COVID Government Programs - March 23

We've put together a PDF that represents our best knowledge that is available as of March 23, 2020. Review the outline below to see what's included. Please note the situation is changing every day and refer to the links referenced below.

 

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Federal Government Support

For additional information visit the following websites:

Alberta Government Support

Ontario Government Support

Ontario is expected to announce its support on March 25, 2020.

New Brunswick Support

Nothing has been announced so far but things are changing every day.

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Canada Training Credit - Budget 2019

Budget 2019 proposed a new Canada Training Credit (CTC), a refundable tax credit which will reimburse up to half of eligible tuition and fees associated with work-related training. Eligible individuals will accumulate $250 each year in a notional account for this purpose. The account balance will be included on Notices of Assessment and made available through My Account and Represent a Client.

The credit available for a taxation year will equal the lessor of:

  1. Half of the eligible tuition and fees paid in respect of the taxation year: and
  2. The individual's normal account balance accumulated in respect of previous years.

Tuition and other fees eligible for the CTC will generally be the same as under the existing rules for tuition tax credit. However, foreign educational institutions will not generate eligible tuition. Amounts refunded through the CTC will not be eligible for the tuition tax credit. A claim for the credit will require the individual to be a resident in Canada throughout the year of the claim.

In order to accumulate the $250 amount in respect of a year, an individual must:

  1. File a tax return;
  2. Be at least 25 years old and up to 64 years old at the end of the year;
  3. Be resident in Canada throughout the year;
  4. Have earnings (primarily income from employment or self-employment, but also including parental employment insurance benefits and tax exempt earnings of status Indians and emergency service volunteers) of $10,000 or more in the year; and
  5. Have net income that does not exceed the third tax bracket ($147,667 in 2019).

Individuals will be able to accumulate up to a maximum amount of $5,000 over a lifetime. Any unused balance will expire at the end of the year in which the individual turns 65.

The first $250 will be added to the notional account for 2019, so the credit will first be available for expense the 2020 taxation year.

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Earnings Exemption - Budget 2019

The GIS earnings exemption currently allows low-income seniors and their spouses to each earn up to $3,500 per year in employment income without triggering a reduction in GIS benefits. Budget 2019 proposed to enhance this exemption beginning with July 2020 benefit payments.

The enhancement would extend eligibility for the earnings exemption to self-employment income. Also, it would increase the exemption to the first $5,000 per year of employment or self employment income for each of the GIS recipient and their spouse, from the present amount of $3,500. In addition, it would introduce a partial exemption of 50% for the next $10,000 of employment or self employment income,

In other words, the first $5,000 of employment or self employment income will be fully excluded from income for the GIS purposes, and only half of the next $10,000 will be included.

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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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