Last month, the Liberal Government of Canada unveiled the 2017-2018 budget and with that, they revealed some significant changes sure to influence the lives of many Canadians in future tax seasons.
With that being said, while the list of changes were not extensive, there are however likely to be rather impactful. As we approach the end of tax season this year, you will want to read on to learn more about how these recent tax changes are likely to affect you.
Tax Changes: What Has Been Excluded
Public Transit Credit Amounts
The first change to mention relates to the previously included, public transportation amount. While as recent as 2016, these expenses were claimable on tax returns, as of July 1 2017, this will no longer be the case.
Of course this means then that this amount – or at least a portion of it will still be able to be claimed on your 2017 tax return, so you still have time to claim some if this as needed.
First-time Donor Credit Amounts
A second claimable tax credit due to be taken away as 2017 comes to a close, is the first-time donor super credit. While this credit has only been around since 2013, currently it provides a 25% tax credit when Canadians make a $1000 donation or more to a registered charity. The 25% credit however, is only applied to the first $1000.
Furthermore, this amount was also claimable for any similar donations made since 2007. As such, Canadian taxpayers should take advantage of this super credit while it lasts, again remembering to claim any donations made from 2007 – 2017.
Tax Changes: What Has Been Added
Employment Insurance Additions
With Employment Insurance (EI) being classified as taxable income, you will have to claim your EI with a few different exceptions. For example, if you earn more than $64,125 in total net income you may have to repay some of these benefits. On the other hand, if your total income is less than this amount, you will not have to repay the EI benefits you received.
With that being said, there are several key changes made regarding EI benefits. As per the Liberal government, the following changes have been made to the 2017 EI benefits:
- Canadians will now be eligible to take up to 15 weeks off work to support a family member who is recovering from a critical illness or injury.
- Parents of critically ill children (who are already entitled to 35 weeks of benefits) will be able to share these benefits with additional family members.
- Unemployed Canadian workers will now be entitled to return to school for re-training services, without the risk of losing their EI benefits.
- Parental benefits changes have also been made to allow parents to receive these benefits at a lower rate over an extended period of 18 months.
- Female parents will now claim their maternity benefits for up to 12 weeks prior to their due date instead of the current 8 weeks.
All in all, many positive changes have been made to the EI benefits received by many Canadian taxpayers.
Fertility Treatments Now Claimable
One final inclusion made to future Canadian tax systems, will now include the ability to claim fertility treatments. With many Canadians requiring the assistance of reproductive technology, the government has since introduced tax changes that now include more than just a medically infertile diagnosis in order to be qualify for these tax claims.
Moving forward, any woman who requires fertility services to create life, can now claim these costs. Subsequently, any expenses made for reproductive services, which include in-vitro fertilization can be claimed retroactively for up to 10 years.
Combating Tax Evasion
Of course, we can’t forget to mention the extensive measures the government has already taken to shine a light on as well as deter future tax evasion in Canada as well as any offshore movements.
Actions taken in this new plan of attack include, increased teams monitoring and tracking down those who are involved in the promotion of tax schemes, as well as high-risk tax avoidance taking place in Canada as well as internationally.
While these actions are in still in progress, millions of dollars have already been recovered, and these numbers are expected to rise even further.
So how will this affect you ?
Well for anyone who is upfront when filing their taxes, this will not present a largely impactful change. Nevertheless, what it will do is help secure a balance when it comes to the fairness among all Canadian taxpayers.
In the end, there are many changes, some positive, some negative, that will impact many Canadian taxpayers in the near future. If any one of these might affect you, then you will especially want to pay some extra attention when filing your future taxes, as these adjustments can significantly impact your tax returns – not to mention the status of your financial position moving forward.