No More Income Splitting
The federal government has eliminated the Family Tax Cut, also known as the Income Splitting Tax Credit. This measure allowed tax payers to transfer up to $50,000 of income to a lower earning spouse, if they have a child under 18 years old, to a maximum benefit of $2,000.
Changes to Child Benefits
As of July 2016, the Canada Child Benefit (CCB) has replaced the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS), and the universal child care benefit (UCCB).
Children’s fitness credits have been reduced to $500 for 2016 and are eliminated for the 2017 tax year.
Children’s arts credits have been reduced to $250 for 2016 and are eliminated for the 2017 tax year.
Teacher and Early Childhood Educator School Supply Tax Credit - New for 2016, teachers and early childhood educators who use their own money to pay for teaching supplies may claim a credit for up to $1,000. This is a tax credit worth 15% of the amount spent up to a maximum of $150…you’ll need to save your receipts or the credit may be denied.
Education Tax Credits
Federal Education and Textbook Tax Credits are being eliminated in 2017 (tuition costs may still be claimed). Any unused education and textbook credit amounts at the end of 2016 can still be carried forward to be claimed in 2017 and future years.
Principal Residence Designation
Beginning in 2016, any sale of a principal residence must be reported on a tax return even if the property is exempt from Capital Gains related to the Principal Residence Exemption.
Accessibility Renovation Rebate
Seniors, their spouses, and individuals that qualify for the Disability Tax Credit (DTC) can claim 15% of eligible home improvements up to $10,000 up to a maximum benefit of $1,500 under the Home Accessibility Tax Credit…again save your receipts.
Northern Residents Deduction
The basic and additional amounts used to calculate the northern residents deduction have both increased to $11 per day.
TFSA – Tax Free Savings Account
The annual contribution limit has decreased to $5,500 in 2016 from $10,000 in 2015. The cumulative contribution limit since inception of this program is now at $46,500.
Teacher and Early Childhood Educator School Supply Tax Credit - New for the 2016 tax year, teachers and early childhood educators who use their own money to pay for teaching supplies are able to claim a credit for up to $1,000. This is a non-refundable tax credit worth 15% of the amount spent up to a maximum of $150…you’ll need to save your receipts or the credit may be denied.
Tuition, Education and Textbook Amount - A Non-refundable Tuition credit is available and worth 15% of the total paid for a post-secondary level education. In addition to this, there is a federal Education Amount of $400 per month for full-time students and $120 per month for part-time students (provincial amounts are also available). Students may also claim a Textbook Amount of $65 per month of full-time and $20 per month of part-time attendance. Note that 2016 is the last year for both the Education and Textbook Amounts.
No need to save receipts to claim these amounts. Any qualifying educational institutions, including schools outside Canada, will issue a T2202A to students or require a TL11A-D to be completed.
Where a student earns more tax credits than they require in the current year, they may either carry forward those credits (for up to five years) or transfer a portion to their spouse or other supporting individuals (eg. parents).
Transit Passes - If you use public transit such as buses, streetcars, subways, commuter trains, and local ferries, save your receipts as you may be able to claim this cost as a deduction on your tax return.
Child Care - You may be able to deduct child care expenses if you need to pay someone to look after your child so you can attend school.
Student Loan Interest - You may be eligible to claim the interest paid on your Student Loan in the current or the preceding five tax years for post-secondary education if received under: the Canada Student Loans Act; Apprentice Loans Act; Canada Student Financial Assistance Act or similar provincial or territorial government laws.
Moving Expenses - If you moved at least 40km to attend full-time post-secondary studies, you may be able to claim certain moving expenses. This expense is only deductible from scholarship or award income received in the year, as well as from employment income earned in the new location while at school. Moving expenses may also be claimed for moving to educational institution at the beginning of each academic period and for the move back after a summer recess.
Beginning Wednesday July 20, 2016, many Canadian families with children under 18 can expect to see an increased child benefit payment via the new Canada Child Benefit (CCB) program.
Under the previous system, families could receive both the Canada Child Tax Benefit (CCTB) and the Universal Child Care Benefit (UCCB). The CCTB was based on income but the UCCB was universal.
The UCCB provided $160 for every child per month under 6 and $60 per month for children aged 6 to 17. That money was paid out regardless of income level.
The new CCB combines the CCTB and UCCB into a single payment, is entirely based on income level and also tax-free. This will result in lower income households receiving more money than higher income families.
Under the new CCB, families with kids under the age of 6 will receive as much as $6,400 per child annually and $5,400 for kids between the age 6 and 17.
This will result in families with net income below $30,000 per year receiving the maximum and families earning more than $200,000 per year having their payments eliminated completely.
If you’ve been receiving child benefits and are up to date on your income tax return filings, there is no need for you to apply for the new benefit. Your notice of eligibility status will be mailed out and payment directly deposited into your account or cheque sent out in the mail.
See how much you may be entitled to: http://www.cra-arc.gc.ca/benefits-calculator/