The Tax Blog for Smart Canadians

Tips and tricks for Canadian tax filers at every stage of life from UFile's tax expert Gerry Vittoratos



Five Important Updates To Know Before You File Your 2016 Tax Return

by Gerry Vittoratos | Jan 25, 2017   Comments:

UFile Five important updates

The start of a new year for most Canadians signals a feeling of optimism, a time of reflection, and a renewed sense of setting goals.

After the 2015 election, the management of Canada shifted from one political body to another, which means Canadians will see and feel noticeable changes in the years to follow.

Recent government changes may be causing more worries than usual for Canadians. The reality is that these changes are most directly felt by the tax system, because public programs and initiatives receive funding from the public purse. As contributors of this pool of government money, the key is to understand what the changes are, how it impacts us directly, and how we can plan ahead.

Here are five important updates to know before you file this year:

Reduced: Children’s Fitness and Arts Credits

The maximum fees allowable per child for these two credits have been reduced in the following way:

  • For the arts amount, maximum fees allowable to claim per child have gone from $500 to $250. This amount is non-refundable, which means that if you have more credits than income tax, you will not be refunded the difference.
  • For the fitness amount, the maximum allowable fees to claim per child have gone from $1,000 to $500. This amount is refundable, which means if you have more credits than income tax, the CRA will refund you the difference.

The credit rate for both of these credits is 15%, which means you can receive a maximum of 15% of your total expenses related to arts and fitness. For more information on allowable fees – expenses that are eligible for a tax credit – visit this page of the CRA website.

Note: Tax Year 2016, what we file this year, will be the last year these credits are applicable. The children fitness & arts credits have been eliminated for Tax Year 2017, what we file in 2018.

New: Home Accessibility Expenses Credit

The non-refundable tax credit allows Canadians eligible for the disability tax credit or over 65 years of age to claim renovation expenses that allow the eligible person to safely access and move around their home. The credit extends to the eligible person’s caregivers, such as their spouse or children, who can also claim the credit. Any home renovated must be owned by the eligible person or caregiver, and the maximum amount of allowable renovation expenses is $10,000. The credit rate is 15%, which means the maximum credit you can receive is $1,500. For more information, visit this page of the CRA website.

New: Eligible Educator School Supply Credit

If you were an educator in an elementary, secondary or a regulated childcare facility in 2016 and hold a teaching certificate, you can claim the expenses incurred for eligible teaching supplies. A refundable credit, this means if you have more credits than income tax, the CRA will refund you the difference. The maximum amount of allowable expenses is $1,000. This credit rate is 15%, which means the maximum credit you can receive back is $150. For more information on which supplies are eligible, visit this page of the CRA’s website.

Eliminated: Family Tax Cut Credit

Introduced in 2014 for families with children under 18 years old, the credit allowed couples with young children to lower the tax bracket for the spouse or common-law partner with a higher taxable income. This was a tax-planning technique, known as income splitting, to ease the tax burden on young families. The family tax cut credit has been eliminated as part of the government’s shift to focus on larger benefits programs.

New: Income Tax Rate Changes

The second personal income tax rate (applicable to folks in the second tax bracket, colloquially referred to as “the middle class”) has been reduced from 22 percent to 20.5 percent. This means that any income gained between $45,282 and $90,563 will be charged 1.5% less income tax than in 2015. Single individuals in this bracket will see an average tax reduction of $330 per year, and couples will see an average tax reduction of $540 per year.

A top personal income tax rate (applicable to high-income earners in the top income tax bracket) has been introduced at 33 percent. This means for every dollar you gained above $200,000, you will be asked to pay 33% in income tax.

If you are a regular contributor to a Tax-Free Savings Account, pay close attention to your 2016 contributions, because the annual limit was reduced from $10,000 to $5,500.

Connect with us on Facebook and Twitter for 2016 tax return and UFile online tax software news and updates.

 

32 comments

Leave a comment
  1. alexander laverty | Mar 07, 2017
    I have a question for ufile. in a joint account tax submission where a husband transfers some of his income to his wife, does Ufile submit the file to the wife's tax file? My 2015 return was not filed in my wife's name    apparently and my deduction in income for the transferred amount was disallowed because there was no file for my wife.
  2. Warren | Mar 06, 2017
    Where in the program is the new "Back-To-School" BC tax credit field??  Can't find it anywhere, even though it's mentioned in the Interview Setup page.
  3. S. Brown | Mar 03, 2017

    Where/how would I claim emergency medical travel insurance?

