New TaxTips.ca Content as it Happens

March 31, 2019: Deadline for BC's Speculation and Vacancy Tax Declaration

Tuesday April 30, 2019: Due date for 2018 personal income tax returns.  Self-employed individuals have until Monday, June 17th to file their 2018 personal tax returns, but any amounts owing must be paid by April 30th.

NetFile is available February 18, 2019 until January 24, 2020, for filing 2015 to 2018 personal tax returns. EFile is available for the same period, for filing 2015 to 2018 personal tax returns.

Canadian Financial & Income Tax Calculators

We have lots of calculators - re income tax, borrowing, investing, RRIF withdrawals, US estate tax for Canadians, CPP retirement pension calculator and more.

Detailed Canadian Income Tax and RRSP Savings Calculator

Includes most tax credits and deductions, includes taxpayer and spouse, tells you if all your donations are not all being utilized.  It can't file your tax return but can certainly help in tax planning.

Personal Tax

Life in the Tax Lane April 2019

Topics this month: Federal 2019 Budget - zero-emission vehicles, housing measures, shared equity mortgages, Canada training credit; "nominal" consideration on gift of capital property; current expense vs capital expenditure.

Age Amount Tax Credit

The age amount tax credit is a non-refundable credit, and is reduced when income exceeds a certain threshold, both federally and provincially.  Capital gains can cause income to exceed the threshold, and offsetting capital losses carried forward won't help with this.

Property Rental Deductible Expenses

If you rent out one or more rooms in your home, or if you own a rental property, there are many expenses that can be deducted in calculating your net rental income.  Claiming capital cost allowance (CCA) on the home may result in the loss of the principal residence exemption when you eventually sell your home.

Tax Information for Students

Learn about scholarships, who can still claim tuition and education tax credits, student loan interest, how eligible Canadian dividends may affect student tax credits.

For Which Province Do I File a Tax Return?

Under normal conditions, a person files a tax return for the province in which they are residing on December 31 of the taxation year.  A person will be determined to be resident in the province in which they have the most significant residential ties, which may not be the province in which they are employed.

Old Age Security Clawback and Your Tax Return

If your 2018 OAS was reduced by a "recovery tax", this tax is treated like an income tax instalment.  On your 2018 tax return, your clawback will be recalculated based on 2018 income.  Any taxes owing, including the clawback, will be reduced by the recovery tax paid during 2018.

Eligible Retiring Allowance Received First 60 days of 2019

If you received an eligible retiring allowance that was directly transferred to an RRSP in Jan 1 to Mar 1 2019 it must be recorded on the 2018 Schedule 7.  However, since the T4 will be for 2019, not 2018, the reporting is different from the usual, and must be done properly in order to avoid future problems.

Donations Tax Credit

Generally, the tax credit for the first $200 of donations is at the lowest tax rate, and the remainder at the highest tax rate, but there are many provincial exceptions to this.  If you're carrying forward donations this is fairly easily done using tax software, but using printed forms you'll have to track things from year to year yourself.

Understanding TaxTips.ca Tables of Marginal Tax Rates

Our tax tables do not include low income tax reductions, health or other premiums, or the NL deficit reduction levy which can add 10% to the marginal tax rate at various levels of taxable income.  You can use our Tax Calculator to determine your actual marginal tax rate - see the note at the bottom of the calculator.

Medical Expense Tax Credit - Spouses

A couple will usually get a higher medical expense tax credit if all expenses are combined on the tax return of one spouse - usually the lowest income spouse.

Reporting the Sale of Your Principle Residence on Your Tax Return Using Tax Software

On Schedule 3 Line 179, you must indicate if you lived in your home for all the time that you owned it.  If yes, no need to enter proceeds or ACB on Schedule 3.

Financial Planning / Registered Plans / Investing

Worthless Shares or Debt

Do you have a worthless investment?  Can't sell it because it has been delisted?  There may be a way to claim the capital loss.

Tax Treatment of Income From Investments in Exchange-Traded Funds (ETFs)

Whether you own foreign or Canadian ETFs, you should know the tax consequences of the income from them, and how to calculate your adjusted cost base (ACB).  With Canadian ETFs, you need to know about reinvested distributions and how they increase your ACB, thus reducing your capital gain when the ETF is sold.

Eligible Dividends and the Enhanced Dividend Tax Credit

When individuals receive dividends from Canadian public corporations, 138% of the dividend is included in taxable income. The additional 38% is called the "gross-up".  However, after applying the enhanced dividend tax credit, the tax on these dividends is much less than it would be on employment income, interest, or foreign dividends.

Tax Treatment of Different Types of Investments

If you sold or had a deemed disposal of an investment in 2018, it is your responsibility to ensure that it is properly reported on your 2018 income tax return, even if you use a professional tax preparer.  It's quite possible that not all dispositions will be on the T5008 provided by your brokerage - they still must be reported.

Ready to Invest? Recommended Stocks

If you're a novice investor, or just don't have the time or inclination to pick stocks, see our recommended stocks.

Sales Taxes

2019 Sales Tax Rates - GST/HST, PST, RST, QST

Our table of sales tax rates has 2 changes so far for 2019:  Manitoba's retail sales tax rate will go down to 7% on July 1st, and in BC, electricity will be fully exempt from PST on April 1st.  Residential electricity has always been exempt, so this only affects businesses.

Legislation / Budgets

Federal 2019 Budget - March 19, 2019

The budget includes: an increase to the RRSP Home Buyers' Plan withdrawal limit; new personal tax credit for certain digital subscriptions; changes re RDSP termination requirements; new Canada Training Credit for work earnings for those age 25 to 64; 100% CCA for certain zero-emission vehicles; and other measures.

Provincial/Territorial Budgets
The Ontario Budget will be tabled April 11th.  Newfoundland and Labrador's budget will be tabled sometime in April.  Elections coming up:  Alberta on April 16th and PEI on April 23rd.

Nova Scotia 2019 Budget - March 26, 2019

There were no new tax measures other than a new Venture Capital Personal and Corporate Tax Credit, and phasing out of the Equity Tax Credit.

Manitoba 2019 Budget - March 7, 2019

Manitoba is reducing the retail sales tax from 8% to 7% effective July 1, 2019.  There were no personal or corporate income tax rate changes, but several business tax credits were extended.

Yukon 2019 Budget - March 7, 2019

There were no personal or business tax changes in the Yukon budget.

New Brunswick 2019 Budget - March 19, 2019

No tax increases in the NB budget.  The current rules for the NB Small Business Corporate Income Tax Rate will be maintained rather than implementing the federal passive income tax measure.

Saskatchewan 2019 Budget - March 20, 2019

The only tax change in the SK budget was the introduction of new tax credits for volunteer firefighters and emergency medical first responders.

Quebec 2019 Budget - March 21, 2019

The experienced worker tax credit is enhanced and renamed the Tax Credit for Career Extension; New refundable tax credit for SMBs to encourage them to hire or retain workers age 60+; Changes re refundable tax credit for reporting of tips; Digital accommodation platform operators must register for and collect the tax on lodging.

Nunavut 2019 Budget - February 20, 2019

There were no tax changes announced in the Nunavut budget.