Federal

Employee Home Office Deductions – The Covid work-from-home deduction is no longer. 2022 was the last year for this deduction.

For 2023 and future years, only employees who are required to provide an office in their home
by their employers will qualify for this deduction. Employees must have Form T2200, Declaration of Conditions of Employment, signed by their employer.

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2200.html

Equipment and capital asset purchases – Purchases of equipment and other assets that we would typically depreciate, if purchased after January 1, 2023, may qualify for a 100% deduction in 2023. Termed “immediate expensing”, eligible businesses (sole proprietors, partnerships, and corporations) may fully deduct such purchases, to a maximum of $1.5 million. The property must become available for use before 2025 and the measure applies to most but not all types of capital property.

All Taxpayers – Penalties for late filing are increasing. Beginning in 2024, the late filing penalty increases to 10% of the unpaid tax due, plus 2% of this unpaid tax for each complete month that the return is late, up to a maximum of 20 months. The amount owed compounds daily, and the interest comes on top of other penalties for paying late. Filing on time is more important than ever. Even if you owe money and cannot afford to pay or require a payment arrangement, it’s best to file on time.

TFSAs – The contribution limit for 2023 increased to $6,500 and has risen to $7,000 for 2024.

OAS Income Limits – For the 2023 tax year, if your taxable income was over $81,761, you would need to repay some of your OAS (Old Age Security). The repayment amount may have been withheld from your OAS payments already, or it may be calculated on your tax return if you received more than you qualified for based on 2023 income.

If your taxable income was over $134,626, you would not be entitled to any OAS payments. Under CRA’s 2022 Affordability Plan, seniors aged 75 and over saw an automatic 10% increase of their Old Age Security pension, as of July 2022.

First Home Savings Account

Brand new for 2023 – the First Home Savings Account operates like a hybrid of the RRSP and TFSA accounts. Funds contributed are tax deductible (similar to RRSPs), while the income earned in the plan is not taxable (similar to TFSAs).

A summary of important points:

• Open a plan at your financial institution or with a private broker. Banks, brokerages, insurance, and trust companies all offer such plans.
• Plans may be opened by qualifying individuals over 18 and under age 71.
• Must not (neither you nor your spouse) have owned a “qualifying home” in the previous 4 years.
• Current limit on annual contributions and deductions is $8,000.
• Lifetime limit on contributions is $40,000.
• Funds not used for home purchase can be transferred to your RRSP. Such funds will then be taxable when you make withdrawals from your RRSP.

There are many more details: CRA has many rules about what investments are permissible, penalties on excess contributions and more.

Full information can be found here:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html

Canada Dental Benefit

This is a brand-new program; applications begin in the spring of 2024.

Most details can be found here:

https://www.canada.ca/en/revenue-agency/services/child-family-benefits/dental-benefit.html

https://www.canada.ca/en/services/benefits/dental/dental-care-plan.html

Highlights:

To qualify:

• Family net income must be under $90,000 and you must not have insurance that covers dental care.
• MUST have filed a 2022 tax return.

How and when to apply:

• Over age 70? CRA expected to send a letter by March 2024.
• 65 to 69 years of age – online applications will be available in May 2024.
• Adults with a valid disability tax credit and children under 18, applications begin in June 2024.
• Have kids under age 12? Low income? You may already be covered for your children, there was a temporary benefit available before the program ramped up to help low-income families with children.
• Sun Life is managing the program for the federal government. If you qualify, and apply online with CRA, they will forward your information to Sun Life, and you will receive a welcome package with details about your coverage.
• All applications must be submitted this spring, before June 30th.
• Start date of the insurance depends on your age group and situation and will be explained in the welcome package. Insurance coverage BEGINS once you are approved and have been contacted by Sun Life.