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Canadian Tax Change Highlights for 2019

Revised tax forms, a new Canada Training Credit, and enhanced Canada Workers Benefit highlight the changes for Canada this year...

New Look for the Tax Package
Schedule 1 and its Worksheet have moved into the Income Tax and Benefit Return, and line numbers in the return have increased from 3-4 to 5 digits.

Climate Action Incentive
The Climate Action Incentive can now be claimed by Alberta residents on Schedule 14 (as well as residents of Saskatchewan, Manitoba, and Ontario). Residents of New Brunswick will no longer receive Climate Action Incentive payments, as the province is implementing its own price on carbon pollution, and the federal fuel charge will no longer apply in New Brunswick as of April 2020.

Enhanced Canada Pension Plan (CPP) and Quebec Pension Plan (QPP)
CPP and QPP are gradually being enhanced, and workers will make slightly higher contributions in exchange for improved benefits. In 2019 employees will pay an additional 0.15% and the self-employed 0.3%.

Canada Training Credit
The Canada Training Credit is a new refundable credit that can be claimed beginning with the 2020 tax year, in addition to the existing non-refundable tuition tax credit. Commencing in 2019, if you meet certain conditions, you can accumulate $250 per year to be used in calculating the Canada Training Credit Limit, up to a lifetime maximum of $5,000. In future years, you may be able to claim a refundable credit equal to your Canada Training Credit Limit for the year or 50% of eligible tuition and fees paid to an eligible educational institution in Canada, whichever is less. Note though that individuals under the age of 26 or over the age of 65 at the end of a year cannot claim the Canada Training Credit in that year.

Canada Workers Benefit
The former Working Income Tax Benefit (a refundable credit of great help to low-income workers) has been redubbed the Canada Workers Benefit, with increased benefit amounts and an option to include or exclude the tax-exempt part of working income earned on a reserve, or an allowance received as an emergency volunteer, in the calculation of the benefit, whichever is more favorable for the taxpayer. You cannot claim the Canada Workers Benefit if you were enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the year, unless you had an eligible dependant at the end of the year. Note that, as of the 2019 tax year, CRA will require designated educational institutions in Canada to report to them certain information about their students, including months of enrollment, tuition fees, and Social Insurance Numbers (SINs).

Home Buyers' Plan
The maximum amount you can withdraw from your registered retirement savings plan (RRSP) under the Home Buyers' Plan increased from $25,000 to $35,000 for withdrawals made after March 19, 2019. If you are not considered a first-time home buyer for the purposes of the Home Buyers' Plan, and you experience a breakdown in your marriage or common-law partnership, you may be able to participate in the Home Buyers' Plan after 2019 under certain conditions.

Zero-emission Vehicles
If you are self-employed or claiming employment expenses, you may be able to claim capital cost allowance on zero-emission vehicles. Starting in 2019, there is a temporary enhanced first-year capital cost allowance of 100% for eligible zero-emission vehicles. For more information and for the conditions the vehicle has to meet, see Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income, if self-employed. If you are claiming employment expenses, see Guide T4044, Employment Expenses.

Further Reading
Climate Action Incentive
Canada Pension Plan Enhancement
Québec Pension Plan
Canada Training Credit
Canada Workers Benefit

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.