Tax law changes for 2008

The following is a summary of the various tax changes from the 2008 budgets.

Federal
Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut

Federal

• The new registered disability savings plan (RDSP) (lines 125 and 232) - Income from an RDSP is reported on line 125 and repayments on line 232.

• The new working Income Tax Benefit advance payments (line 415).

• The new tax rates and income brackets as shown on Schedule 1 are as follows:

  Tax Brackets		Rates
  $0	$37,885	15%
  $37,885	$75,769	22%
  $75,769	$123,184	26%
  more than $123,184		29%

  
  

• The personal basic amount remains unchanged at $9,600.

• The age amount is increased to $5,276.

• The spousal amount and the amount for an eligible dependant remains unchanged at $9,600.

• The maximum amount for an infirm dependant age 18 or older is increased to $4,095 per dependant.

• The maximum eligible earnings for CPP/QPP purposes is $44,900. The rate respecting CPP/QPP contributions is 4.95%.

• The maximum amount of eligible earnings for employment insurance purposes is $41,100. The employment insurance rate is now 1.73%.

• The maximum amount of eligible adoption expenses is increased to $10,643.

• The pension income amount remains unchanged at $2,000.

• The maximum amount eligible for the calculation of the caregiver amount is $4,095 per dependant.

• The disability amount is increased to $7,021, and may be increased by a maximum supplement of $4,095 (workchart 316).

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,962.

• The maximum amount for the Canada employment non-refundable tax credit is increased to $1,019.

• The non-refundable tax credit for children under 18 remains is increased to $2,038.

• The maximum amount tax credit for sport and recreation per child remains unchanged at $500.

• The education amount for part-time studies and the textbook amount remain unchanged at $120 and $20 per month.

• The education amount for full-time studies and the textbook amount remain unchanged at $400 and $65 per month.

• The maximum amount for the refundable medical expenses supplement (line 452) has been increased to $1,041.

• Eligible dividends are taxable at 145% with a federal dividend tax credit of 18.9655%. Dividends other than eligible dividends are taxable at 125% with a federal dividend tax credit of 13.3333%.

Newfoundland and Labrador

• The new tax brackets and rates and the surtax are as follows:

  Tax Brackets		Rates
  $0	$30,215	8.2%
  $30,215	$60,429	13.3%
  more than $60,429		16%

  
  

• The personal basic amount is increased to $7,566.

• The age amount is increased to $3,556.

• The spousal amount and the amount for an eligible dependant are increased to $6,183.

• The maximum amount for an infirm dependant age 18 or older is increased to $2,402 per dependant.

• The amount of adoption expenses that can be claimed is increased to $10,211.

• The maximum amount eligible for the calculation of the caregiver amount is increased to $2,402 per dependant.

• The disability amount is increased to $5,106, and may be increased by a maximum supplement of $2,403.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increase to $1,648.

• The dividend tax credit for eligible dividends is set at 6.65%. The dividend tax credit for dividends other than eligible dividends is set at 5%.

Prince Edward Island

• The new tax brackets and rates and the surtax are as follows:

  Tax Brackets		Rates	Surtax rate	Threshold
  $0	$31,984	9.8%	10%	$12,500
  $31,984	$63,969	13.8%
  more than $63,969		16.7%

  
  

• The personal basic amount is increased to $7,708.

• The age amount is increased to $3,764.

• The spousal amount is increased to $6,546.

• The amount for an eligible dependant is increased to $6,294.

• The maximum amount for an infirm dependant age 18 or older remains unchanged at $2,446 per dependant.

• The maximum amount eligible for the calculation of the caregiver amount remains unchanged at $2,446 per dependant.

• The disability amount remains unchanged at $6,890, and may be increased by a maximum supplement of $4,019.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses remains unchanged at $1,678.

• The amount for young children remains unchanged at $100 per month for each child under six years old.

• The dividend tax credit for eligible dividends is set at 10.5%. The dividend tax credit for dividends other than eligible dividends is set at 4.3%.

Nova Scotia

• The tax brackets and rates and the surtax remain unchanged:

  Tax Brackets		Rates	Surtax rate	Threshold
  $0	$29,590	8.79%	10%	$10,000
  $29,590	$59,180	14.95%
  $59,180	$93,000	16.67%
  more than $93,000		17.5%

  
  

• The personal basic amount is increased to $7,731.

