Peter Wiesner, CPA, CALicensed Public AccountantCopyright @ 2020
January 2, 2020
So on January 1, 2020 tax and legal changes have happened that are important to properly plan your affairs. I have provided the top 11 items so far. Remember that Federal and Provincial Budgets still have not been issued for 2020 and could affect these items.
1) You can add $6,000 to your Tax Free Savings Account (TFSA) at this time.
The maximum contributions allowed since 2009 is $69,500 as a continous Canadian residentage 18 or older in 2009.
2) Effective January 1, 2020, the lower rate of Ontario corporate income tax is reduced from 3.5 per cent to 3.2 per cent for small business earnings.
3) The basic amount Federally that you can earn tax-free is going up on Jan. 1, to $13,229. The increase is being phased in over four years until it reaches $15,000 in 2023.
These changes are only for those in the lower income brackets (under $150,473) , the changes could result in tax savings of up to $140 in 2020
4) The Ontario basic exemption as of January 1, 2020 is $10,873 for 2020 up from $10,852 in 2019.
5) No more out-of-country health insurance coverage. Please ensure you obtain Travel Insurance for Abroad and Inter Provincial Travel with Canada.
The Ontario government’s move to scrap its out-of-country health insurance takes effect on Jan. 1, 2020. This means that Ontarians who fall ill while travelling can no longer claim the $400-a-day maximum coverage for inpatient emergency care and the $50-a-day maximum allowed for emergency outpatient services (such as an MRI or a CAT scan) that, until now, were provided by OHIP.
Please note that OHIP coverage was minimal and “inefficient,” given the high cost of medical care abroad – and especially in the United States -- that usually requires private travel insurance.
Per a Harvard study, it reveals that 62% of US bankruptcies are caused from lack or inferior medical coverage. So don’t get caught without Travel insurance and watch medication changes and pre-existing medicals before you leave as you may be denied coverage.
6) The EI rate has come down a bit from 2019 and maximum 2020 EI maximum premiums are $856.36 for an employee. Employer Maximum is $1,198.90. This dropped a few dollars.
7) The CPP rate has increased to 5.25% in 2020 from 5.1% in 2019. Employees will pay $2,898.00 at maximum up from $2,748.90 in 2019.
8) Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.
9) Changes to federal carbon tax rebates
For Ontario residents, the 2020 federal carbon tax rebates, which must be claimed on 2019 income tax returns, are as follows:
Single adult or first adult in a couple: $224
Second adult in a couple or first child of a single parent: $112
Each child under 18: $56
Baseline amount for a family of four: $448
10) Canada Training Benefit
The federal government introduced the Canada Training Benefit to help with disruption in the labor force due to changes in technology. This refundable tax credit is designed to lower the barrier to professional development and to provide financial support to help pay for half of the tuition and training fees. As a worker, you’ll be eligible to receive up to $250 annually as a tax credit. This amount goes into a notional account, which the worker can use for eligible purposes.
To be eligible to accumulate $250 in a year, you must meet the following criteria:
To help make it easier to keep track of your notional account balance, it will be communicated each year on the Notice of Assessment you receive from the Canada Revenue Agency (CRA) after you file your income taxes. In any given year you can claim the lesser of the balance in your notional account and half of eligible tuition and fees paid in the year.
11) MInistry of the Attorney General Changes - Impact on Legal Claims
Amendments to the Courts of Justice Act and its regulations will:
Amendments to a regulation under the Law Society Act will:
If you have any questions or comments, please feel free to contact me.
Peter Wiesner CPA, CA