April 25, 2016 – Personal Income Tax What we used to call the “Harper Tax Credits” will disappear after you file your tax return this year. Personally, I don’t think that taking these away is a bad thing because these are things that don’t enhance the productivity of the economy. The federal budget of March 22, 2016 also unveiled a middle class tax cut, a boost to student grants and the guaranteed income supplement for single low income seniors, and a new high tax bracket rate.
Fitness and Arts Tax Credit In 2016 the limits for your kids’ sports and artistic activities for the fitness and arts tax credits, $1,000 and $500 respectively, will be reduced to half, and these credits will completely disappear in 2017. Education and Textbook Credits These credits were based on the number of months that you attended a post-secondary education program. You can still claim them in 2016 but will disappear in 2017. Credits for tuition fees can still be claimed, which appear on the T2202A that can be downloaded from your educational institution. Trudeau’s budget increased Canada student grant amounts by 50% for students from low – and middle-income families and part-time students which, I think, enhances the productivity of the economy better. Family Tax Cut The family tax cut can be claimed in your 2015 tax return for the last time. This was relevant for couples with at least one child under the age of 18 and allowed a higher-income spouse to transfer up to $50,000 to their spouse or common-law partner and save up to $2,000 in taxes. I will discuss other ways to split income with family members in another blog. Middle Class Tax Rate Cut For those making between $45,282 and $90,563 their taxes will decrease from 22 per cent to 20.5 per cent in 2016. The budget also increased taxes for those making above $200,000 from 29 per cent to 33 per cent. Guaranteed Income Supplement for Single Low-Income Seniors Trudeau’s budget boosts the guaranteed income supplement benefit for single, low income seniors by up to $947 annually, starting in July 2016. Notice to Reader Dean Constand CPA, CGA, LPA publishes this newsletter for information purposes only. Feel free to distribute to colleagues and friends. Although the material has been carefully prepared, it is not a substitute for professional advice.