So it was Federal Budget Day today, a day when tax accountants wait anxiously for the Finance Minister to speak in the House of Commons, allowing all the media outlets to spill the details of the budget, after being in lock up all day reading this year’s 2oo plus page budget.
Yes, 200 plus pages, but you don’t have to read it, I am going to give you the Approachable Accountant’s Guide to the 2017 Federal Budget.
There was a ton of noise in the machine leading up to this Budget. There were significant rumblings that how Capital Gains are taxed was going to change and this change was going to cost tax payers by increasing the amount of a capital gain included in your income for tax purposes. The good news is this was nowhere to be found ,which is a good thing. A change to how capital gains are taxed would eventually affect most taxpayers, no matter your income level.
While the Budget did not seem to carry a huge announcement on the tax front, there were still changes that you should be aware of. So lets get to them!
Budget and You
The Budget always contains measures that affect individuals, so I am going to start there.
- The Disability Tax Credit is getting a slight change as the Budget proposes to add Nurse Practitioners to the list of Professionals that can complete a Disability Tax Credit application. This is good news for individuals who may not have a Family Doctor. The Disability Tax Credit is non refundable tax credit for an individual that has a severe and prolonged impairment of a physical or mental nature. In order to get the Credit, a Medical Practitioner must complete the application, so you have another avenue for assistance in completing the Application once the Budget has been passed. I almost forgot. Wondering where you can find the form, well clink this link: Disability Tax Credit Application
- Medical expenses related to Reproduction and Fertility procedures and technology will be modified to provide a greater ability to claim the related expenses. The Budget proposes an option for this broader ability to be applied to the previous ten years. If the Budget passes and you have had these type of medical expenses that you did not claim, well, it will be time to submit some T1 Adjustments (yes, you can adjust prior year returns if you missed out on a credit or deduction).
- Canada Caregiver Credit will replace three separate credits which were confusing and cause issues with taxpayers ability to get the credit. A streamlined credit will help families who provide care to a disabled child or an aging parent, spouse or family member that is ill or disabled.
- Tuition Credit will cast its net a bit further under this Budget. Proposed changes to the credit will allow more programs to be eligible for the credit, including occupational skill courses that are offered at a university, college or other post secondary institution. I am going to have to get back to you on this one when more information is available about what makes up an “occupational skills course”. (Don’t worry, I am asking myself right now, what is an “occupational skills course”?)
- Bye Bye Public Transit Credit – the credit for fees paid for bus, subway and trains passes becomes extinct on July 1, 2017.
A couple other interesting points include that you will be paying higher Employment Insurance premiums in 2017 will be going up 5 cents for every $100 of insurable earnings. It means if you earn $50,000 a year, you will pay an extra $25 bucks in EI premiums.
Now, something that will interest those folks who are helping grow Canada’s population, Maternity and Paternity leave under EI can be extended to 18 months. Sounds great but there is a catch…. If you opt for 18 months, your EI benefit will drop to 33 percent of your insurable earnings instead of 55 percent of your insurable earnings for having a 12 month leave. It’s the old struggle, time versus money.
If you want to drown your sorrows over this Budget, that will cost you a little bit more too, as the tax on alcohol has increased and will be indexed in the future.
Budget and Businesses
You might be thinking now that it might have been quicker to read the budget, but I am almost done, I promise.
The Budget addressed specifically private corporations, which is essentially small to medium sized businesses in Canada and looking at releasing policy changes surrounding “tax planning strategies” that provide these businesses with an unfair tax advantage. I will be watching this one closely and provide my thoughts when that Policy hits!
Outside of this one, the Budget moves affect very specific industries and I am not going to go into those right now, but don’t worry, I will address them at a later date, especially if they affect a lot of our clients or you good folks of New Brunswick.
Starting in 2017, you as an employer will be able to send your employee’s T4 electronically without having to get their permission first.
There will be some very interesting programs coming forward to assist with Education and Job Skills, along with Innovation Funding. Once the Programs roll out, we will direct you towards them.
Those are the tax highlights folks. You can head over to the Department of Finance Budget 2017 website for further details about the Economic Outlook and the National Debt.
Thanks for taking the time to read the Approachable Accountant’s Guide to the 2017 Federal Budget. While much shorter (and hopefully more entertaining) than the 200 plus page Budget, its time to flip over to Side D of Eric Church’s Caught In the Act Live album on the turntable.
Until next time,