2023 Tax Guide
We are here to help Canadians. That’s why as income tax season approaches, with family budgets tighter than ever and Canadians falling further and further behind, it’s imperative that you receive all the benefits you qualify for. Take a look through this Tax Guide and find some of the tax savings you may claim. Many were created by the previous Conservative government.
Please feel free to contact my office with any questions you may have.
Questions about your taxes?
Contact the Canada Revenue Agency at 1.800.267.6999 or
online at canada.ca/en/revenue-agency
Deadlines:
The due date for filing an income tax and benefit return and paying any related tax balance due is April 30th, 2023.
If you are self-employed, you have until June 15th to file a return. However, to avoid late penalties, the CRA encourages you to file by April 30th.
The Underused Housing Tax (UHT) is due April 30th. For more information, click here.
To avoid a disruption in your benefits, it is important to file your taxes on time!
New Tax Changes
Labour Mobility Expense Deduction
The labour mobility deduction would provide tax recognition of up to $4,000 per year in travel and temporary relocation expenses to eligible tradespersons and indentured apprentices. This measure is set to apply to the 2022 tax year and any subsequent taxation years.
New Tax-Free First Home Savings Account
Starting in 2023, the Tax-Free First Home Savings Account will offer prospective first-time home buyers the ability to save $40,000 tax-free. Like registered retirement savings plans (RRSP), contributions to an FHSA would be tax deductible. Like tax-free savings accounts (TFSA), income and gains inside an FHSA as well as withdrawals would be tax-free. You are allowed to contribute a total of $8,000 annually, up to a maximum account value of $40,000 total.
Employment Insurance (EI) program
As of January 1, 2023, the maximum yearly insurable earnings amount is $61,500. This means that you can receive a maximum amount of $650 per week .
Increase to the First-Time Home Buyers’ Tax Credit
There is currently a non-refundable tax credit available to first-time home buyers of $5,000, which provides tax relief at 15% or $750. The changes will double this credit to $10,000, which would provide up to $1,500 in tax relief. This proposal will apply on the purchase of a qualifying home made on or after January 1, 2022.
Home Accessibility Tax Credit Increase
For the 2022 and subsequent taxation years, the Budget proposes to increase the annual expense limit of the HATC to $20,000, which would provide a tax credit of up to $3,000.
New Multigenerational Home Renovation Tax Credit
Many older adults would like to stay in their own homes and live as independently as possible. For some families, a home may be renovated to create a “granny suite,” or an area within the home of adult children where an elderly parent can live. This is one type of situation where the Multigenerational Home Renovation Tax Credit (MHRTC) could help.
The MHRTC will be a refundable credit calculated as 15% of eligible expenses for a qualifying renovation to an upper limit of $50,000. Eligible expenses must be paid after December 31, 2022, for services performed or goods acquired after that date. This credit would apply for the 2023 and subsequent taxation years, for work performed and paid for and/or goods acquired on or after January 1, 2023.
New Rule to Tax the “Flipping” of Residential Property
Today, when a home qualifies as a principal residence and you sell it for a profit, capital gains realized on its disposition can be realized tax-free by claiming the principal residence exemption (PRE).
Under the new rules coming into effect in January 2023, anyone who sells a property which they owned for less than 12 months (specifically, 365 consecutive days) will be considered to have “flipped” the house and any profits from the sale will be taxed as business income.
Savings for All Canadians
Goods and Services Tax (GST) Credit
Four times a year, this tax-free payment helps individuals and families with modest incomes offset all or part of the GST they pay.
If you have a spouse or common-law partner, only one of you can receive this credit. When you file your tax return, CRA will determine your eligibility and will advise those who are eligible to receive the credit.
Conservatives also supported the temporary doubling of the GST credit for six months. The one-time payment was issued starting November 2022. Individuals and families must meet the eligibility criteria for the 2021 base year to qualify for the one-time payment.
Medical Expense Deductions
This credit applies to a number of eligible expenses – from home care services to laser eye surgery, to orthopedics. The previous Conservative government expanded the deduction itself, as well as the list of expenses, to include costs associated with certain types of service animals (e.g. diabetes-alert dogs). The amount you can claim is the total of your expenses, minus approximately $2,479 or 3% of the claimant’s income (whichever is less). There is no limit on the number of eligible expenses a taxpayer can claim for himself or herself, a spouse or common-law partner, or a child under 18.
Climate Action Incentive
Canadians who live in a province where the Liberal Carbon Tax applies – Alberta, Saskatchewan, Manitoba and Ontario – can claim the climate action incentive with their income tax return. The amount you receive depends on your province of residence and your personal living situation, and it probably won’t cover all the costs of the carbon tax. Residents of Alberta, Manitoba, Ontario, and Saskatchewan will receive four equal quarterly payments (April 2023, July 2023, October 2023, and January 2024). Individuals and families may also qualify for a 10% supplement if you are a resident of a small or rural community.
