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Who doesn't love checklists? (2016 tax changes)

It’s my favourite time of year again: tax return time!

To kick things off, we’ve updated our Canadian tax return checklist. This checklist is amazing; not only does it list all the documents you might need, but it highlights what’s new and shows you what you can automatically get through CRA’s Auto-fill my return. And, it’s a checklist. Everyone loves checklists.

If for some reason you don’t love checklists (presumably because your heart is made of ice), or if you’re wondering what’s new, here’s what you need to know:

  • Reporting the sale of your principal residence. You now need to report the sale of your principal residence on your tax return. This change is just a reporting requirement and it won’t impact your taxes.1
  • New school supply tax credit. Teachers and early childhood educators can now claim up to $1,000 for eligible school supplies.
  • New home accessibility tax credit. Seniors and those who qualify for the disability tax credit can now claim up to $10,000 for certain types of renovations.

There are several other changes (like the new federal tax rates) that won’t impact how you prepare your return. If you’d like to know more about those changes, I recommend reading the CRA’s roundup.

While NETFILE won’t open until Feburary 20th, SimpleTax 2016 is ready for you to get a head start on your return. Have fun!

1 If your home wasn't your principal residence for all the years you owned it, you'll still be subject to tax on your capital gain. Your capital gain is prorated based on the number of years your home wasn't your principal residence. We do this calculation for you in the app.

SimpleTax for the NES

Today we’re releasing SimpleTax for the Nintendo Entertainment System! We said we could make doing your taxes fun, and we think we’ve delivered.

Now you’re playing with power!

How the 2016 federal budget will impact you

Earlier today the government tabled the 2016 federal budget. While the mainstream media is talking about deficits, the debt-to-GDP ratio, and special interest groups, I want to take a look at how this budget may impact you.

Families with children

Many of the tax measures announced in today’s budget impact families with children. The most significant change is the new Canada Child Benefit (CCB). The CCB is a monthly benefit that will replace the UCCB1 and the CCTB2 starting in July 2016; you’ll continue to receive the UCCB and/or CCTB until then.

The CCB is a non-taxable payment that’s based on your adjusted family income3 and the number of children you have. The CCB phases out as your family income increases. You can use our handy calculator to estimate your family’s monthly CCB payment.4

Enter your family income and number of children to see your estimated benefit.

As expected, the budget also eliminates income splitting for families (the family tax cut) in 2016. If you need a refresher on the family tax cut, here’s the blog post we wrote when it was introduced.

The budget also plans to phase out and eliminate the child fitness and arts amounts. In 2016 the limits for the credits will be $500 (from $1,000) and $250 (from $500), respectively.5 They will both be eliminated completely in 2017.

Students

The budget included several measures relating to Canada Student Loans and Canada Student Grants. These changes are explained in greater detail here.

To fund these changes, the education amount and the textbook amount will be eliminated in 2017.6 The tuition amount (which is based on the actual amount of tuition you pay) won’t be changed. This change will not impact any amounts carried forward from prior year returns.

More changes for 2016

As promised during the election, the government will introduce a teacher and early childhood educator school supply tax credit.

The amounts used to calculate the Northern Residents Deduction will be increased.

This is just a smattering of what was announced today. Other announcements relate to the OAS, GIS, EI, CPP, and more. You can read all about those changes on the Department of Finance’s Budget 2016 page.


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1 The Universal Canada Child Benefit (UCCB) is the the taxable amount of $160 per child under six and $60 per child 6 to 17 that’s paid on the 20th of each month to all families, regardless of income.

2 The Canada Child Tax Benefit (CCTB) is also paid out on the 20th of the month, however this credit is based on your family income. This credit is sometimes referred to as the “child tax credit” or the “family allowance”.

3 Adjusted family income is your family’s net income minus any UCCB and registered disability savings plan (RDSP) income received plus any UCCB and RDSP amounts repaid.

4 This calculator does not yet include the additional amount you’ll receive if your child qualifies for the disability tax credit. This additional amount is up to $2,730 per child eligible for the disability tax credit and the phase-out of this additional amount will be made to generally align with the CCB.

5 If your child is eligible for the disability tax credit, the $500 additional amount for both the fitness and arts amounts will remain in place for 2016.

6 The education and textbook amounts are both set amounts based on number of months you attended a full-time or part-time post-secondary program.