PLEASE BE AWARE OF THE FOLLOWING TAX CHANGES FOR 2022
New Labour Mobility Deduction – a deduction of up to $4,000 per year to recognize travel and relocation expenses of constructionindustry employees. Please provide eligible transportation, meal and lodging expenses related to work relocation.Medical Expense Tax Credit Surrogacy and other costs – costs relating to surrogacy and sperm, ova or embryo donations are now eligible for a tax credit. Please provide receipts.Disability Tax Credit Type 1 Diabetes, Life-Sustaining Therapy and Mental Functions – those with Type 1 diabetes will now meet the disability tax credit requirements. Criteria has also been expanded for mental functions, impairment and life-sustaining therapy. Please check with your doctor if your specific situation would qualify.Increases to Housing Related Tax Credits – the First Time Home Buyer’s tax credit amount has doubled to provide tax relief of $1,500. The Home Accessibility Tax Credit has also doubled, up to an annual expense of $20,000.New Underused Housing Tax – this imposes a 1% tax on the value of non-resident, non-Canadian owned residential real estate considered to be vacant or underused. Individuals who are Canadian citizens or permanent residents, who own residential property as a trustee of a trust, or as a partner of a partnership, will also need to file a UHT return for each property.New Critical Mineral Exploration Tax Credit – a tax credit for specified mineral exploration expenses utilized in various zero-emissiontechnologies and renounced to flow-through share investors is available. This applies to expenditures renounced under share agreements entered into after April 7, 2022 – March 31, 2027.Immediate CCA Expensing of Capital Assets – capital assets acquired and put into use by individuals and certain business partnerships are eligible for immediate 100% expensing. Please discuss this with your accountant.New Small Business Air Quality Improvement Tax Credit – a refundable credit of 25% on eligible air quality improvement expenses to make ventilation and air filtration systems safer and healthier. Please provide invoices of eligible expenses.GST on Assignment Sales – assignment sales of newly constructed or substantially renovated residential housing are taxable for GST purposes, effective for any assignment after May 7, 2022.New Canada Dental Benefit – an up-front, tax-free payment to cover dental expenses for children under the age of 12 without dental coverage. Available to families with an adjusted family net income of under $90,000. Applications for this benefit can be>made on CRA’s My Account.
THE FOLLOWING ARE TAX CHANGES EFFECTIVE JAN 1/23
Tax-Free First Home Savings Account – introduced to help first-time buyers save up to $40,000 for their first home purchase.Contributions are deductible (like an RRSP) and income earned on the FHSA is non-taxable (like a TFSA). Talk to your bank about setting up your savings account.Residential Property Flipping Rule – gains arising from disposition of residential property (including rentals) owned for less than 12 months are business income.Quick Assignment Sales – profits from an assignment sale would be business income, if the rights to purchase the property were assigned less than 12 months after their acquisition.New Multigenerational Home Renovation Tax Credit – tax relief on up to $50,000 of eligible expenses to construct a secondary suite for a senior, or person with a disability, to live with a relative.Canada Workers Benefit (CWB) – individuals who received this benefit in the previous year will be automatically entitled to the CWB in the current year through quarterly advance payments.Flow-through Shares for Oil, Gas and Coal – such expenditures are not permitted to be renounced to share purchasers under flow-through share agreements entered into after March 31, 2023.New Canada Housing Benefit Top-up Payment – one-time $500 tax-free payment to low-income renters (who filed a 2021 tax return with adjusted net income under $35,000 for families or $20,000 for individuals). Applications for this benefit can be found online at CRA’s My Account.