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TaxTips Dec 2019: 2020 Personal tax credit increase; Vehicle taxable benefits; Climate action incentive; Calculator updates; disability benefit; much more!
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Wishing you all a Happy and Healthy 2020!

Important Dates

NetFile is available 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.

RRSP Contribution Deadline:  March 2, 2020 is the deadline for making RRSP contributions for the 2019 tax year.

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.

2020/2019 Canadian Tax & RRSP Savings Calculator

This very detailed calculator is great for tax planning - how much should you put into RRSPs? For all provinces and territories except Quebec.  Now includes the enhanced federal personal and spousal/eligible dependant amounts for 2020.

2020/2019 Quebec Tax & RRSP Savings Calculator

The detailed Quebec calculator is a great tax planning tool - let it help you determine how much to put into RRSPs.  Now includes the enhanced federal personal and spousal/eligible dependant amounts for 2020.

2020 Basic Tax Calculator

This very simple tax-planning calculator for 2015 to 2020 shows taxes payable and marginal tax rates for all provinces and territories.  It now includes the increased federal personal tax credit for 2020.

Personal Tax

Life in the Tax Lane January

This month's video discusses: 

  •  Climate Action Incentive (CAI);
  •  Enhanced basic personal amount; 
  •  Contribution to employee's crowdfunding campaign - employment benefit?; 
  •  Gross negligence penalties - magnitude of unreported income; 
  •  New process for authorizing representatives CRA access; 
  •  TOSI: Excluded business - holidays, vacation and sick days.

Increased Federal Personal Tax Credits

On Dec 9th, the federal government presented legislative proposals that would increase the basic personal amount (BPA) for 2020 and later years, increasing to $15,000 by 2023. The spousal and eligible dependant amounts will also be increased. For 2020, the maximum increase in the tax reduction is $139.65 per person.

2020 Climate Action Incentive (CAI) Amounts for 2019 Tax Return

2020 CAI amounts will be claimed as a refundable tax credit on the 2019 tax return by residents of Alberta, Saskatchewan, Manitoba, and Ontario.

Federal Home Accessibility Tax Court Case

Patrie v. The Queen was heard in November 2019 and was a win for the taxpayer, even though unsafe stairs were replaced with safe stairs PLUS a deck, increasing the cost significantly.  The judge made it very clear that CRA can only use the applicable provisions of the Income Tax Act to determine eligibility for the tax credit.

Financial & Estate Planning / Registered Plans / Investing

RRSP Deadline Monday, March 2, 2020

March 2, 2020 is the deadline for making your RRSP contributions for the 2019 taxation year. RRSPs are one of the best tax-saving tools available to Canadians, but if you're currently low income, TFSAs would likely be better for you.

RRSP Contribution Not Recorded on Previous Year Tax Return

If you made RRSP contributions from March 1, 2018 to March 1, 2019, this should have been included on Schedule 7 which was filed with your 2018 tax return.  Check our article to find out what to do if the contribution wasn't recorded.

2020 Maximum Withdrawals Federally-Regulated LIFs and LRIFs

The rates for 2020 maximum withdrawals from federally-regulated LIFs and LRIFs are now available on the website of the Office of the Superintendent of Financial Institutions.

Canada Pension Plan

Canada Pension Plan (CPP) Disability Benefit

Do you have a severe and prolonged physical or mental disability which makes you unable to work at any job on a regular basis? If you are under 65 and have contributed enough to the CPP you may be eligible for a disability benefit.

Cancellation of Canada Pension Plan Retirement Benefits

CPP benefits can be cancelled for up to 6 months after starting the pension, but all the benefits received must be repaid.  CPP and OAS benefits must be cancelled after the death of a CPP or OAS recipient.

Business

T4 Slips - Requirements and Timing

Employment income is included on a T4 for the year in which it is received, not earned.  If payment is made in January 2020 for wages earned in December 2019, this amount will be reported on the 2020 T4, not on the 2019 T4 (see exception re employee trusts).

Tax-Free Motor Vehicle Allowances 2020

The per-kilometre amounts that may be paid tax-free to employees or officers as reimbursement for motor vehicle expenses incurred while travelling for business purposes using their personal vehicle will increase by 1 cent, to 59 cents per km for the first 5,000 km and 53 cents per km for each additional km.  For the Territories, the rates are also increased by 1 cent, to 63 cents per km for the first 5,000 km and 57 cents per km for each additional km.

Automobile Operating Cost Benefit 2020

The prescribed rate used to determine the operating cost taxable benefit to an employee for an employer-owned vehicle remains the same, at 28 cents per kilometre.  The standby charge taxable benefit factors for automobiles also remain unchanged.

Automobile Sales People Operating Cost Benefit 2020

The prescribed rate used to determine the operating cost taxable benefit to an automobile sales person for an employer-owned vehicle remains the same, at 25 cents per kilometre.  The standby charge taxable benefit factors for automobiles also remain unchanged.

Passenger Vehicle Expense Limitations 2020

The 2020 expense limitations for passenger vehicles for interest expense, monthly lease costs, and capital cost allowance (CCA) for zero-emission and non-zero-emission vehicles will remain unchanged from 2019.

Government / Budgets

Manitoba Probate Fees

Manitoba will eliminate probate fees effective July 1, 2020, and will eliminate provincial sales tax on will preparation effective January 1, 2020.

Amateur Athletic Trusts Extension

Legislation has been proposed that would extend the maturation period of amateur athletic trusts by one year.  These trusts maturing in 2019 would now mature in 2020.

If you need tax or financial help, check our Directory for links to Accounting, Bookkeeping and Financial Planning organizations in Canada.  Canadian income tax is getting more complicated every year, and getting your tax return prepared or reviewed by a professional may save you money!

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