Canada Training Credit
The Canada Training Credit (CTC) is available for eligible tuition and other fees paid for courses taken in 2020 and subsequent tax years. Beginning with the 2019 tax year, an eligible individual can accumulate $250 each year toward their CTC limit, up to a maximum of $5,000 in a lifetime, which can be accessed the following year to help cover up to half of eligible tuition and fees associated with training. Note that it is only available for individuals between the ages of 26 and 65 who are residents of Canada, with income between $10,000 and the top of the third tax bracket, and for eligible courses. Contact CRA to check eligibility.
Savings for Families
Child Care Expense Deductions
You can claim payments you have made to someone who has looked after your child while you either earned an income from employment, operated a business alone or as an active partner, attended school or conducted research.
The previous Conservative government increased the dollar limits that parents can claim up to $8,000 per child who is under the age of seven, up to $5,000 for each child aged 7 to 16 (and for infirm children over the age of 16), and $11,000 for any children who are eligible for the Disability Tax Credit.
Canada Caregiver Credit
You can claim $2,350 on your 2022 tax return under the Canada Caregiver Credit if you support a spouse, a common-law partner or a dependent with a physical or mental impairment.
If you are eligible for the Canada caregiver amount for your spouse or common-law partner, or an eligible dependent 18 years of age or older, and their net income is less than $25,195, you may be able to claim an additional amount up to a maximum of $7,525
Child Disability Benefit
To recognize the additional costs that can add up when caring for a child with a severe disability, families can continue to claim the Child Disability Benefit. It is an amount of up to $2,985 per eligible child.
Registered Disability Savings Plan
The previous Conservative government introduced the Registered Disability Savings Plan (RDSP) to ensure long-term financial security for Canadians and families who are dealing with severe disabilities. Over the years, we have also made a number of enhancements. In particular, the Plan now ensures that long-term financial security is provided to children whose parents are no longer able to provide support.
Adoption Expense Tax Credit
This credit is a 15% non-refundable tax credit that allows adoptive parents to claim eligible adoption expenses relating to the completed adoption of a child under the age of 18. The previous Conservative government created this initiative and increased the maximum amount of eligible expenses up to $15,000 per child, indexed to inflation. For the 2022 tax year, the maximum is $17,131.
Savings for Seniors
Home Accessibility Tax Credit
While in Government, Conservatives introduced the Home Accessibility Tax Credit. Seniors and persons with disabilities who are eligible for the Disability Tax Credit can qualify for tax relief of 15% on up to $20,000 in eligible expenses. To be eligible, expenses must be incurred in relation to a renovation allowing for better mobility and functionality or reducing the risk of harm.
Doubling the Pension Income Amount
Years ago, a non-refundable pension income credit was introduced to apply to the first $1,000 of eligible pension income. A lot has changed since then, which is why the previous Conservative government increased the maximum amount of eligible pension income that can be claimed to $2,000. This results in even more savings that will make a real difference for pensioners.
Increasing the Age Amount
While in government, Conservatives increased the Age Amount by $2,000 to help low and middle-income seniors keep more of their hard-earned money to meet their needs. Based on these increases and adjustments for inflation, the Age Amount allows seniors to claim up to $7,898 on their 2022 tax return, depending on the individual’s net income.
Pension Income-Splitting
The previous Conservative government introduced pension income-splitting to help ease the tax burden and deliver fairness for Canadian pensioners.
Generally, each individual Canadian pays taxes on their full income earned. Pension income-splitting allows any Canadian resident who receives qualifying pension income to allocate to their spouse (or common-law partner), with whom they reside, up to one-half of that income. By doing so, a pensioner and their family can dramatically reduce their tax load.
Increasing the Age Limit for Converting RRSPs to RRIFs
Registered Retirement Savings Plans (RRSPs) provide one of the best opportunities for Canadians to save for the future. Since RRSP contributions are not taxable below your RRSP deduction limit, they are an ideal way to plan for retirement. However, some Canadians have been restricted by the way RRSPs are structured. Even though they chose to work past 69 years of age, it was a requirement to convert their RRSP into a Registered Retirement Income Fund (RRIF) and begin making withdrawals.
The previous Conservative government increased the age limit for converting RRSPs to RRIFs from 69 to 71. Now, more Canadians have the freedom to choose when they convert their RRSPs.
Savings for Working Canadians
The previous Conservative government increased this exemption to $800,000. (As it is indexed for inflation, the lifetime capital gains exemption is $913,630 for the 2022 tax year). Additionally, Conservatives also increased the limit specifically for farm and fishing businesses to $1 million. Conservative Bill C-208, passed in the last Parliament, has made it easier for family-owned businesses and farms to be passed down to children or grandchildren.
