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Posts Tagged ‘federal budget’

Bennett: What the federal budget means for you

Sunday, April 24, 2016 @ 08:04 AM
posted by admin

Submitted by Steve Bennett of H&R Block

With a majority government, it’s no surprise that the new Liberal government is rolling out many of the expected changes that they promised during the long election campaign. There are many changes and updates in the budget, so let’s take a look at some of the biggest.

Elimination of the Family Tax Cut

This is officially the last year of the Family Tax Cut. This income-splitting measure will have lasted for only two years and was eliminated in favour of the previously announced income tax rate reduction from 22% to 20.5% for the second federal tax bracket.

Elimination of the Children’s Fitness and Arts Credits

These credits will be phased out over the next two years. In 2016, the fitness tax credit and arts credit will be reduced by 50% to $500 and $250, respectively. In 2017, the two credits will be eliminated altogether.

Introduction of the Canada Child Benefit

One of the key planks of the Liberal platform was the restructuring of benefits for families. As promised, the government has eliminated the Universal Child Care Benefit and Canada Child Tax Benefit, replacing them with the new Canada Child Benefit.

The Canada Child Benefit will be based on family net income and will be completely non-taxable. The maximum benefit is $533.33 per month for children under six, and $450 per month for children ages six to 17.

Families with net income below $30,000 will receive the full benefit, while families who earn more will be subject to different phase-out rates based on their income and number of children. With the Canada Child Benefit, the vast majority of families should see enhanced benefits.

Teacher and Early Educator School Supply Tax Credit

This 15% refundable tax credit will allow eligible educators to claim up to $1,000 of teachers’ supplies. Examples of eligible expenses include art supplies, stationery items and materials for science experiments. Teachers will qualify if they hold a teacher’s certificate valid in the province or territory they are employed. Early childhood educators will qualify as long as they hold a certificate or diploma in early childhood education.

Elimination of the Education and Textbook Amounts

For the 2017 tax year, the federal education and textbook amounts will be eliminated, though the credit for tuition will remain in effect. Revenue gained from this credit elimination will be used to enhance the Canada Student Grant Program.

Any unused education and textbook credit carry-forward from prior years will remain available to use in 2017 and subsequent years.

Cancellation of the age increase for Old Age Security (OAS) eligibility

The previous government had implemented legislation to raise the age at which Canadians can begin receiving OAS. It was scheduled to phase-in beginning in 2023. As promised in the platform, this will be cancelled.

This article provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this bulletin can be accepted by Steve Bennett or H&R Block Canada, Inc.

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Posts Tagged ‘federal budget’

Bennett: What the federal budget means for you

Sunday, April 24, 2016 @ 08:04 AM
posted by admin

Submitted by Steve Bennett of H&R Block

With a majority government, it’s no surprise that the new Liberal government is rolling out many of the expected changes that they promised during the long election campaign. There are many changes and updates in the budget, so let’s take a look at some of the biggest.

Elimination of the Family Tax Cut

This is officially the last year of the Family Tax Cut. This income-splitting measure will have lasted for only two years and was eliminated in favour of the previously announced income tax rate reduction from 22% to 20.5% for the second federal tax bracket.

Elimination of the Children’s Fitness and Arts Credits

These credits will be phased out over the next two years. In 2016, the fitness tax credit and arts credit will be reduced by 50% to $500 and $250, respectively. In 2017, the two credits will be eliminated altogether.

Introduction of the Canada Child Benefit

One of the key planks of the Liberal platform was the restructuring of benefits for families. As promised, the government has eliminated the Universal Child Care Benefit and Canada Child Tax Benefit, replacing them with the new Canada Child Benefit.

The Canada Child Benefit will be based on family net income and will be completely non-taxable. The maximum benefit is $533.33 per month for children under six, and $450 per month for children ages six to 17.

Families with net income below $30,000 will receive the full benefit, while families who earn more will be subject to different phase-out rates based on their income and number of children. With the Canada Child Benefit, the vast majority of families should see enhanced benefits.

Teacher and Early Educator School Supply Tax Credit

This 15% refundable tax credit will allow eligible educators to claim up to $1,000 of teachers’ supplies. Examples of eligible expenses include art supplies, stationery items and materials for science experiments. Teachers will qualify if they hold a teacher’s certificate valid in the province or territory they are employed. Early childhood educators will qualify as long as they hold a certificate or diploma in early childhood education.

Elimination of the Education and Textbook Amounts

For the 2017 tax year, the federal education and textbook amounts will be eliminated, though the credit for tuition will remain in effect. Revenue gained from this credit elimination will be used to enhance the Canada Student Grant Program.

Any unused education and textbook credit carry-forward from prior years will remain available to use in 2017 and subsequent years.

Cancellation of the age increase for Old Age Security (OAS) eligibility

The previous government had implemented legislation to raise the age at which Canadians can begin receiving OAS. It was scheduled to phase-in beginning in 2023. As promised in the platform, this will be cancelled.

This article provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this bulletin can be accepted by Steve Bennett or H&R Block Canada, Inc.

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