Top things families should know about taxes
The following tips may help you or your family:
Individuals and families
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Canada child benefit (CCB) – As of July 2016, the CCB has replaced the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS), and the universal child care benefit (UCCB). For more information see Canada child benefit.
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Northern residents deductions – The basic and additional residency amounts used to calculate the northern residency deduction have both increased to $11 per day. See Form T2222, Northern Residents Deductions. For more information see line 255.
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Climate Action Incentive - new tax credit for 2018 available in Saskatchewan, Manitoba, Ontario and New Brunswick - line 449
The climate action incentive (CAI) payment consists of a basic amount and a 10% supplement for residents of small and rural communities. This payment may reduce your amount payable or increase your refund when you file your income tax and benefit return. |
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Home accessibility expenses – You can claim a maximum of $10,000 for eligible expenses you incurred for work done or goods acquired for an eligible dwelling. For more information see line 398.
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Eligible educator school supply tax credit – If you were an eligible educator, you can claim up to $1,000 for eligible teaching supplies expenses. For more information see lines 468 and 469.
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Family tax cut – The family tax cut has been eliminated for 2016 and later years.
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Children’s fitness tax credit – The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $500. Eliminated for 2017 and later tax years. For more information see lines 458 and 459
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Children’s arts amount – The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $250. Eliminated for 2017 and later years. For more information see line 370.
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Public transit amount (line 364) – As of July 1, 2017, this amount has been eliminated.
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Interest and investments
Tax-free savings account (TFSA) – The amount that you can contribute to your TFSA every year has been increased to $6,000 in 2019. Please see further notes, below.
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Investment tax credit – Eligibility for the mineral exploration tax credit has been extended for flow-through share agreements entered into before April 2017. For more information see line 412
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Labour-sponsored funds tax credit – The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations has been restored to 15% for 2016 and later tax years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has decreased to 5% and will be eliminated for 2017 and later tax years. For more information see lines 413, 414, 411, and 419.
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Tax-Free Savings Account (TFSA)
Beginning in 2016, Canadian residents 18 years of age and older can each contribute up to $5,500 annually, plus any unused contribution room from previous years, to a tax-free savings account.
Beginning in 2016, Canadian residents 18 years of age and older can each contribute up to $5,500 annually, plus any unused contribution room from previous years, to a tax-free savings account.
- Contributions to a TFSA are not deductible for income tax purposes.
- Interest on money borrowed to invest in a TFSA is not tax deductible.
- Contributions to and income earned in a TFSA are tax-free upon withdrawal.
- You can give money to your spouse for a TFSA contribution, and the income earned on the contributions in your spouse’s TFSA will not be attributed back to you.
- Investment income earned by, and changes in the value of TFSA investments will not affect your TFSA contribution room for the current or future years.
- You will accumulate TFSA contribution room for each year even if you do not file an income tax and benefit return or open a TFSA.
The annual TFSA dollar limit for the years 2009, 2010, 2011 and 2012 was $5,000.
The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.
The annual TFSA dollar limit for the year 2015 was $10,000.
The annual TFSA dollar limit for the year 2016, 2017 and 2018 was $5,500.
The annual TFSA dollar limit for the year 2019 is $6,000.
The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500.
Tax rates are significantly more favourable for dividend income than interest income.
- The personal tax rates in Ontario for 2019, 2018 and 2017 are as follows:
- Re-evaluate your investment strategy by comparing the pre-tax dividend rates with the pre-tax interest rates.
Other changes (2018 forms will not be available from CRA until Feb-28-2019)
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Tax on taxable income – The tax rates and income levels have changed. See Schedule 1, Federal Tax. As a result of this change the donations and gifts tax credit calculation has changed. For more information see Schedule 9, Donations and Gifts
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Tax on Split Income (TOSI) of a child under 18 and on certain adults – The tax rate has increased to 33%. For more information see Split Income Rules.
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Reassessment period - Under proposed legislation, for tax years that end after October 2, 2016, the CRA may at any time reassess your income tax return if you fail to report a sale or other disposition of real estate.
See the Guide T4037, Capital Gains. |
Sale of principal residence – The sale of a principal residence must now be reported, along with any principal residence designation, on Schedule 3. See Schedule 3, Capital Gains (or Losses). Under proposed changes, the CRA will be able to accept a late designation in certain circumstances, but a penalty may apply. Go to Reporting the sale of your principal residence for individuals (other than trusts) and select question 7
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The Liberal Government has implemented changes to the tax rules associated with the disposition of a principal residence and the eligibility for the principal residence exemption (PRE). The following new rules have been introduced:
- A non-resident will not be eligible for the PRE in respect of the year a property is acquired unless he/she was a resident of Canada in that year.
- Only certain trusts will be eligible to claim the PRE. Many ordinary family trusts holding a principal residence that is inhabited by one or more beneficiaries will have restrictions on the PRE under the new rules. There are transitional rules that will allow such trusts to utilize the PRE on the accrued gain on the property up to December 31, 2016. Any future appreciation in the property would be subject to tax.
- The property can be distributed to one of the beneficiaries (only to the extent he/she ordinarily inhabits it) on a tax-deferred basis. The beneficiary can then sell the property and claim the PRE personally. The transfer of the property from the trust to the beneficiary can occur after December 31, 2016, but the beneficiary must continue to ordinarily inhabit the property if he/she wants to fully shelter the gain with the PRE on a future sale. Note that the trust itself will no longer be eligible to claim any portion of the PRE in respect of gains accrued after December 31, 2016.
- All dispositions of principal residences must be reported on Form T2091, whether or not the gain is sheltered by the PRE. Penalties for non-compliance will apply. Reporting requirements apply for the 2016 and future tax years.
- CRA may reassess a taxpayer's return beyond the three year normal statutory assessment period when a disposition of a principal residence is not reported.
