HIGHLIGHTS OF RECENT CHANGES
THE FOLLOWING PERSONAL MEASURES ARE EFFECTIVE FOR 2011:
NEW PERSONAL MEASURES
The Children's Arts Tax Credit
Parents enrolling a child under 16 at the beginning of an eligible program of artistic, cultural, recreational or developmental activities and paid fees for such enrolment may claim a new non-refundable tax credit calculated at 15% of up to $500 of those fees.
An additional amount of $500 is available for a child eligible for the disability tax credit if the child is under 18 at the beginning o the year.
The Volunteer Firefighters Tax credit
Volunteer firefighters performing their volunteer firefighting services for at least 200 hours during the year may claim a new non-refundable tax credit calculated at 15% of $3,000. The credit will replace the exemption of up to $1,000 received from a government, municipality or public authority for those services and that volunteer firefighter will not be able to claim anymore.
The Medical Expense Tax Credit
The $10,000 limit applicable to medical expenses that a taxpayer may consider to calculate the Medical expense tax credit in respect of a dependent relative ( child over 18, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece, or nephew) is eliminated.
Examination Fees
Ancillary fees and charges ( cost of examination materials) and examination fees paid for examinations required to obtain a professional status ( e.g. law bar or C.A. exam) or to be licensed to practise a profession or a trade in Canada are now eligible expenses to claim non-refundable tuition tax credit.
CHANGES TO ONTARIO PROVINCIAL TAX CREDITS
EFFECTIVE JULY 1, 2012
The Ontario Sales Tax credit, Ontario Energy and Property Tax credit, and Northern Energy Credit (currently paid quarterly) ar combined in a new Ontario Trillium Benefit and padi monthly.
Ontario Children's Activity Tax Credit
You can claim the Children’s Activity Tax Credit (CATC) if you were a resident of Ontario and you paid fees that relate to the cost of registering your or your spouse's or common-law partner's child in a qualifying children's activity program in 2011. The child must have been born in 1994 or later or, if eligible for the disability amount, in 1992 or later. For each eligible child, you can claim the lesser of $500 and the amount of eligible expenses paid for qualifying programs for that child in 2011.
– If the child qualifies for the disability amount and is under 18 years of age at the beginning of the year, and at least $100 was paid for registration or membership fees for qualifying programs for that child in 2010, you can claim an additional $500 for that child.
BASIC PERSONAL AMOUNT
The new basic personal amount, the spouse, common-law amount, and the eligible dependent amount are increased from $10,382 to $10,527.
AGE CREDIT
The age credit amount is $6,537. The net income level at which the credit starts is $ 32, 961 or less. The age credit will be adjusted accordingly if your income is more than this amount but less than $75, 480.
PERSONAL TAX BRACKETS
Federal Tax Rates
The lowest personal income tax bracket for 2011 is up to $41,544 at a rate of 15%. The next bracket for 2011 is up to $83,088 at a rate of 22%. The last bracket for 2011 is up to $128,800 at a rate of 26%. Any income over $128,800 is at a rate of 29%.
Provincial Tax Rates
The lowest personal income tax bracket for 2011 is up to $37,774 at a rate of 5.05%. The next bracket for 2011 is over $37,776 at a rate of 9.15%. The last bracket for 2011 is over to $75,550 at a rate of 11.16%.
Credits continued for the 2011 tax year
WORKING INCOME TAX BENEFIT
The Working Income Tax Benefit (WITB) is a refundable tax credit intended to provide tax relief for eligible working low-income individuals and families who are already in the workforce and to encourage other Canadians to enter the workforce.
HOME BUYERS' PLAN
Effective January 28, 2009 the RRSP withdrawal limit for the Home Buyers' Plan is increased from $20,000 to $25,000 for a single owner and from $40,000 to $50,000 for two joint owners.
FIRST-TIME HOME BUYERS
First-time home buyers purchasing a qualifying home after January 27, 2009 may claim a non-refundable First-Time Home Buyers Credit (FTHBTC) of $750 for the year of acquisition.
To qualify you or your spouse or common law partner acquired a qualifying home and you did not live in another home owned by you or your spouse or common law partner in the year of acquisition or in any of the four preceding years.
FOR INDIVIDUALS ENTITLED TO CLAIM DISABILITY TAX CREDIT
The same credit may be claimed for a home acquired by or for an individual entitled to claim a disability tax credit, provided it is more accessible or better suited for the individual and also used as a principle residence within one year from date of acquisition.
For further information on non-refundable credits, please follow the link below to Canada Revenue Agency;
TAX FREE SAVINGS ACCOUNT
A Tax-Free Savings Account (TFSA) is a new way for residents of Canada to set money aside, tax-free, throughout their lifetimes.
Contributions to a TFSA and the interest on money borrowed to invest in a TFSA are not tax deductible. The income generated in the TFSA is tax-free when withdrawn.
THE REGISTERED DISABILITY SAVINGS PLAN
A Registered Disability Savings Plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit. Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59 years of age. Contributions that are withdrawn are not to be included as income for the beneficiary when paid out of a RDSP. However, the Canada disability savings grant, Canada disability savings bond and investment income earned in the plan will be included in the beneficiaries income for tax purposes when paid out of the RDSP.
Note:
The deadline for opening a RDSP, making contributions and applying for the matching grant and the income-tested bond for the 2011 contribution year is February 28, 2012.
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