  Tax changes in DT Max (2014) |
The following is a summary of the various new tax measures that
required modifications in DT Max and that relate to tax year
2014. Some new tax measures do not require any modifications
in DT Max.) Most of these new tax measures were introduced in the
2014 budgets. (Some of them were introduced in prior budgets, in
press releases or in information bulletins.) Also, please note
that, unless otherwise provided, these proposed new tax measures
should come into force by the time the 2014 returns are produced.
Finally, please note that we have also included changes that, while
not representing new tax measures, are changes of an administrative
nature that required modifications in DT Max.
Federal
Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut
Federal
-
New Tax Measures:
-
As announced in the 2013 federal budget, the government has
reduced the gross-up factor applicable to non-eligible dividends
from 25 per cent to 18 per cent and the corresponding dividend tax
credit from 13,33 per cent to 11,0169 per cent, applicable to
non-eligible dividends paid after 2013.
-
For the Overseas Employment Tax Credit (OETC), the factor
applied to an employee's qualifying foreign employment income in
determining the employee's OETC, which is currently 60%, will be
reduced to 40% for 2014.
-
The budget proposes to increase the maximum amount of eligible
expenses for the Adoption Expense Tax Credit to $15,000 per child
for 2014 and to index that amount according to inflation for later
tax years.
-
To highlight the important role played by volunteers
participating in search and rescue activities to ensure the safety
and security of Canadians, Budget 2014 proposes a Search and Rescue
Volunteers Tax Credit. Eligible volunteers participating in land,
air and sea search and rescue activities may request a
non-refundable 15% tax credit on an amount of $3,000. (not
implemented in the planner version)
-
Currently, an individual is eligible for an exemption of up to
$1,000 related to a payment from a government, a municipality, or
another public authority for performing the duties of an emergency
services volunteer. For 2014 and subsequent years, an individual
who claims the volunteer firefighter tax credit or the search and
rescue volunteer tax credit will not be eligible for the exemption.
(not implemented in the planner version)
-
As proposed in Budget 2013, an individual taxpayer will no
longer be allowed to claim a deduction for the expenses incurred in
respect of the use of a safety deposit box of a financial
institution. Therefore, the Deduction for Safety Deposit Boxes will
no longer be in effect for 2014 and later years.
-
To eliminate the need for an individual to apply for the GST/HST
Credit and to allow the Canada Revenue Agency to automatically
determine if an individual is eligible to receive the GST/HST
Credit. A notice of determination will be sent to each individual
who is eligible for the GST/HST Credit. In the case of eligible
couples, the GST/HST Credit will be paid to the spouse or
common-law partner whose tax return is assessed first. (not
implemented in the planner version)
-
Announced by the federal government on October 30, 2014, and
relevant for tax year 2014, the Family Tax Cut is a new federal tax
credit that will allow a spouse to, in effect, transfer up to
$50,000 of taxable income to a spouse whose income is in a lower
tax bracket. The credit will provide tax relief - capped at $2,000
- for couples with children under the age of 18, starting in the
2014 taxation year.
-
The Government announced its intention to double the Children's
Fitness Tax Credit and make it refundable. The maximum amount of
expenses that may be claimed under the credit will be doubled from
its current limit to $1,000 for the 2014 tax year and subsequent
tax years, and the credit will be made refundable effective for the
2015 and subsequent tax years.
Newfoundland and Labrador
-
New Tax Measures:
-
In order to align with the federal government, the rate for the
Newfoundland and Labrador (NL) Dividend Tax Credit has changed. The
NL government has reduced the rate for the tax credit on ordinary
dividends from 5% to 4.1% and the rate for the tax credit on
eligible dividends from 11% to 5.4%. These rates will be in effect
for the dividends received after July 1st, 2014. The NL dividend
tax credit workchart has been updated accordingly in DT Max.
-
The Venture Capital Tax Credit is a new non-refundable tax
credit. Effective for 2014 and subsequent tax years, the tax credit
is 30% of the qualifying investment. Lifetime maximum is $75,000.
Unused credit can be carried back three years and carried forward
seven years. (not implemented in the planner version)
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
-
New Tax Measures:
-
The Quebec provincial budget has planned a reduction of the rate
for the ordinary dividend tax credit from 8% to 7.05%.
-
Introduction of a refundable tax credit for seniors'
activities
The budget proposes a new refundable 20% tax credit for the
eligible expenses paid in the year, up to a maximum amount of $200,
for individuals other than excluded individuals, who are 70 years
of age at the end of December 31 of the year or on the date of his
or her death.
An excluded individual for a particular taxation year will be an
individual:
- whose income for the year exceeds $40,000 (indexed each year);
or
- who is exempt from tax.
