New Tax Changes in 2017 (for tax year 2016)

What’s new from CRA ….

 

Individuals and families

Canada child benefit (CCB) – As of July 2016, the CCB has replaced the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS), and the universal child care benefit (UCCB).

Northern residents deductions  – The basic and additional residency amounts used to calculate the northern residency deduction have both increased to $11 per day.

Children’s arts amount  – The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $250. Both will be eliminated for 2017 and later years.

Home accessibility expenses – You can claim a maximum of $10,000 for eligible expenses you incurred for work done or goods acquired for an eligible dwelling.

Family tax cut – The family tax cut has been eliminated for 2016 and later years.

Children’s fitness tax credit  – The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $500. Both will be eliminated for 2017 and later tax years.

Eligible educator school supply tax credit  – If you were an eligible educator, you can claim up to $1,000 for eligible teaching supplies expenses.

 

Interest and investments

Tax-free savings account (TFSA) – The amount that you can contribute to your TFSA  every year has been reduced to $5,500.

Dividend tax credit (DTC) – The rate that applies to “other than eligible dividends” has changed for 2016 and later tax years.

Investment tax credit  – Eligibility for the mineral exploration tax credit has been extended for flow-through share agreements entered into before April 2017.

Labour-sponsored funds tax credit  – The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations has been restored to 15% for 2016 and later tax years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has decreased to 5% and will be eliminated for 2017 and later tax years.

Other changes

Tax on taxable income – The tax rates and income levels have changed. See Schedule 1, Federal Tax. As a result of  this change the donations and gifts tax credit calculation has changed.

Split income of a child under 18 – The tax rate has increased to 33%.

Sale of principal residence – The sale of a principal residence must now be reported, along with any principal residence designation, on Schedule 3. See Schedule 3, Capital Gains (or Losses) in 2016. Under proposed changes, the CRA will be able to accept a late designation in certain circumstances, but a penalty may apply. Go to
Reporting the sale of your principal residence for individuals (other than trusts) and select question 7.

Reassessment period – Under proposed legislation, for tax years that end after October 2, 2016, the CRA may at any time reassess your income tax return if you fail to report a sale or other disposition of real estate.

For more information, visit CRA website

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