Rajiv Juneja CPA Business Accountant - Edmonton

As years come and go, with them comes new tax laws. For everyday Canadians, business owners and independent contractors, you may see some noticeable differences with your tax rate and what you can claim this year. For example, the small business corporate tax rate has been reduced to 10 percent in 2018 and will go down again to 9 percent come next year. Counting down some of the other major tax changes you may have heard about, here are a few things to look at.

New EI parental sharing benefits.

When both parents agree to share a parental leave, they are now able to claim an additional five weeks of benefits. This was added to 2018’s budget as a supplemental parental sharing benefit.

Eliminating the home relocation loan.

For the first time, no longer can you claim home relocation loans deductions for this year and any year to come.

Higher rates for accelerated capital cost allowance.

For Canadian business owners claiming CCA, they are now able to tap into what’s called ‘accelerated investment incentive’. This provides business owners 150 percent of their normal CCA rate which can be claimed in the year of purchase. Previously, the amount one could claim in the year of purchase was subject to a half-year rule. Simply put, what these business owners can claim has just tripled.

Pension splitting for veterans.

Retirement income security benefits received by veterans are now eligible for pension income splitting. A great detail of this is it’s retroactive to 2015 as well. The amount split is subject to a cap of $103,056 for 2018’s tax return.

‘Working while on claim’ rules.

Working while on claim rules now apply to sickness and maternal benefits. If you’re on maternity and you decide you want to return to work before your EI benefits are set to end, an adjustment needs to be made. Normally, a claimant is permitted to receive 55 percent of their weekly salaries for EI benefits. When they return to work, 50 cents from every dollar they earn must be subtracted. The amount they end up with is subtracted from overall EI benefits.

More medical expenses you can claim.

A taxpayer who has severe mental impairments are now allowed to claim the cost of animal care for a service animal. If you’re animal has not been specially trained however, they’re not eligible.

Climate action incentive.

Residents in New Brunswick, Ontario, Manitoba, and Saskatchewan are now eligible for a tax credit called the ‘Climate Action Incentive’. The average household is eligible for the following: $248 in NB, $300 in Ontario, $336 in Manitoba, and $598 in Saskatchewan. Clients living in rural areas may be eligible for up to 10 percent more than people living in cities, as rural households are likely to use more energy and don’t have the same public transportation options to reduce fuel consumption.

Canada Workers Benefit.

Formerly known as the ‘Working Income Tax Benefit’, the Canada Workers Benefit incentivizes participation in the workforce among low-income individuals. Amounts have increased this year to a maximum benefit of $1,355 to single individuals without children and $2,335 for eligible families.