- The new tax rates and income brackets as shown on Schedule 1 are as follows:
|more than $127,021
- The personal basic amount has increased to $10,382.
- The maximum age amount has increased to $6,446. If the taxpayer’s net income exceeds $32,506, this credit is gradually reduced and reaches NIL at a net income of $75,480
- The spousal amount and the amount for an eligible dependant have increased to $10,382.
- The maximum amount for an infirm dependant age 18 or older has increased to $4,223 per dependant.
- The maximum eligible earnings for CPP/QPP purposes is $47,200. The rate respecting CPP/QPP contributions is 4.95%.
- For Canadian employees (except Quebec) the maximum amount of eligible earnings for employment insurance purposes is $43,200. The employment insurance premium rate remains unchanged at 1.73%
- The maximum amount of eligible earnings for employment insurance purposes for a Quebec resident is $43,200. The employment insurance premium rate is at 1.36% (maximum premiums of $587.52).
- The maximum amount of eligible adoption expenses has increased to $10,975.
- The pension income amount remains unchanged at $2,000.
- The maximum amount eligible for the calculation of the caregiver amount is $4,223 per dependant.
- The disability amount has increased to $7,239, and may be increased by a maximum supplement of $4,223 (workchart 316).
- The maximum medical expense threshold (3% of net income) required to reduce total medical expenses has increased to $2,024.
- The maximum amount for the Canada employment non-refundable tax credit has increased up to a maximum of $1,051.
- The non-refundable tax credit for children under 18 has increased to an amount of $2,101 per child.
- The 2010 budget proposes that separated parents that have shared custody of their children will be able to equally split the monthly payments of the Child Tax Benefit (“CTB”), Universal Child Care Benefit (“UCCB”), and the quarterly GST/HST credit.
- The 2010 budget proposes to allow single parent families the option of declaring the UCCB on either the parent’s return or to tax the sum on the return for the individual for which the eligible dependant amount was claimed.
- Starting in 2010, the Canada Revenue Agency will no longer allow as medical expenses cosmetic procedures that are done solely for cosmetic purposes. However, the same procedures will qualify if the patient required the treatment for medical reconstructive purposes such as surgery to ameliorate a deformity arising from, or directly related to a congenital abnormality, a personal injury resulting from accidental trauma or a disfiguring disease.
- The 2010 budget also proposes to extend the existing RRSP rollover rules to allow a rollover of a deceased individual’s RRSP proceeds into a registered disability savings plan (“RDSP”) of a financially dependent infirm child or grandchild.
- The 2010 budget proposes to clarify that a post-secondary program that consists principally of research otherwise eligible for the Education Tax Credit and the scholarship exemption will be taxable for post-doctoral fellowships.
- According to the 2010 budget an amount will be eligible for the scholarship exemption only to the extent it can reasonably be considered to be received in connection with enrolment in an eligible educational program for the duration of the period of study related to the scholarship.
- Effective March 4, 2010, 4:00pm EST (the “Effective Time”), in order to allow employees stock option deductions on their personal income tax returns, employers with “cash-out” stock option plans may have to provide written proof that their company has not taken any deduction in consideration of such plans.
- The 2010 budget also proposes special relief for tax deferral elections on stock options for taxpayers who elected under the current rules to defer taxation of their stock option benefits until the disposition of the optioned securities.
- For U.S. social security benefits received on or after January 1, 2010 the 2010 federal budget proposes to reinstate the 50% inclusion rate for Canadian residents in receipt of U.S. social security benefits since January 1, 1996 and for their spouses and common-law partners who are eligible to receive survivor benefits.
- The 2010 budget proposes that the Mineral Exploration Tax Credit be extended for one year for flow-through share agreements entered into on or before March 31, 2011. Funds raised with this credit during the first three months of 2011 can support eligible exploration until the end of 2012.
- The maximum amount tax credit for sport and recreation per child remains unchanged at $500, plus a $500 supplement for children under 18 with disabilities.
- The education amount for part-time studies and the textbook amount remain unchanged at $120 and $20 per month respectively.
- The education amount for full-time studies and the textbook amount remain unchanged at $400 and $65 per month respectively.
- The maximum amount for the refundable medical expenses supplement (line 452) has increased to up to a maximum of $1,074.
- The Home Renovation Tax Credit has not been renewed for 2010.
- For 2009 and subsequent years, a taxpayer may claim the new non-refundable Home Buyers’ Tax Credit, based on an amount of $5,000, for a qualifying home acquired after January 27, 2009.
- The maximum Home Buyers’ Plan (“HBP”) amount that can be withdrawn from an RRSP under the HBP has increased to $25,000.
- With respect to the Investment Tax Credit, the deadline to claim the mineral exploration tax credit on qualifying expenses renounced under the flow-through share agreements was extended to March 31, 2010.
- Eligible dividends are taxable at 144% with a federal dividend tax credit of 17.9739%. Dividends other than eligible dividends are taxable at 125% with a federal dividend tax credit of 13.3333%.