• The age amount is increased to $3,775.

• The spousal amount and the amount for an eligible dependant are increased to $6,565.

• The maximum amount for an infirm dependant age 18 or older is increased to $2,551 per dependant.

• The maximum amount eligible for the calculation of the caregiver amount is increased to $4,465 per dependant.

• The disability amount is increased to $4,596, and may be increased by a maximum supplement of $3,144.

• The maximum claim for the Nova Scotia post-secondary graduate tax credit has increased to $2,000.

• The maximum amount (3% of net income) deducted to calculate medical expenses remains unchanged at $1,637.

• The tax credit for sport and recreational expenses for children remains unchanged at $500.

• The amount for young children remains unchanged at $100 per month for each child under six years old.

• The maximum claim for a labour-sponsored venture capital tax credit remains unchanged at $2,000.

• The tax credit for volunteer firefighters residing in Nova Scotia is increased to $375.

• The dividend tax credit for eligible dividends is set at 8.85%. The dividend tax credit for dividends other than eligible dividends is set at 7.7%.

New Brunswick

• The new tax rates and income brackets are as follows:

  Tax Brackets		Rates
  $0	$34,836	10.12%
  $34,836	$69,673	15.48%
  $69,673	$113,273	16.8%
  more than $113,273		17.95%

  
  

• The personal basic amount is increased to $8,395.

• The age amount is increased to $4,099.

• The spousal amount and the amount for an eligible dependant are increased to $7,129.

• The maximum amount for an infirm dependant age 18 or older is increased to $3,965 per dependant.

• The caregiver amount is increased to $3,965.

• The disability supplement is increased to $3,965.

• The disability amount and the amount transferred from a disabled person are increased to $6,797.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,900.

• The dividend tax credit for eligible dividends is set at 12%. The dividend tax credit for dividends other than eligible dividends is set at 5.3%.

Quebec

• The tax rates are unchanged but apply to new income brackets as follows:

  Tax Brackets		Rates
  $0	$37,500	16%
  $37,500	$75,000	20%
  more than $75,000		24%

  
  

• The basic amount is increased to $10,215.

• An additional complementary amount (line 356) is calculated if the total amount of Québec Pension Plan (QPP) contributions, Canada Pension Plan (CPP) contributions, Québec parental insurance plan (QPIP) premiums, employment insurance premiums, and contributions to the health services fund is higher than the complementary amount of $3,095.

• The amount for persons living alone is increased to $1,195.

• The amount for a single-parent family is increased to $1,485.

• The amount for dependent child is increased to $2,740.

• The amount for post-secondary studies is increased to $3,770.

• The maximum amount of employment insurance premiums is $571.29.

• The maximum amount of Quebec parental insurance plan premiums is $272.25.

• The medical expenses tax credit has been increased to $1,032.

• The maximum contribution to the Quebec prescription drug insurance plan (Schedule K) for 2008 is increased to $557.00.

• The income threshold used in the calculation of the tax credit respecting the work premium (Schedule P) is increased to $15,044 for an individual with a spouse and $9,796 for an individual without a spouse.

• The maximum amount of eligible retirement income remains unchanged at $1,500.

• The deduction for workers remains unchanged at $1,000.

• Dividends other than eligible dividends received, will be taxable at 125% with a Quebec dividend tax credit of 8%. Eligible dividends received after March 23, 2006, will be taxable at 145% with a Quebec dividend tax credit of 11.9%.

Ontario

• The tax rates are unchanged but apply to new income brackets and the new surtax as follows:

  Tax Brackets		Rates	Surtax rates	Thresholds
  $0	$36,020	6.05%	20% 36%	$4,162 $5,249
  $36,020	$72,041	9.15%
  more than $72,041		11.16%

  
  

• The personal basic amount is increased to $8,681.

• The age amount is increased to $4,239.

• The spousal amount, the amount for an eligible dependant and the amount for an infirm dependant (age 18 or older) are increased to $7,371.

• The maximum amount for retirement income is increased to $1,201.

• The caregiver amount is increased to $4,092.

• The disability amount is increased to $7,014.

• The disability supplement is increased to $4,091.

• The maximum amount that can be deducted from medical expenses is increased to $1,965.

