there are a number of Community Volunteer Tax Preparation Clinics where taxpayers can have their returns prepared free of charge by volunteers. This year, most such clinics have had to change their usual in-person operation and adopt alternate methods. Volunteers can prepare an individual’s return, for free, by videoconference, by phone, or through document drop-off. A listing of the available clinics (which is updated regularly throughout the filing season) and their method of operation this tax season can be found on the CRA website at https://www.canada.ca/en/revenue-agency/campaigns/free-tax-help.html.
While there are a number of filing options available to Canadian taxpayers, there’s no element of choice when it comes to the filing and payment deadlines for 2020 tax returns. All individual Canadians must pay the balance of any taxes owed for 2020 on or before Friday April 30, 2021 — no exceptions and, absent very unusual circumstances, no extensions.
For the majority of Canadians, the tax return for 2020 must also be filed on or before Friday April 30, 2021. Self-employed taxpayers and their spouses have until Tuesday June 15, 2021 to file their returns for 2020 (but they too must pay any balance of 2020 taxes owing on or before Friday April 30, 2021).
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Income tax is a big-ticket item for most retired Canadians. Especially for those who are happily free of the requirement to make mortgage payments, the annual tax bill may be the single biggest annual expenditure they are required to make. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And, in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.
Income tax is a big-ticket item for most retired Canadians. Especially for those who are happily free of the requirement to make mortgage payments, the annual tax bill may be the single biggest annual expenditure they are required to make. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And, in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.
There is, however, another income tax saving strategy which is not nearly as well-known. Even more unfortunate is the fact that the benefits of that strategy (and the ease with which it can be accomplished) aren’t readily apparent from either the tax return form or the annual income tax guide. That tax saving strategy is pension income splitting, and it’s likely the case that many taxpayers who could benefit aren’t familiar with the strategy, especially if they are not receiving professional tax planning or tax return preparation advice.
That’s a particularly unfortunate reality because pension income splitting has the potential to generate more tax savings among taxpayers over the age of 65 (and certainly those over the age of 71, for whom RRSP contributions are no longer possible) than just about any other tax planning strategy available to retirees. In addition, it’s one of the very few tax planning strategies which require no expenditure of funds on the part of the taxpayer and which can be implemented after the end of the tax year, at the time the return for that tax year is prepared and filed.
When described in those terms, pension income splitting can sound like one of those “too good to be true” tax scams, but that’s not the case. Essentially, what pension income splitting offers is a government-sanctioned opportunity for Canadian residents who are married (and, usually, where recipient spouse is aged 65 or older) to make a notional reallocation of private pension income between them on their annual tax returns, and to benefit from a lower overall family tax bill as a result.
Pension income splitting, like all forms of income splitting, works because Canada has what is called a “progressive” tax system, in which the applicable tax rate goes up as income rises. For 2020, the federal tax rate applied to about the first $48,000 of taxable income is 15%, while the federal rate applied to the next $49,000 of such income is 20.5%. So, an individual who has $97,000 in taxable income would pay federal tax of about $17,320; however, if that $97,000 was divided equally between said individual and his or her spouse, each would have $48,500 in taxable income and the total federal family tax bill would be $14,550 — a federal tax savings of almost $2,800.
The general rule with respect to pension income splitting is that a taxpayer who receives private pension income during the year is entitled to allocate up to half that income (without any dollar limit) to his or her spouse for tax purposes. In this context, private pension income means a pension received from a former employer and, where the income recipient is age 65 or older, payments from an annuity, a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF). Government source pensions, like the Canada Pension Plan or Old Age Security payments, do not qualify for pension income splitting, regardless of the age of the recipient.
The mechanics of pension income splitting are relatively simple. There is no need to transfer funds between spouses or to make any change in the actual payment or receipt of qualifying pension amounts, and no need to notify a pension administrator. Taxpayers who wish to split eligible pension income received by either of them must each file Form T1032, Joint Election to Split Pension Income for 2020, with their annual tax return. That form, which is not included in the annual tax return package, can be found on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1032.html, or can be ordered by calling 1-800-959 8281.
On the T1032, the taxpayer receiving the private pension income and the spouse with whom that income is to be split must make a joint election to be filed with their respective tax returns for 2020. Since the splitting of pension income affects the income and therefore the tax liability of both spouses, the election must be made and the form filed by both spouses — an election filed by only one spouse or the other won’t suffice. In addition to filing the T1032, the spouse who is actual recipient of the pension income to be split must deduct from income the pension income amount allocated to his or her spouse. That deduction is taken on Line 21000 of his or her 2020 return. And, conversely, the spouse to whom the pension income amount is being allocated is required to add that amount to his or her income on the return, this time on Line 11600. Essentially, to benefit from pension income splitting, all that’s needed is for each spouse to file a single form with the CRA and to make a single entry on his or her 2020 tax return.
