Category: Blog

In March 2019 the Canadian Federal Budget introduced a new tax incentive for subscriptions to digital Canadian News.

You get 15% back as a non-refundable tax credit on spending up to $500. So the maximum value of the tax credit will be $75 year.

The digital news subscription tax credit is available for the 2020 to 2024 tax years. You will be able to beginning claiming the credit on your 2020 tax return.

To qualify the subscription must be with a qualified Canadian journalism organization (QCJO) . This exists to encourage Canadians to support Canadian journalism which has been struggling with competition from international news and social media.

Tax Write-Off upto $55,000 plus tax

Budget 2019 proposed a 100-per-cent write-off for zero-emission vehicles to support business adoption. Eligible zero-emission vehicles include, a motor vehicle that is a plug-in hybrid (with a battery capacity of at least 7 kWh) or vehicles that are fully electric or fully powered by hydrogen, including light-, medium- and heavy-duty vehicles purchased by a business. This measure applies to eligible vehicles purchased and becoming available for use on or after March 19, 2019 and before January 1, 2024. Where the capital costs for eligible zero-emission passenger vehicles (e.g., cars and SUVs) exceeds $55,000, the 100 per-cent write off will be limited to $55,000 plus the federal and provincial sales tax that would have been paid if the vehicle was purchased for $55,000.

Vehicles in respect of which an incentive is paid under the new federal Incentive for Zero-Emission Vehicles Program will be ineligible for the 100-per-cent write-off.

The $5,000 federal purchase incentive: The Class 54 and 55 incentives will not apply where the $5,000 purchase incentive has been paid for vehicles with cost of $45,000 or less. Our understanding is that the incentive will be applied automatically at the vehicle dealer level meaning that only zero-emission passenger vehicles in excess of $45,000 will be eligible for the 100% write-off. The “point of sale” incentive means that it will be necessary to review the vehicle purchase documents to determine whether accelerated CCA is available. Note that there are caps in the number of vehicles which can benefit from the incentive each year

Rules

The new rules mean that instead of being able to amortize/claim 30% on your vehicle purchases we can now claim 100% of the electric vehicle in year one.

The new rules also increase the amount we are allowed to deduct $55,000 plus tax for electric vehicles. The previous limit was $30,000 plus tax.

Disability tax credit

The federal government has added nurse practitioners to the list of medical professionals who can now certify an application form for the disability tax credit. With an estimated 4,500 nurse practitioners across the country, the change is expected to give Canadians with disabilities more options when applying for the tax credit.

Fertility-related expenses

Those who need medical intervention to conceive a child may now be eligible to claim certain expenses, even if they do not have a medical condition. Prior to the change to the Medical Expenses Tax credit in 2017, individuals had to prove medically that they had difficulty conceiving a child in order to get tax relief. The CRA has now expanded eligibility for this tax credit.

What’s more, those who have fertility-related expenses for any of the 10 previous calendar years and have not claimed them can request a change to previous income tax and benefit returns to include these eligible expenses.

In the past decade there has been an increase of Canadians purchasing real estate in the United States.  Many have based on the tax advice of US lawyers and accountants have chosen to invest using Limited Liability Limited Partnership (LLLP).

On May 26, 2016 the Canada Revenue Agency announced that a US LLLP and US Limited Liability Partnerships (LLP) would be classified as corporation for Canadian tax purposes.  This will have significant tax implications for Canadian taxpayers. The CRA understanding that this decision may create hardship for many taxpayers announced that short-term grandfathering provisions which will allow taxpayers to treat US LLLPs as partnerships providing the following conditions are met:

1.  The LLLP or LLP was formed before July 2016 and it carried on business before that time.
2. The taxpayers intended the LLLP or LLP to be classified as a partnership for Canadian tax purposes.
3. The LLLP or LLP and each of its owners has treated the entity as a partnership for Canadian tax purposes and:
4. The LLLP or LLP converts to an entity that the CRA recognizes as a partnership no later than 2018.

If you are involved in an LLLP or LLP you should be contacting your US tax advisor to discuss your situation to ensure that you stay onside.

Do you own foreign property that needs be reported to the Canada Revenue Agency? If so, you may be able to take advantage of a new simplified reporting method.

Did you know?

Taxpayers who own specified foreign property costing more than $100,000 but less than $250,000 throughout the year can now file Form T1135, Foreign Income Verification Statement using a new simplified reporting method.

This simplified reporting method reduces your paperwork while allowing the CRA to continue to address international tax evasion and aggressive tax avoidance.

Important information

All Canadian resident taxpayers are required to file Form T1135, Foreign Income Verification Statement if, at any time in the year, the total cost of all specified foreign property to the taxpayer was more than $100,000 (Canadian).

The Government of Canada is committed to making it easier for you to meet your tax obligations. The CRA has revised the form to now include two parts: Part A features a simplified reporting method for taxpayers who held specified foreign property with a total cost of less than $250,000 throughout the year. This reporting method allows taxpayers to simply check a box for each type of property they held.

Part B continues to provide the detailed reporting method that taxpayers must use if they, at any time during a year, owned specified foreign property with a total cost of $250,000 or more.

Taxpayers who meet the criteria for completing Part A can still use the detailed reporting method in Part B if they wish.

Don’t forget to file your return and Form T1135 on time! Beginning with the 2013 tax year, the period for reassessing an income tax return is extended by three years if a taxpayer has failed to report income from a specified foreign property on their return and Form T1135 was not filed, was not filed on time, or was filed inaccurately.

For more information on Form T1135, go to Foreign Income Verification Statement, or read our questions and answers.

Fast facts for individuals about filing Form T1135 online:

• Launched earlier this year, you can now file Form T1135 online for the 2014 and subsequent tax years.

• Filing Form T1135 online is easy. Certified software and web applications (some of which are free to use) help you every step of the way.

• You can file Form T1135 online with your tax return or separately, but the filing deadline is the same for both.

• Filing online is secure. The CRA uses the same high level of online security as Canadian financial institutions.

• If you need to file Form T1135 for taxation years before 2014, you must file a paper form. Detailed instructions are written on the back of the form.

• We encourage all taxpayers to take advantage of the CRA’s Voluntary Disclosure Program when filing a Form T1135 for prior years.

Stay tuned—corporations and partnerships will be able to file Form T1135 online in the future. We’ll let you know when this service becomes available.