• The maximum Ontario Health Premium remains unchanged at $900.

• The maximum amount of eligible expenses related to the adoption of a child under 18 years of age has been increased to $10,591 per child.

• The maximum amount of allowable medical expenses for other dependants has been increased to $10,591.

• The dividend tax credit for eligible dividends is increased to 6.7%. The dividend tax credit for dividends other than eligible dividends remains unchanged at 5.13%.

• The income level used by senior couples to calculate Ontario Property and Sales Tax Credits has increased to $24,300.

Manitoba

• New tax rates apply to unchanged income brackets as follows:

  Tax Brackets		Rates
  $0	$30,544	10.9%
  $30,544	$66,000	12.75%
  more than $66,000		17.4%

  
  

• The personal basic amount is increased to $8,034.

• The age amount remains unchanged at $3,728.

• The spousal amount and the amount for an eligible dependant are increased to $8,034.

• The maximum amount for an infirm dependant age 18 or older remains unchanged at $3,605 per dependant.

• The sport and recreation remains unchanged at $500 per child and the maximum for children with disabilities can claim remains unchanged at $1,000 per child.

• The maximum amount of allowable medical expenses for other dependants remains unchanged at $10,000.

• The caregiver amount remains unchanged at $3,605.

• The disability supplement remains unchanged at $3,605.

• The disability amount and the amount transferred from a disabled person remain unchanged at $6,180.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses remains unchanged at $1,728.

• The maximum amount of eligible expenses related to the adoption of a child under 18 years of age remains unchanged at $10,000 per child.

• The maximum education property tax credit is increased to $600.

• The dividend tax credit for eligible dividends is set at 11%. The dividend tax credit for dividends other than eligible dividends is reduced to 3.15%.

• A new non-refundable tax credit, the Manitoba family tax benefit, has been introduced for Manitoba families. It replaces the previous Manitoba family tax reduction.

• A new non-refundable credit, the community enterprise investment tax credit (T1256-1), has been introduced for individuals who invest in eligible community enterprise investment projects.

• A new refundable tax credit, the Manitoba book publishing tax credit, has been introduced for eligible publishers.

Saskatchewan

• The tax rates unchanged but apply to new income brackets as follows:

  Tax Brackets		Rates
  $0	$39,135	11%
  $39,135	$111,814	13%
  more than $111,814		15%

  
  

• The personal basic amount is increased to $12,945.

• The age amount is increased to $4,235.

• The maximum amount for an infirm dependant age 18 or older is increased to $12,945 per dependant.

• The maximum amount of allowable medical expenses for other dependants remains unchanged at $10,000.

• The caregiver amount and the disability supplement are increased to $8,190.

• The disability amount and the amount transferred from a disabled person are increased to $8,190.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,962.

• The child amount is increased to $4,795 per child.

• The senior supplementary amount is increased to $1,118.

• The dividend tax credit for eligible dividends is set at 11%. The dividend tax credit for dividends other than eligible dividends is set at 6%.

• The mineral exploration tax credit for individuals who purchase shares from a mining exploration company has been re-introduced for shares purchased after March 31, 2008.

• A new refundable tax credit, under the graduate retention program (SK-479), has been introduced to provide a tuition fee rebate to eligible post-secondary graduates.

• The graduate tax exemption program ended in 2007. Only unused credits from 2007 can be claimed.

Alberta

• The income tax rate remains unchanged at 10%.

• The personal basic amount is increased to $16,161.

• The age amount is increased to $4,503.

• The spousal amount is increased to $16,161.

• The maximum amount for an infirm dependant age 18 or older is increased to $9,355 per dependant.

• The maximum amount for retirement income is $1,244.

• The maximum amount of allowable medical expenses for other dependants has been increased to $11,053.

• The caregiver amount and the disability supplement are increased to $9,355.

• The disability amount and the amount transferred from a disabled person are increased to $12,466.

• The education tax credit amounts have increased. Students can now claim $188 per month for part-time studies and $628 per month for full-time studies.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $2,088.

• The maximum amount of eligible adoption expenses is increased to $11,053.

• The dividend tax credit for eligible dividends is increased to 9%. The dividend tax credit for dividends other than eligible dividends is reduced to 4.5%.

