Some quick points to consider…

• The government has proposed to reduce the tax rate on the lowest bracket to 14% (from 15%) effective July 1, 2025, resulting in reduced tax for many individuals. This change would be implemented as a 14.5% rate for 2025 and 14% for 2026 onwards. However, the rate for personal tax credits would likewise be reduced, resulting in lower tax credits. Employers were expected to implement this change on a best effort basis for the first pay of July 2025.
• Applications for the new Canada disability benefit are now open and can be made through an electronic application portal, by phone or in person at a Service Canada centre. This is an income-tested benefit intended for working-age people who are approved for the disability tax credit.
• CRA launched a new self-evaluation and learning tool link (SELT) to help taxpayers assess eligibility for penalties and interest relief due to financial hardship, circumstances beyond the taxpayer’s control, actions of CRA or other reasons.
• The government has reiterated that the Canada carbon rebate for small businesses should be tax-free, retroactive to the start of the program (available in AB, SK, MB, ON, NB, NS, PEI and NL). Draft legislation has been released. Once it receives Royal Assent, CRA will be authorized to process amended T2 corporation income tax returns for businesses that previously included the rebate in their taxable income.

Some quick points to consider…

• CRA has been significantly delayed in posting several tax slips to its online portal this year. Adjustments to filed personal tax returns may be needed to report income that was missed.
• Individuals reporting capital gains have until June 2, 2025 to file their income tax returns and make associated payments without being subject to penalties or interest.
• An individual may claim a charitable donation tax credit for their spouse or common-law partner’s gift made within the past five years, even if the donation predates their spousal relationship.
• A parking space may be a component of a condominium unit for principal residence exemption purposes, even if it was purchased separately from the unit.
• On April 1, 2025, the HST rate in Nova Scotia dropped to 14% (from 15%). Ensure to update the HST charged for sales in or to this jurisdiction.

December 31, 2024 is fast approaching… see below for a list of tax planning considerations. Please contact us for further details or to discuss whether these may apply to your tax situation.

1) NEW! As of June 25, 2024, 2/3s of capital gains in excess of $250,000 per year are proposed to be taxable. Capital gains of $250,000 or less will effectively continue to be included at a 50% rate due to a new deduction.

Tax Tidbits

Some quick points to consider…

• All GST/HST returns (except for those of charities and selected financial institutions) must now be filed electronically using methods such as NETFILE, internet file transfer through a third-party accounting software, CRA’s My Business Account, electronic data interchange (EDI) through a financial institution or TELEFILE through a toll-free phone number. Registrants who paper file improperly will be charged a penalty.
• Starting in 2024, digital platform operators (such as Airbnb and Etsy) are required to provide information to CRA on the sellers who use their platform, including the seller’s identification and details of their financial transactions.
• Over 2.1 million people have registered for the Canadian Dental Care Plan (CDCP). Almost 12,000 oral health providers have formally registered to provide services to patients under the plan. Providers can now provide services without formally registering, provided they bill Sun Life directly for eligible services.

Some quick points to consider…

• All eligible Canadian resident seniors (over age 65), children under 18 and individuals eligible for the disability tax credit can now apply for the Canadian Dental Care Plan. Other eligible individuals will be invited to participate in 2025. To qualify, the applicant must not have access to dental insurance and the applicant’s family income must be below $90,000.
• In July 2024, CRA began issuing legal warnings and taking legal measures to collect outstanding personal COVID-19 benefit program debts. Individuals who have not responded or cooperated are being contacted if CRA has determined that they have the financial capacity to pay the outstanding amount. CRA encouraged individuals who cannot pay the full amount immediately to contact them and develop a payment arrangement.
• While the increase to the capital gains inclusion rate from 50% to 2/3 for corporations and most trusts and from 50% to 2/3 on the portion of capital gains realized in the year that exceeds $250,000 for individuals has not been enacted into law, the government has confirmed that the change would be effective June 25, 2024.

The 2024 Federal Budget proposed to increase the capital gains inclusion rate from 50% to 2/3 of the actual gain, effective for capital gains realized on or after June 25, 2024, for all taxpayers (including corporations and trusts) other than individuals. Individuals would be able to continue to access the 50% rate on the first $250,000 of capital gains (net of gains offset by capital losses, the lifetime capital gains exemption, and the proposed employee ownership trust exemption and Canadian entrepreneurs’ incentive) realized annually. An individual’s capital gains over the annual $250,000 limit, and all capital gains of corporations and trusts would be included at the 2/3 rate. Full details of the proposal have not yet been released (as of May 13, 2024).

A. Personal Measures

Capital Gains Inclusion Rate

Currently, one half of capital gains are included in a taxpayer’s income. Budget 2024 proposed to increase this inclusion rate to two thirds of the actual gain, effective for capital gains realized on or after June 25, 2024. Similarly, the deduction available for some employee stock option benefits will be reduced from one half to one third of the benefit. This adjustment to the inclusion rate will also apply to capital losses applied to offset capital gains.

A. Information – All Clients Must Provide

Please check all boxes that apply and provide supporting information.

1. All information slips, such as: T3, T4, T4A, T4A(OAS), T4A(P), T4E, T4PS, T4RIF, T4RSP, T5, T10, T2200, T2202, T101, T1163, T1164, TL11A, B, C and D, T5003, T5007, T5008, T5013, T5018 (subcontractors) and corresponding provincial slips.
2. Details of income or receipts for which no T-slips have been received, such as:

New rules aimed at providing more transparency on beneficial ownership of assets now require that more trusts (and estates) file tax returns. These changes will catch many individuals and businesses that may not be aware of their trust-like relationships, exposing them to potential penalties and other consequences for non-compliance. The rules become effective in 2023, with a filing deadline of April 2, 2024.

Tax Tidbits

Some quick points to consider…

• The 2024 RRSP contribution limit is $31,560, requiring earned income in 2023 of at least $175,333. The 2025 limit will be $32,490 (requiring earned income in 2024 of at least $180,500).
• The annual TFSA contribution limit for 2024 is $7,000.
• The annual interest rate charged by CRA on late tax and installment payments has increased to 10% for the first quarter of 2024. Additional penalties may apply on underpaid installment payments.
• Over 6,100 audits on COVID-19 wage subsidies have been completed or are in progress. In terms of dollar figures, $8.9 billion in claims have been audited, and $7.5 billion in claims are currently being audited. Of the audited claims, $458 million of claims have been denied.