An expense includes any amount paid by the individual in the
year regarding the cost of the individual's registration or
membership in a recognized program of activities. To that end, this
will include the cost of the program with respect to the program's
administration, instruction, rental of required facilities, as well
as uniforms and equipment. However, the cost must not include the
cost of accommodation, travel, food or beverages. Consequently, in
order for the aforementioned refundable credit to apply, the
recognized programs of activities must meet certain conditions that
are stated in the budget.
This measure will apply to the amounts paid as of June 5, 2014,
for a program that will start on this date or after. (not
implemented in the planner version)
-
Amendment to ensure the fairness of the mechanism for splitting
retirement income between spouses
Since 2007, the tax system has included an income splitting
mechanism that enables couples receiving certain retirement income
to reduce their overall tax burden.
The tax legislation will be amended to allow the income
splitting mechanism to be applicable only for the person that
reached 65 before the end of this person's tax year. (not
implemented in the planner version)
-
Tax credit for the acquisition of shares of Capital régional et
coopératif Desjardins
The maximum amount an individual may deduct in calculating his
tax otherwise payable for a given taxation year, for shares
acquired during a capital-raising period beginning in such year,
will decline from $2,500 to $2,250.
-
For 2014, the QPP contribution rate has increased from 10.20% à
10.35%. This rate corresponds to a contribution rate of 5.175% for
the employee and 5.175% for the employer.
-
Harmonization with certain measures of the federal budget of
February 11, 2014
Quebec's tax legislation and regulations will be amended in
order to implement a measure in respect to the introduction of a
tax credit for volunteers participating in search and rescue
activities, it being understood that the tax credit conversion rate
will be equal to the rate applicable to the first taxable income
bracket of the personal income tax table. (not implemented in
the planner version)
-
Introduction of the LogiRénov tax credit for home renovation
An individual residing in Quebec at the end of December 31,
2014, may be entitled to a refundable tax credit for carrying out
recognized home renovation work regarding a given eligible dwelling
which he or she owns, of an amount that corresponds to 20% of the
portion of an individual's eligible expenses for the year that
exceeds $3,000, up to a maximum tax credit of $2,500 per eligible
dwelling. This credit is claimed on line 462 under code 27 when
completing Form TP-1029.LR.
Ontario
-
New Tax Measures:
-
Ontario Personal Income Tax Rate Changes
The government proposes to:
- Lower the taxable income threshold for the 13.16% tax rate
from $514,090 to $220,000
- Add a new tax rate of 12.16% on taxable income between
$150,000 and $220,000, and
- Not adjust the new income thresholds for inflation each
year.
-
To mitigate the impact of the federal changes announced in the
2013 federal budget and improve the fairness of the taxation of
dividends, the Province proposed measures in the "2013 Ontario
Economic Outlook and Fiscal Review" that would change the dividend
tax credit rates and the surtax calculation, starting in 2014. The
government proposes to:
- Apply the dividend tax credit after the surtax. (not
implemented in the planner version)
- Increase the eligible dividend tax credit rate from 6.4% to
10%.
As a result of these changes, for 2014 and later years, the top
marginal rate on non-eligible dividends is 40.13% and the rate on
eligible dividends is 33.82%.
-
Community Food Program Donation Tax Credit for Farmers:
The Local Food Act, 2013, which received Royal Assent on
November 6, 2013, introduced a new non-refundable income tax credit
for farmers who donate agricultural products to community food
programs, including food banks. The credit is worth 25% of the fair
market value of the agricultural products donated and can be
claimed for donations made as from January 1, 2014. The government
will bring forward regulations to implement the credit. (not
implemented in the planner version)
Manitoba
-
New Tax Measures:
-
In order to align with the federal government, the rate for the
Manitoba (MB) ordinary dividend tax credit has changed. The MB
government has reduced the rate for the tax credit on ordinary
dividends from 1.75% to 0.83%.
-
You can claim a non-refundable tax credit for eligible
investments you made in Manitoba community enterprise development
projects from January 1 to June 11, 2014. For eligible investments
you made from June 12 to December 31, 2014, in Manitoba community
enterprise development projects, you can claim a refundable tax
credit. (not implemented in the planner version)
-
A new Manitoba employee share purchase tax credit has been
introduced for tax year 2014.
Saskatchewan
Alberta
British Columbia
-
New Tax Measures:
-
Personal income tax rates
The budget does not include any changes to personal income tax
rates or the temporary two-year increase in the personal income tax
rate introduced in Budget 2013, applicable to individuals earning
more than $150,000. In Budget 2013, the tax rate was increased from
14.7% to 16.8% for 2014 and 2015 only, before reverting back to
14.7% in 2016.
-
In order to align with the federal government, the rate for the
British Columbia (BC) ordinary dividend tax credit has changed. The
BC government has reduced the rate for the tax credit on ordinary
dividends from 3.4% to 2.59%.
-
The BC mining flow-through share tax credit will be extended to
the end of 2014.
Yukon
Northwest Territories
Nunavut
January 07, 2015
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