News

FEBRUARY 2024 - WHAT'S NEW FOR 2024 FROM CRA

WHAT’S NEW FOR INDIVIDUALS
The following changes apply for the first time to 2023 T1 personal tax returns for individuals, which are generally due on April 30, 2024.

Advance Canada Workers Benefit payments: Taxpayers no longer have to apply for advance payments of the Canada Workers Benefit (CWB) when they file their tax returns. These payments are now issued automatically to those who were entitled to receive the benefit in the previous tax year. Form RC201, Canada Workers Benefit Advance Payments Application, is discontinued.

Deduction for tradesperson’s tools expenses: Starting in 2023, employees can deduct up to the $1,000 for tradesperson’s tools expenses (increased from $500).

First Home Savings Account (FHSA): The FHSA is a new registered account to help individuals save for their first home. Starting in 2023, contributions to an FHSA are deductible and the income earned in an FHSA is not taxable. Qualifying withdrawals from an FHSA to purchase a first home are also not taxable. See our previous tax blog for more information.

Multigenerational Home Renovation Tax Credit: This new refundable tax credit is available for up to $7,500 (15 per cent of $50,000) of the costs of a qualifying renovation to an eligible dwelling that is completed to allow a qualifying individual to live with a qualifying relation. You can claim the credit (see T1, Schedule 12) for qualifying expenditures made or incurred after December 31, 2022, for services performed or goods acquired after that date.

Residential property flipping rule: Starting on January 1, 2023, a new deeming rule applies to ensure profits from flipping residential real estate are always fully taxed. The rule deems profits from dispositions of residential property (including rental property) that was owned for less than 365 days to be taxable business income instead of capital gain, with exemptions for death, breakdown of a marriage or common-law partnership, eligible relocations and other life events. The flipping rules also apply to assignment sales.

Working from home deduction: The temporary flat rate method for claiming employees’ home office expenses only applied for 2020 to 2022 and is no longer available. For 2023 and future years, employees need to follow the detailed method to make these claims.

WHAT’S NEW FOR BUSINESSES
Immediate expensing of capital: This incentive was applicable to eligible property available for use before January 1, 2024. In the case of individuals and Canadian partnerships (all the members of which are individuals), this incentive remains in place for eligible property available for use before January 1, 2025.

Accelerated investment incentive: Eligible property for this incentive must be acquired after November 20, 2018, and be available for use before January 1, 2028. For eligible property that becomes available for use after 2023, a phase-out period applies reducing the overall capital cost allowance over 2024 to 2027.

WHAT’S NEW FOR TRUSTS
Beneficial ownership reporting: All trusts with tax years ending after December 30, 2023, must annually file a T3 Income Tax and Information Return, including additional beneficial ownership information (unless exclusions apply). This includes bare trusts, which were previously not required to file. For the 2023 tax year, the late-filing penalty for bare trusts would be relieved, provided the return and beneficial ownership information are ultimately filed. Other penalties may apply if failure to file was made knowingly or due to gross negligence.

OTHER KEY DEVELOPMENTS
Electronic payments: Newly enacted legislation requires taxpayers to remit tax payments over $10,000 electronically or pay a penalty of $100 per payment. The CRA stated to CPA Canada that it expects to allow a grace period before enforcing the rules. During this time, the CRA will continue educating taxpayers on electronic payment options and encouraging them to pay electronically.

Underused Housing Tax (UHT): In the 2023 Fall Economic Statement, changes were proposed to the UHT rules in line with CPA Canada’s recommendation to define “excluded owners” for UHT purposes to include “specified Canadian corporations,” partners of “specified Canadian partnerships,” and trustees of “specified Canadian trusts.” These excluded owners would no longer have UHT reporting obligations for 2023 and future years.

Short-term rentals: In its 2023 Fall Economic Statement, the federal government proposed to deny deductions for short-term rentals for taxpayers where there is non-compliance with provincial or municipal laws or regulations related to short-term rentals, starting on January 1, 2024




JANUARY 2024 - FILING T4s ELECTRONICALLY 
The threshold for mandatory electronic filing of income tax information returns for a calendar year has been lowered from 50 to 5 for information returns filed after December 31, 2023.  There is a penalty for filing by paper if you are required to file electronically. 


JANUARY 2024 - New Enhanced CPP2, starts Jan 1, 2024
For anyone earning more than that amount, is a second contribution level that tops out at $73,200.
People in this group pay an additional four per cent on their second tier earnings, or the amount they make between $68,500 and $73,200.
For 2024, that means a maximum $188 in additional payroll deductions. Overall, people earning over $73,200 will be contributing an extra $300 in 2024, compared to their previous contribution last year.

