2017 Changes in Personal Taxes

It’s tax time again! This post is to provide you with the information you need to make tax time as painless as possible.  If you have any questions at any time CLICK HERE to book a meeting with one of our advisors.

What’s new for 2017 Personal Tax Returns?

This year as Canadians we are experiencing changes on our tax returns. You can see a comprehensive list of all changes available on the Canada Revenue Agency (CRA) website, for more information.

We’ve identified the following items most likely to affect our clients this year.

Principal residence exemption reporting

This was new last year, but it’s a big, important change so we’re including it again.

As of January 1, 2016, the CRA will only allow the principal residence exemption to be claimed where you report the sale and the designation of your principal residence on your income tax return.

The CRA may accept a late-filed designation in respect of a principal residence, but a penalty could apply. The penalty will be the lesser of the following amounts:

  • $8,000; and
  • $100 for each complete month from the original due date of the relevant income tax return to the date that your request for a late-filed designation is made in a form satisfactory to the CRA.

If you sold your principal residence in 2017 and intend to claim the principal residence exemption, make sure that the disposition is reported on your income tax return.

Take note that for dispositions in 2017 and subsequent years, you also need to complete Form T2091 (IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust).

Reporting this disposition will require the following information:

  • year of acquisition
  • proceeds of disposition
  • address of the property being designated as a principal residence
  • total number of years the property was owned
  • number of years that the property is designated as a principal residence.

This new reporting requirement generally applies for deemed dispositions of a principal residence as well, including dispositions arising because of a change in use.

Tuition tax credit: Extended to non-post secondary skills courses

The tuition tax credit was available only for qualifying post-secondary programs. Realizing the value of many other types of skills-based training, the feds have expanded the credit to include fees paid to Canadian institutions for occupational skills courses not offered at the post-secondary level.

To qualify, the course must provide the individual with skills (or skills improvement) in an occupation, and the student must be at least 16 years old by December 31, 2017. A nice reward for improving yourself in 2017.

Tax credits no longer available in 2017

  • The Children’s Fitness Tax Credit
  • The Children’s Arts Amount
  • Education and textbook amount

Medical Expenses

Here is a list of deductible medical expenses which are constantly changing to reflect advances in medical care.

This year the government clarified that costs related to reproductive technology use are eligible for the medical tax credit, where such costs are incurred by an individual who requires medical intervention to conceive a child, even where treatment is not on account of medical infertility.

Please note that qualifying costs incurred in the previous 10 years that have not been successfully claimed on your tax return in the past can be claimed if you make an election. A big tax credit opportunity for those expecting to expect.

Disability Credits

In prior years you needed a doctor to sign off on your disability tax credit certification. Now, nurse practitioners have been added to the list of medical professionals who may certify eligibility of a person for the disability tax credit. Shout out to increasing recognition for nurse practitioners in our medical landscape. (We love you. Thank you for taking care of us.)

Canada Caregiver Amount

The Canada Caregiver Amount is new and replaces all three of these amounts as of 2017

  • The Family Caregiver Amount
  • The Caregiver Amount or
  • The Amount for Infirm Dependants age 18 or older

If you have claimed these credits in the past, this change affects you. Please contact one of our advisors to discuss criteria for eligibility.

New CRA Program

And finally, it is awesome seeing barriers to compliance being removed Canadians. “File My Return” announced by National Revenue Minister January 8th, is a program that allows Canadians with low or fixed incomes that don’t change from year-to-year to file their returns by answering a series of questions over the telephone. CLICK HERE to read more about that program.

If you have any questions about tax changes for 2017, or how they may apply to your situation, please contact one of our professional advisors.

Happy tax season!