As the Canada 2017 Tax Filing Season begins, Canadian taxpayers should be aware that in 2016 the Canada Revenue Agency (CRA) introduced several changes to tax benefits, credits and deductions, effective for the 2017 tax season.
AGT’s Canadian tax professionals have prepared a brief overview of these major changes that you should be aware of.
New CRA Benefits from 2017 Onward
Eligible Educator School Supply Tax Credit
Qualifying teachers, and other educators may now be able to claim a 15% tax credit on up to $1,000 of qualifying teaching supply expenses incurred during the year. Additionally, this is a refundable tax credit, i.e. if you have ‘zero’ tax liability you could receive an amount equal to the 15%. The credit is available for 2016 and subsequent taxation years.
Home Accessibility Tax Credit
In 2016, the CRA introduced the Home Accessibility Tax Credit, which allows qualifying taxpayers to claim certain home renovations for disabled persons incurred on an eligible residence as a tax credit on their tax return. A maximum of $10,000 per year in eligible expenses can be claimed.
Canada Child Benefit (CCB)
The new Canada Child Benefit was introduced in 2016 replacing the Canada Child Tax Benefit (CCTB), Universal Child Care Benefit (UCCB), and National Child Benefit Supplement (NCBS). It is a monthly tax-free benefit to qualifying families with children below age 18.
The CCB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under the age of 18. Parents raising children with a disability can also claim Canada Disability Tax Credit and the Child Disability Benefit in addition to the CCB.
Other CRA Tax Changes
Income Splitting Tax Credit
The family tax cut has been eliminated for the 2016 year and future tax years. Unfortunately, Canadian taxpayers will no longer be able to split their income with their spouse earning lower income. Senior citizen taxpayers can, however, continue to split their pension income with their spouse or common-law partner to minimize their tax burden.
Children’s Fitness Tax Credit
The Children Fitness Tax Credit has been reduced from $1,000 to $500. However, for children with disability the benefit amount remains the same at $1,000.
Children’s Arts Tax Credit
The Children’s Art Tax Credit has also been reduced to $250 from the earlier amount of $500. The maximum for a child with a disability will be $750.
Northern Residents Deductions
If a Canadian taxpayer has lived on a permanent basis, in a prescribed northern or intermediate zone for a continuous period of at least six consecutive months, he/she may qualify for the Northern Residents Deduction. For 2016 and later years, the basic and the additional residency amounts used to calculate the northern residents’ deductions will be increased from $8.25 to $11 per day.
Mandatory Filing of Form 2091 to Claim Principal Residence Exemption
To prevent taxpayers from claiming the ‘Principal Residence Exemption’ multiple times for several properties without fulfilling the required eligibility conditions, the CRA has updated the ‘Principal Residence Exemption’ regulations. Beginning with the 2016 returns, even though the sale of a principal residence remains tax-free it will be mandatory to file CRA Form T2091 to report the sale.
If you need further information on these changes or have a tax situation that is complex with multiple tax slips, and expense claims, taxpayers should always reach out to a Canadian tax expert to ensure correct and compliant tax filing.
AG TAX LLP CAN HELP
If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of US and Canadian tax laws as well as cross-border compliance.
Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- US Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a tax consultation to discuss your US Canada cross border tax queries, please contact us at:
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