 

JANUARY 2024 - T4 Reporting re Dental Coverage
There is a new mandatory information box on the T4s.  It's tells the government if your employee has any dental coverage and if so, what kind. There will be a penalty for every T4 filed without this new box.

Box 45 corresponds to the type of coverage that your employee is eligible to receive:

1 - No dental insurance or coverage of any kind
2 - Payee
3 - Payee, spouse and dependent children
4 - Payee and their spouse
5 - Payee and their dependent children

OCTOBER 31, 2023 - The Minister of National Revenue announces that owners affected by the Underused Housing Tax (UHT) will have until April 30, 2024, to file their returns for the 2022 calendar year without being charged penalties or interest. 


OCTOBER 1, 2023 - As of October 1, 2023 minimum wage has increased to $16.55 per hour.


SEPTEMBER 2023 - Recent update regarding the Canada Emergency Business Account (CEBA) loan repayment deadlines
 

On September 14, 2023, the Prime Minister announced extended deadlines for Canada Emergency Business Account (CEBA) loan repayments, providing an additional year for term loan repayment, and additional flexibilities for loan holders looking to benefit from partial loan forgiveness of up to 33 per cent.

 

Extended Repayment Deadlines: The repayment deadline for CEBA loans to qualify for partial loan forgiveness of up to 33 per cent is being extended from December 31, 2023, to January 18, 2024, recognizing that the end of December is a busy time for many Canadian businesses. This builds on the government's previous one-year extension announced in January 2022.

 

Refinancing Opportunity: For CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan by January 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024. This will allow more small businesses and not-for-profits to access relief and give them more time to hear back from their financial institutions on refinancing applications.

 

Loan Conversion to a 3-year term loan: As of January 19, 2024, outstanding loans, including those that are captured by the refinancing extension, will convert to three-year term loans, subject to interest of five per cent per annum, with the term loan repayment date extended by an additional year from December 31, 2025, to December 31, 2026. Small businesses will automatically have access to a three-year, low-interest loan of up to $60,000 if they have not repaid or refinanced their loan. This will provide those who are unable to secure refinancing or generate enough cashflow to repay their loans by the forgiveness deadline an additional year to continue repayment at a low borrowing cost.

 

Loan Forgiveness: Repaying your CEBA loan on or before the new deadline of January 18, 2024 (or by March 28, 2024, if you submit a refinancing application before January 18, 2024), will make you eligible for loan forgiveness. For a $40,000 loan, you can receive $10,000 in partial loan forgiveness, and for a $60,000 loan, you can benefit from $20,000 in partial loan forgiveness.

JUNE 2023 - As of June 13, 2023, the Disability Tax Credit Paperwork can be filled out using their digital online application.  Applicants complete Part A of the application with their personal information. Once complete, they will receive a reference code.  They give the reference code to their doctor and they fill out Part B. Once the doctor fills out Part B, the application automatically is sent to CRA for processing.  Part B must only be completed by the medical practitioner. Applicants cannot complete Part B themselves. If an applicant completes Part B themselves, it will not be processed.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit/how-apply-dtc.html


MARCH 2023 - Due to challenges on their end, the government has extended the filing deadline for the UHT return until October 31, 2023. 


MARCH 2023 - The Underused Housing Tax (UHT) is an annual 1% tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022. The tax usually applies to non-resident, non-Canadian owners. In some situations, however, it also applies to Canadian owners.  The deadline for this new tax return is April 30th and carries with it a $10,000 non-filing penalty.  Please contact the office if you are a non-resident or your corporation owns a residential or mix residential property to find out if you are required to file this new tax return. 
https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html


JANUARY 2023 - Starting in April 2023, first home savings account (FHSA) will be available to first time home buyers. There both an annual and a lifetime contribution limit. See government website for more information.


DECEMBER 2022 - How to tell if it's CRA that's calling you??  Read the article from CRA here:
https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2022/not-sure-cra-calling-here-how-to-find-out.html


OCTOBER 2022 - The government has now made it mandatory to register for My Business Account in order to submit authorization requests for our office to speak to the government on your behalf.  If you need assistance with setting this up, please contact our office.