     

  4. graham maunder | Feb 17, 2017
    I paid last year on the special e mail offer,yet I'm not recognized as paid
  5. graham maunder | Feb 17, 2017

    I paid for 2016 on the special offer you made via e mal in late 2015,yet I'm not recognized and its asking for me to pay..I looked in my mail box I cant see any code for me to enter .

    what do I do?

    thx\Graham

  6. Dan Chapman | Feb 08, 2017
    Are seniors, 65 and over still able to split their income with their spouse?
  7. Jack | Feb 08, 2017
    I just wanted to say thanks for this updated information, I am a regular user of Ufile and enjoy the accuracy  of your program. I have never had to contact you for help because the help files in the program always give me the information I need.
  8. Monty Noble | Feb 08, 2017

    i have had difficulty claiming for the caregiver amount for my father-in-law and i have been trying for three years. I cant get a straight answer to why. Is there a special form i need to obtain?

    Monty Noble

  9. Alexander Toth | Feb 07, 2017

    Please verify for me the paragraph regarding the TFSA amounts: other sources indicate that the permissible amount for 2017 is $5000.00.

     

    Thank you.

     



    416-247-1806

  10. Diane | Feb 07, 2017
    Thank you for this summarized update!
  11. Daniel Demers | Feb 07, 2017
    the tax reduction si good only if these people are the ones whom gain it else where from the government spending
  12. Norman Knapton | Feb 07, 2017
    Have used Ufile since it went online and am well satisfied with it's ease of use. What is the current online price for two returns for tax year 2016?
  13. N. Knapton | Feb 07, 2017
    How  much does Ufile cost online for two returns for 2016. 
  14. Steve | Feb 07, 2017
    Eliminating the Family Tax Cut Credit is just another example of Trudeau and his ANTI-FAMILY agenda! Thanks Justin, your acting doesn't fool me nor did your father.
  15. Teresa Ogle Foreman | Feb 07, 2017
    Thank you for the info!
  16. Doug | Feb 07, 2017
    Thanks for these updates.
  17. Ken Major | Feb 07, 2017
    All individuals whose taxable is between $45,282 and $200,000 get tax savings on the tax bracket from $45,182 to $90,563 and you to have taxable income in excess of $216,000 to lose all of that savings.
  18. James | Feb 05, 2017
    helpful. Thank you
  19. ERNEST PARKER | Feb 03, 2017
    One two occasions over the past couple of weeks I have sent emails to try and find out when I will be able to purchase on-line the 2016 uFile software for my computer.  So far I have only received automated computer responses telling me that I will receive a response shortly.  I'm still waiting.
  20. Dave | Feb 02, 2017
    Hasn't the TFSA annual limit been $5500.00 since 2013?
  21. Bob | Feb 01, 2017
    I used the software for 2015 tax year, had a problem when completing; sent email to UFile support for assistance; got an auto reply message; no contact after that. Not satisfied, need more direct assistance when a customer has issue (s).
  22. Dwayne | Jan 29, 2017
    Thank you. It can be difficult to find this info expressed concisely.
  23. Jim Turner | Jan 28, 2017

    This site is great

    The supplied in formation is very easy to access...it is simplified and quick to find

    There is no necessary search on the latest changes

  24. Barbara Gray | Jan 28, 2017

    what class are those in the $25,000 - $45,282.  I believe they need help more than those making $80,000 - $90,000 ???

    I don't believe there are any subsidies for this range...are there?

  25. Rebecca | Jan 28, 2017
    thank you! this was very helpful and easy to understand.
  26. Louise Green | Jan 28, 2017
    I appreciate getting tax tips, but I do not like the political statements in the opening comments - e.g. "more worry than usual for Canadians". I just want to file my return; I don't want a lecture on government spending. 
  27. Colin Watson | Jan 27, 2017
    Thankyou
  28. clay thistle | Jan 27, 2017
    when help is needed from Ufile, just can't get it.
  29. jentien | Jan 27, 2017
    nothing for seniors in a low income bracket, no extra health care, nothing
  30. konrad motzek | Jan 27, 2017

    We donated $600.00 to the PBS TV STATIONS, which we enjoy watching. We have about US$ 6000 income from dividents.

    How do I claim the US donation in the right way? With  the CAN. Donation I have no Problems.

    I use your UFILE Tax Declarations for many years and I am very happy with the results.

     

  31. Jerry Gorman | Jan 27, 2017
    Hopefully income splitting for seniors has not been changed.
  32. Anonymous | Jan 27, 2017
    these rates used are just federal. look at the provincial rates as well as see where the tax reduction is???

    Leave a comment