The 2017 Federal Budget was released on
March 22, 2017. It promotes the idea of
making the tax system fairer for the middle class. Some of the items that may affect
you, your family and your business include the following items.
Cracking down on
tax evasion - The budget proposes to spend
$524 million over five years on curbing tax evasion and improving compliance.
The efforts are projected to add up to $2.5 billion in revenue over the
five-year period. In other words, CRA will be doing more audits on individual
tax payers.
T4 Slips - Effective for the 2017 and subsequent tax years, it is proposed
that T4s will be permitted to be issued electronically without the employer
first being required to receive the express consent from the employees. In
order for this to be permitted, safeguards required by CRA must be in place.
Paper copies must be provided to employees who specifically request them.
Tuition
Tax Credit - Currently, the 15% tuition tax credit
is not available with respect to occupational skills courses offered by a
university or college that are not at the post-secondary level. The Budget
proposes extending the eligibility for these credits to such skills courses
taken after 2016. For instance, this could include courses taken to improve
numeracy or literacy to improve job skills.
Public
Transit Tax Credit - This 15% non-refundable tax
credit is available against the cost of certain public transit passes.
Effective July 1, 2017, it is proposed that the Public Transit Tax Credit will
be eliminated. Instead, the government will allocate funds to improve public transit.
Parental Benefits - The proposed changes to parental benefits would allow parents to choose to receive employment insurance parental benefits over an extended period of up to 18 months at a lower benefit rate of 33% of average weekly earnings. Parental benefits will continue to be available at the existing benefit rate of 55% over a period of up to 12 months.
Caregiving benefit - The government’s proposed new employment insurance caregiving benefit of up to 15 weeks, which would be in addition to the current compassionate care benefit and the program for families with severely ill children, will cover a broader range of situations where individuals are providing care to an adult family member who requires significant support in order to recover from a critical illness or injury.
Caregiver
Tax Credit - Currently those providing “caregiving”
to another are potentially eligible to claim three different tax credits: the
infirm dependent tax credit, the caregiver credit and the family caregiver tax
credit. The Budget proposes simplifying the credit system for caregivers, by
replacing these three credits with one new credit entitled the “Canada
Caregiver Credit”. This will be effective for the 2017 and subsequent taxation years.
Canada
Savings Bonds Being Eliminated - After more than 70
years, Canadians will be saying goodbye to a once-popular option for investing.
Sales of new Canada Savings Bonds will be discontinued in 2017.
Tax planning
using private corporations - After initiating
a broad review of tax strategies that typically benefit the wealthiest
Canadians in last year’s budget, the government says it’s continuing to examine
the use of tax planning strategies involving private corporations. Some areas
that are being reviewed include such strategies as
income sprinkling (using a private corporation and a shareholder’s family
members), making passive investments through a corporation (instead of
personally) and converting regular corporate income to capital gains. No specific
proposals were outlined in Budget 2017; the government says it expects to
release a paper in the coming months with more detail.
Posts