PERSONAL TAXES 2021 - What's new in personal taxes for 2021? Click here


FEBRUARY 2022 - CEBA Loan Repayment Deadlines have changed. The repayment deadline for CEBA loans to qualify for partial loan forgiveness is being extended to December 31, 2023, for all eligible borrowers in good standing


JANUARY 2022 - CEWS and CERS are finished and new programs for Tourism and Hospitality Recovery Program (THRP) and Hardest-Hit Business Recovery Program (HHBRP) are now available.  However, these two new programs are much harder to qualify for.  
Applications are now open for these new programs.


JUNE 2021 - Proposed in budget - Canada Recovery Hiring Program (CRHP) - Employers would have to choose between receiving CRHP or CEWS.
https://www.budget.gc.ca/2021/report-rapport/anx6-en.html#canada-recovery-hiring-program


MAY 2021 - The chart below is for informational purposes only. Please read the official website(s) or contact the government for full eligibility criteria.  




March 2021 - Home office expenses for employees has two methods. First is the regular detailed method where you claim the actual amounts your paid, supported by documents and you must have a signed T2200 or T2200S by your employer.  The second method is new for eligible employees working from home in 2020 due to the COVID-19 pandemic. In this method you get a flat $2/day to a maximum of $400 for each you worked from home. You do not need to keep supporting documents and you do you need a signed T2200.


December 23, 2020 - The Ontario government is announcing the new Ontario Small Business Support Grant, which will provide a minimum of $10,000 and up to $20,000 to help small business owners during this challenging period. Details on how to apply to be announced in January 2021. 
https://www.news.ontario.ca/en/backgrounder/59788/post-4


October 9, 2020 - Federal and Provincial COVID-19 Announcement:
- Rent subsidy (CERS) - new until June 2021 - provided directly to tenants. Would support businesses that have a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a max of 65% of eligible expenses until Dec 19, 2020. Claims can be made retroactively for the period that began September 27th and ends October 24, 2020. A top up emergency rent subsidy of 25% for organizations temporarily shut down by a mandatory public health order. This is in addition to the 65%. 
- Wage subsidy (CEWS) - extended until June 2021 - remains at the current subsidy rate  of up to a maximum of 65% of eligible wages until December 19, 2020.
- Interest Free Loan (CEBA) - expanded access to an additional 20k loan, 10k of which is forgivable if repaid before December 31, 2022. Again this is interest free. Further details on this to follow


August 31, 2020 -  The application deadline for the Canada Emergency Business Account (CEBA) is extended from August 31 to October 31, 2020. 


August 26, 2020 - Announcement regarding T4s and COVID - Additional reporting requirements will apply to all employers, and will help the CRA validate payments under the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Response Benefit (CERB), and the Canada Emergency Student Benefit (CESB). 
Employers are required to breakdown income earned during the periods of COVID. Read the details from the government
https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/support-employers-cra-covid-19.html

July 15, 2020 - Canada Emergency Wage Subsidy (CEWS) - The Government announced that the CEWS will be extended to the end of December 2020.


June 24, 2020 - Canada Emergency Wage Subsidy (CEWS) - The Government announced on May 15, 2020 that the CEWS would be extended by an additional 12 weeks, to August 29, 2020. The eligibility criteria will apply for the current period (period 4). Any potential changes would commence as of periods 5 (July 5 to August 1) and/or 6 (August 2 to August 29).

More information about the announced CEWS extension to August 29 will be coming soon.

May 25, 2020 - Canada Emergency Commercial Rent Assistance (CECRA) - CMHC is in charge of the program. Landlords can start their application on their webpage. It also include information for both the landlord and tenant.
https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business


April 25, 2020 - Canada Emergency Commercial Rent Assistance (CECRA) - This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19. 

The government is also providing further details on the program:
September 1, 2014 - Ontario employees who earn over $150,000 annually will begin to pay more provincial tax. On July 14th, Ontario introduced a bill which confirms that a personal income tax rate increase will apply to all of the income earned by these employees in the 2014 tax year.
Impact on Withholdings: Although the tax rate increase publicized in the Budget is 1% or 2%, because the tax increase will be in effect for only the last 4 months of 2014, employees in the above income range will notice a 3% or 6% increase in their actual Ontario tax withholdings during the September to end of December period.

April 2014 - Due to the fact that CRA shut down it's system for 5 days during April this year (because of the Heartbleed Bug), the filing deadline has been extended until Monday May 5, 2014.  The extension is for filing as well as payments.
Per CRA's website, Social Insurance Numbers (SIN) of approximately 900 taxpayers were removed from CRA systems by someone exploiting the Heartbleed vulnerability.
CRA will be sending registered letters to the affected individuals. CRA does NOT email.