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Canadian Tax Changes for 2016

A new reporting requirement when selling your home, new credits for educators and individuals eligible for the Disability Tax Credit, reduced Children's Fitness and Arts Credits, and elimination of the Family Tax Cut.

Sale of Principal Residence Reporting
Beginning in 2016, you must report the sale of your principal residence on Schedule 3 of your tax return to claim the principal residence exemption. You still do not have to pay tax on the sale if it was your principal residence for all the years you owned it, and you did not use part of it to earn business or rental income (unless that use is relatively small). There is a penalty of up to $8,000 for forgetting to report a sale on time, although CRA is implying it will be lenient in the first year, with the penalty only assessed “in the most excessive cases” (more info).

Eligible Educator School Supply Tax Credit
Teachers and early childhood educators may be able to claim a 15% refundable tax credit for up to $1,000 of unreimbursed supplies purchased during the year. CRA may ask to see certification from your employer attesting to the expenses. It would be a good idea to have this certification on hand before claiming the credit, along with receipts for the expenses (more info).

Home Accessibility Tax Credit (HATC)
Beginning in 2016, if you renovate your home to allow an individual eligible for the Disability Tax Credit to be more mobile or functional within the dwelling, or to reduce the risk of harm within the dwelling or in gaining access to it, you can claim a non-refundable tax credit of up to $10,000 for eligible expenses incurred (more info).

Canada Child Benefit (CCB)
The Child Tax Benefit, National Child Benefit Supplement and Universal Child Care Benefit have been rolled into one program, the Canada Child Benefit (more info).

Children's Fitness and Arts Tax Credits Reduced
The maximum eligible fees for the Fitness Tax Credit have been reduced from $1,000 to $500, and for the Arts Tax Credit from $500 to $250. Supplemental amounts for children eligible for the Disability Tax Credit remain the same. Both credits will be eliminated in 2017 (more info).

Family Tax Cut Eliminated
The Family Tax Cut introduced in 2014 has been eliminated for 2016 (more info).

Northern Residents Deductions
The amounts used to calculate Northern Residents Deductions will increase from $8.25 to $11 per day in 2016. You may be eligible for a deduction if you lived, on a permanent basis, in a prescribed northern or intermediate zone for a continuous period of at least six consecutive months (more info).

The information on this website, and the use of this website, are both provided without warranty of any kind. Income tax rules change every year and some information may be out of date. All readers wishing to take advantage of the information offered here should consult a qualified income tax preparer. In no event will Brad Howland, Howland Tax Services, or this website be liable for any damages, including lost profits, arising out of the information offered on this website, or the usage of this website. All material on this website Copyright © 2001-2024 by Howland Tax Services, Inc. Please contact us for permission to use this material in any form. Website designed and maintained by Brad Howland.