British Columbia

• The tax rates are unchanged but apply to new income brackets as follows:

  Tax Brackets		Rates
  $0	$35,016	5.24%
  $35,016	$70,033	7.98%
  $70,033	$80,406	10.5%
  $80,406	$97,636	12.29%
  more than $97,636		14.7%

  
  

• The personal basic amount is increased to $9,189.

• The age amount is increased to $4,121.

• The spousal amount and the amount for an eligible dependant are increased to $7,868.

• The maximum amount for an infirm dependant age 18 or older is increased to $4,021 per dependant.

• The maximum amount of allowable medical expenses for other dependants remains unchanged at $10,000.

• The caregiver amount is increased to $4,021.

• The disability supplement is increased to $4,021.

• The disability amount and the amount transferred from a disabled person are increased to $6,892.

• The maximum amount of eligible adoption expenses is increased to $11,643.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,911.

• The basic reduction amount is increased to $381.

• The rate for calculating the BC tax reduction has changed to 3.2%.

• The dividend tax credit for eligible dividends is set at 12%. The dividend tax credit for dividends other than eligible dividends is set at 5.1%.

Yukon

• The unchanged tax rates and new brackets and the surtax are:

  Tax Brackets		Rates	Surtax rate	Threshold
  $0	$37,885	7.04%	5%	$6,000
  $37,885	$75,769	9.68%
  $75,769	$123,184	11.44%
  more than $123,184		12.76%

  
  

• The personal basic amount remains unchanged at $9,600.

• The age amount is increased to $5,276.

• The spousal amount and the amount for an eligible dependant remains unchanged at $9,600.

• The maximum amount for an infirm dependant age 18 or older is increased to $4,095 per dependant.

• The amount for each child who is under 18 years of age at the end of the year is increased to $2,038.

• The pension income amount remains unchanged at $2,000.

• The maximum amount of allowable medical expenses for other dependants remains unchanged at $10,000.

• The sport and recreation amount remains unchanged at $500 per child under the age of sixteen years.

• The caregiver amount is increased to $4,095.

• The disability supplement is increased to $4,095.

• The disability amount and the amount transferred from a disabled person are increased to $7,021.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,962.

• The dividend tax credit for eligible dividends is set at 11%. The dividend tax credit for dividends other than eligible dividends is set at 4.45%.

Northwest Territories

• The new tax brackets and rates are:

  Tax Brackets		Rates
  $0	$35,986	5.9%
  $35,986	$71,973	8.6%
  $71,973	$117,011	12.2%
  more than $117,011		14.05%

  
  

• The personal basic amount is increased to $12,355.

• The age amount is increased to $6,044.

• The spousal amount and the amount for an eligible dependant are increased to $12,355.

• The maximum amount for an infirm dependant age 18 or older is increased to $4,095 per dependant.

• The caregiver amount is increased to $4,095.

• The disability supplement is increased to $4,095.

• The disability amount and the amount transferred from a disabled person are increased to $10,020.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,962.

• The dividend tax credit for eligible dividends is set at 11.5%. The dividend tax credit for dividends other than eligible dividends is set at 6%.

Nunavut

• The tax rates are unchanged but apply to new income brackets as follows:

  Tax Brackets		Rates
  $0	$37,885	4%
  $37,885	$75,769	7%
  $75,769	$123,184	9%
  more than $123,184		11.5%

  
  

• The personal basic amount is increased to $11,360.

• The age amount is increased to $8,520.

• The spousal amount and the amount for an eligible dependant are increased to $11,360.

• The maximum amount for an infirm dependant age 18 or older is increased to $4,095 per dependant.

• The caregiver amount is increased to $4,095.

• The disability supplement is increased to $4,095.

• The pension income amount is increased to $2,000.

• The disability amount and the amount transferred from a disabled person are increased to $11,360.

• The maximum amount (3% of net income) deducted to calculate allowable medical expenses is increased to $1,962.

• The amount of medical expenses you may claim for other dependants remains unchanged at $10,000.

• The amount for young children remains unchanged at $1,200 for each child less than six years old of age.

• The dividend tax credit for eligible dividends is set at 6.2%. The dividend tax credit for dividends other than eligible dividends is set at 4%.

• A new non-refundable tax credit is available to volunteer firefighters. They can now claim a tax credit of $500.