Canada Child Benefits - Shared Custody Parents

Canada Child Benefits - Shared Custody Parents

 

On August 29, 2019, the department of Finance released a draft legislation amending the definition of shared custody parents for the purpose of the Canada child benefit and various other federal and provincial programs. Currently each parent must reside with the qualified dependant (QD) on an "equal or near equal basis". The new proposals would align the definition with the Canada Child Support Guidelines, requiring each parent to reside with the qualified dependant at least 40% of the time. This overrides recent court decisions which effectively set a 45% test. Alternatively, the benefits can be split where each parent resides with the qualified dependant on an "approximately equal basis", providing some flexibility for unusual cases. The amendment is retroactive to July 1, 2011, the inception of the shared custody rules.

 

 

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2019 Automobile Deduction Limits and Expense Benefits rates for Business

2019 Automobile Deduction Limits and Expense Benefits rates for Business

The limit on the deduction of non-taxable allowance paid by employers to employees using their personal vehicle for business purposes in 2019 were released on December 27, 2018 and will increase by 3 cents to 58 cents per kilometre for the first 5,000 kilometres driven and 52 cents for each additional kilometre. For the Yukon, the Northwest Territories and Nunavut, the tax-exempt allowance is 4 cents per kilometre higher, so 62 cents for the first 5,000 kilometres driven and 56 cents for each additional kilometre thereafter.

 

The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by the employer in 2019 will increase by 2 cents to 28 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will increase to 25 cents per Kilometre.

 

The ceiling on the capital cost of passenger vehicles for CCA purposes will remain at $30,000 (plus applicable federal and provincial sale tax). The maximum allowable interest deduction for amounts borrowed to purchase the vehicle will remain at $300 per month. The limit on deductible leasing cost will also remain unchanged at $800 (plus applicable federal and provincial sales taxes). Note that a separate restriction prorates deductible leasing costs where the value of the vehicle exceeds the capital cost ceiling.

 

 

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Principal Residence - Changes you should know

CRA has been very busy of late and their focus has landed on policies that effect principal residency followed by all taxpayers. In 2015 and earlier years, taxpayers were required to complete form 2091, which designated your home as a principal residence. The form required you to designate the years in which the home was your principal residence. The nice thing with this form was that it was required to be filed in the year if disposition (although most often this form was never filed as the capital gain was often fully offset by claiming the principal residence exemption). From an administrative perspective, CRA had waived this requirement to file if the exemption eliminated the gain.

However for the taxation years that end on or after October 3, 2016, if you sell a house that is your principal residence, you are required to report the sale and the resulting capital gain or loss on the schedule 3 of your T1 and to file the corresponding T2091 form. These forms are now mandatory regardless of whether your exemption fully offsets your capital gains.

Failure to file and disclose this as noted above will have significant implications.  Firstly, there is no limitations period where your return will be statute- barred. Hence CRA will have the ability to reassess at any point in the future. Therefore, CRA will retain their ability to re-open the tax return at any point in the future unless the information had properly been disclosed.

Secondly, the principal residence exemption itself will be allowed if the dale and the designation of principal residence are reported on your income tax return. If you realize that subsequent to the year of the sale and filing, that you failed to report the disposal of your principal residence, the CRA is not required to accept a late filing that designates the principal residence sale. Should they accept the late filing, the taxpayer is still subject to penalties which are the lesser of $8,000 or $100 for each complete month from the original filing due date.

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AgriStability

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CRA Update Info

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