By the end of February or early March, taxpayers will have received (or downloaded) the information slips which summarize the income received from various sources during 2020. At that time, couples who might benefit from this strategy can review those information slips and calculate the extent to which they can make a dent in their overall tax bill for the year through a little judicious income splitting.
Those wishing to obtain more information on pension income splitting than is available in the 2020 General Income Tax and Benefit Guide should refer to the CRA website at http://www.cra-arc.gc.ca/pensionsplitting/, where more detailed information is available.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
Over the past month, millions of Canadians have received what was probably an unexpected (and unwelcome) communication from the Canada Revenue Agency (CRA), in the form of a T4A slip. That T4A slip lists the amount of pandemic benefits which were received by the individual in 2020 and represents, more significantly, the amount which must be reported on that individual’s income tax return for 2020 — and on which tax must be paid.
Over the past month, millions of Canadians have received what was probably an unexpected (and unwelcome) communication from the Canada Revenue Agency (CRA), in the form of a T4A slip. That T4A slip lists the amount of pandemic benefits which were received by the individual in 2020 and represents, more significantly, the amount which must be reported on that individual’s income tax return for 2020 — and on which tax must be paid.
When a public health emergency was declared in March of 2020, the focus for both the federal government and benefit recipients was getting benefits into the hands of eligible recipients as quickly as possible, to help mitigate the sudden financial crisis faced by so many. No income tax was deducted from the first round of benefit payments made, and it’s likely that not many recipients were focused on the fact that tax would eventually have to be paid on the amounts received.
However, tax filing time is now upon us, and the general rule is that all benefits received during 2020 under any of the following federal programs must be reported as taxable income on the return for 2020, and tax paid on that income:
Canada Emergency Response Benefit (CERB)
Canada Emergency Student Benefit (CESB)
Canada Recovery Benefit (CRB)
Canada Recovery Caregiving Benefit (CRCB)
Canada Recovery Sickness Benefit (CRSB)
The first program — the Canada Emergency Response Benefit — was utilized by nearly one quarter of the Canadian population, as nearly 9 million Canadians applied for partial or full CERB benefits. CERB was payable at a flat rate of $500 per week for a maximum of 28 weeks between March and September of 2020, meaning that the maximum benefit which could be received by one individual during 2020 was $14,000.
The Canada Emergency Student Benefit paid $1,250 every four weeks, for a maximum of 16 weeks, to post-secondary students who were unable to find summer or post-graduation employment due to the pandemic. The total amount payable to any one individual under the CESB program was generally $5,000, although higher amounts were paid to students who were disabled or who had dependants.
No income tax was deducted from any payments made under the CERB or CESB programs.
The last three programs — the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB) — replaced the CERB and CESB benefit programs, starting in September 2020. The benefit payable under each of those programs is $500 per week, but the amount of time for which that benefit is paid varies by program. Under the CRB, which is an income replacement program, the $500 per week benefit can be paid for up to 26 weeks. Benefits can be paid for a similar time period to those who must stay home for at least 50% of the week because they must care for a child under the age of 12 or other family member because schools, daycares, or care facilities are closed due to the pandemic, or because the child or family member is sick and/or required to quarantine, or is at high risk of serious health implications. Since these benefits became available starting on September 27, 2020, the maximum benefit which could have been paid to an individual in 2020 under either program was $7,000.
The final benefit — the CRSB — is available to individuals who are ill or who are required to quarantine, but only for a two-week period, meaning that the maximum CRSB benefit payable is $1,000.
The tax treatment of CRB, CRCB, and CRSB benefits paid out does differ slightly from CERB or the CSRB, in that the federal government deducted 10% withholding tax from CRB, CRCB, and CRSB benefits paid.
Whatever the source or amount of pandemic benefit received, the tax consequences are the same. All such benefits must be reported on line 13000 of the income tax return for 2020, and included in taxable income for that year. On that line of the tax return, there is a space provided in which the kind of benefit received should be specified.
The amount of tax payable on those benefit amounts will depend on the province of residence of the recipient and the amount of other income he or she received during 2020. As a basic rule of thumb, the federal tax on benefit amounts received will be at least 15%, while provincial tax payable can range from 4% (for residents of Nunavut) to 15% (for residents of Quebec). Where the total 2020 income of benefit recipients exceeds approximately $45,000, those tax rates will be higher.
Of course, the pandemic and the resulting financial stresses and losses have not yet ended. Many Canadians are still in a precarious financial position and it’s entirely possible that paying tax on benefits received during 2020 will be difficult for such taxpayers. Where paying such tax poses a real financial hardship, there are alternatives. The CRA is willing to enter into a payment arrangement with Canadians to pay their taxes over a period of time (generally through monthly instalments) where, owing to financial hardship, those taxes can’t be paid in full as required on April 30, 2021. In addition, the federal government has announced that interest relief on late tax payments will be provided to individuals who received pandemic benefits during 2020 and have income for that year of less than $75,000.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.