Every year there are changes to the Canadian tax season. Do you know the 2017 updates? This year there are changes for families, interest, investments, and tax law so buckle up and we’ll review everything that you should be aware of for the 2017 tax season.
What’s New for Families?
If you’re responsible for your family’s taxes, you’ll want to know about the following benefits, deductions, and credits for the 2016 income tax year. What, more to think about? With kids and a million little things on the go, we’d like to remind you that, when you file your taxes with TAXplan, our TAXpros will take care of the details to ensure that your family doesn’t miss any applicable tax credits or deductions.
The Canada Child Benefit (CCB)
The Canada Child Tax Benefit (CCTB) came into effect on July 20th, 2016. It’s replaced the Universal child care benefit (UCCB) and National Child Benefit Supplement (NCBS), and is designed to help eligible families with the cost of raising kids under the age of 18.
The CCB is a tax-free monthly payment that’s calculated using the adjusted family net income from your previous year’s income tax return. You’re required to file annually to receive the benefit. If you haven’t filed your 2015 return, you may miss out on these payments if you’re eligible.
Children’s Fitness and Arts Tax Credits
Unfortunately, the children’s fitness tax credit has been reduced to $500 from $1,000, and the children’s arts tax credit has been reduced to $250 from $500. Sad but true, however the additional amount of $500 available to children eligible for the disability tax credit isn’t changing.
Important note: these amounts are refundable in 2016, however in 2017 and subsequent tax years, both credits have been removed. If this is confusing, don’t hesitate to connect with a TAXpro who will make sure that everything is optimized for your family.
Child Care Expenses
The maximum limit for child care expenses hasn’t changed for 2016. Here’s a brief overview of the deduction limits based on your child’s age at the end of the applicable tax year:
- Children 6 years and under, you can deduct $8,000 annually;
- Children between the ages of 7 and 15, you can deduct $5,000 annually; and
- Children eligible for the disability tax credit have an annual limit of $11,000.
Family Tax Cut
The family tax cut, also known as the income splitting tax credit, has been eliminated for 2016 and subsequent tax years. This doesn’t apply to you if you receive a pension; you may still be able to reduce your taxes on eligible pension income by splitting with your spouse or common-law partner.
News for Interest and Investments
Take note of the following changes for investments and interest for your 2016 income tax year. Remember that when you file with TAXplan, our TAXpros will ensure that all of deductions and credits are accounted for and that your tax return is optimized for the best possible results.
Tax-Free Savings Account (TFSA)
It’s important to note that the annual TFSA dollar limit has been reduced in 2016 to $5,500.
The minimum withdrawal amounts for the following funds and plans have not changed for 2016:
- registered retirement income fund (RRIF)
- registered pension plan (RPP)
- pooled registered pension plan (PRPP)
For more information see Guide T4040, RRSPs and Other Registered Plans for Retirement.
Interest Paid on your Student Loans
Still paying off student loans? Here’s some good news. If you paid any interest on your student loan in 2016, you may be able to claim it. Follow this link to learn more or use the TAXplan app (free for students!*) and a TAXpro will take care of it for you.
Other News and Updates
Home Accessibility Tax Credit (HATC)
If you and your home qualify, you might be able to claim a non-refundable tax credit in 2016 for certain expenses paid to renovate your home. Review the home accessibility expenses information on the CRA website for all the details.
New Reporting Requirement on the Sale of your Principal Residence
In 2016 and going forward, you’ll need to report basic information regarding the sale of your principal residence. This information includes when you originally purchased the home, how much it was sold for, and the home address. You’re not required to pay capital gains on the sale of your principal residence if you didn’t use any part the home to earn money. Learn more about this important reporting requirement here.
Tax Credit for Educator School Supplies
Are you a teacher? If you’re an eligible educator, you may be able to receive a tax credit on qualifying teaching supplies bought throughout the tax year. It’s a step in the right direction. The 15% refundable tax credit is calculated on up to $1,000 in expenses. This tax credit is applicable to teachers and early childhood educators. Review the CRA publication to learn if you’re eligible.
Never Miss a Tax Credit
With so many changes to this year’s tax guidelines, we highly recommend that you entrust your 2016 online tax return to a professional. Consider TAXplan. We make your life easier by allowing you to submit your tax information in a convenient app for it to be processed, optimized, and filed by a professional. Click here to start now.