Eligible Educator School Supply Tax Credit
Eligible educators can claim a 25% refundable tax credit on up to $1,000 of supply purchases per year. Some examples include flashcards, art supplies, writing materials, books for the classroom and more.
Volunteer Firefighters’ Tax Credit
This is a 15% non-refundable tax credit based on an amount of $3,000 for volunteer firefighters who perform at least 200 hours of service per year. Delivered by the previous Conservative government, the option to claim the exempt amount of up to $1,000 for honoraria will remain in lieu of the credit, if desired.
Search and Rescue Volunteer Tax Credit
This is a 15% non-refundable tax credit based on an amount of $3,000 to acknowledge the valuable contributions of ground, air and marine search and rescue volunteers, who perform at least 200 hours of service per year. Delivered by the previous Conservative government, the option to claim the exempt amount of up to $1,000 for honoraria will remain in lieu of the credit, if desired.
Tradespersons’ Tools Deduction
This tax deduction on tools, delivered by the previous Conservative government, helps those tradespeople who often must pay for their work expenses up front out of their own pockets.
Meal Expenses of Long-Haul Truck Drivers
The Canadian tax system generally limits business-related meals, entertainment, and other expenses to be deductible only up to 50%. The previous Conservative government raised the deductible portion of meal expenses for long-haul truck drivers to 80%.
Lowering of the Small Business Tax Rate
In 2015, the previous Conservative government introduced a tax measure to lower the small business tax rate from 10.5% to 9% by 2019. A reduced small business tax rate of 9% is now in effect.
Canada Workers Benefit
This benefit, introduced by the previous Conservative government in 2007, is a refundable tax credit that supplements the earnings of low-income workers to ensure they aren’t penalized for getting a job. The Liberal government has since renamed and expanded the benefit.
For those low-income working Canadians with a disability who face even larger barriers to workforce participation, it provides an additional supplement.
Canada Employment Amount
The Canada Employment Amount provides most employees of the public and private sector (excluding the self-employed) with help to offset the cost of work-related expenses such as home computers, uniforms and supplies. If you qualify for this amount, you can claim up to $1,287 on your 2022 tax return.
Apprenticeship Job Creation Tax Credit
Employers who employ an eligible apprentice in a skilled trade in the first two years of an apprenticeship contract (registered with the federal, provincial, or territorial government) can be eligible to receive a non-refundable tax credit equivalent to 10% of the salaries and wages paid to the apprentice. Introduced by the previous Conservative government, this can translate into tax savings for an employer of up to $2,000 per eligible apprentice.
Lower Taxes for Local Business Owners, Farmers and Fishermen
When an owner of a family farm, local business, or fishing enterprise passes from one generation to the next, the properties – or shares – are subject to a Capital Gains Tax. Previously, the first $500,000 of the value was tax-free.
How to File Your Taxes
Many reading this will file taxes with an accountant or tax professional. This is a great way to ensure your taxes are done right.
In addition to hiring a tax professional, the CRA provides four additional methods to file your taxes (including low cost or free services).
Using Software
You will find a list of certified desktop, online, and mobile software products at Canada.ca/netfile-software. Some of these software products are free.
Filing By Paper
Please note: Due to COVID-19, paper filing may delay your assessment.
If you filed your taxes on paper last year, the CRA will automatically mail you the 2021 income tax package.
You can view, download and order forms and publications at Canada.ca/taxes-general-package. You can also call the CRA at 1.855.330.3305 to order forms and publications.
By Phone
The CRA offers an automated phone service called File my Return. This free service lets you complete and file your return by phone. The service is available to eligible Canadians who have low or fixed incomes and whose tax situation doesn’t change from year to year. If you are eligible for File my Return, the CRA will mail an invitation letter to you by mid-February.
Using the Community Volunteer Income Tax Program
Through the CRA’s Community Volunteer Income Tax Program, community organizations host free tax clinics for Canadians with a modest income and simple tax situation. Volunteers may be able to complete and file returns for free, by videoconference, by phone, or through a document drop-off arrangement. To find a tax clinic near you, go to Canada.ca/taxes-help.
Tax Clinics in Battle River--Crowfoot
ASA Tax Clinic *By Appointment Only
Stettler Volunteer Centre
4804-50TH STREET STETTLER AB T0C2L0
Viking/Beaver Family and Community Support Services
SOS Program Year Round Tax Filing
Kneehill County - FCSS
PO BOX 400 THREE HILLS AB T0M2A0
Big Country Community Adult Learning Association
Tofield/Beaver County West FCSS
5407 50 STREET TOFIELD AB T0B4J0
tboastradley@tofieldalberta.ca
Wainwright & District Family & Community Services