Banka: Tax credit changes coming

The first tax credit from the Liberal federal government to go is the Family Tax Cut.

Gabriele Banka

The Liberal federal government was voted in as a majority government so there will be some changes to the tax act and personal tax credits.

The Liberal’s budget was presented on March 22, and was the first for the new government.

The first tax credit to go is the Family Tax Cut.

That was the ability to split income with your spouse if you had children under 18 and were in a lower income bracket.

One spouse could transfer to the other spouse up to $50,000.

The tax savings were approximately $2,000.

The reason for this credit was because our current tax system does not tax everyone fairly.

For example, a husband and wife who both make 50,000 will have a lower tax bill than those where one spouse makes 80,000 and the other makes 20,000.

There is nothing on the horizon to replace this credit, however, there are some studies in the works to determine how feasible it would be to revamp our taxation system to make it more equitable for all.

The education and textbook non-refundable tax credits will be eliminated after 2016.

Instead, there will be increases to Canada Student Grants and methods of qualifying for grants and student loans will be improved to make them more accessible.

Any unused tax credits will still be available and will be carried forward until used.

Any student can transfer any unused credits to their spouse, parents or grandparents.

The Children’s Fitness tax credit will be phased out allowing only $500 deductible for 2016 and none for 2017.

The Children’s Arts tax credit will be phased out allowing only $250 deductible for 2016 and none for 2017.

Removing these credits will help to simplify the tax code. The new government has reduced the middle tax bracket from 22 to 20.5 per cent to help families in the middle income area.

The new tax credit for 2016 is the Teacher and Early Childhood Educator Supply Tax Credit. This credit is to help teachers who spend their own money for extra curricular activities or projects.

It is a 15 per cent refundable tax credit based on an amount of $1,000 of expenditures.

So if you haven’t been keeping your receipts, now is probably a good time to start.

The Universal Child Care Benefit (UCCB) received from January to June 2016 is taxable.

After that, it has been rolled into the new non-taxable Canada Child Benefit.

Just Posted

Jurors set to deliberate on Kelowna murder trial

“He was mad as a hatter…”

Kelowna couple confront Alzheimer’s disease

Allan and Bettina Collier stay active and take life one day at a time

Stargate armour debuts at Kelowna expo

The Kelowna Fan Experience will feature Jaffa armour from Stargate SG-1

Vancouver artist rocks to fight opioid crisis

Jeremy Allingham is set to bring his guitar-focused rock ‘n roll to Kelowna April 6, Vernon June 9

World Down Syndrome Day: The up side of Down

A Kelowna family’s journey with Down Syndrome: ‘There is tremendous beauty in these kids’

Crook’s Corner

Arts and entertainment highlights this week across the Okanagan

Quebec daycare subsidies offer warning for B.C., study says

Over-55 women more likely to join paid workforce than young mothers

Heavy ice off Canada coast strands pod of dolphins, fixating small town

The small Newfoundland community, Heart’s Delight, is fixated on plight of trapped dolphins

Foreign election interference a reality, says Trudeau after Putin re-election

Trudeau said the heavy use of social media and interference by foreign actors are the new reality in elections.

Canadians joining #DeleteFacebook amid fears of electoral meddling

Privacy experts say numerous Canadians are taking to other social media platforms to join in on the #DeleteFacebook hashtag

Schools close as spring snow storm tracks toward Maritime provinces

Schools are closing across the Maritime provinces as a spring snow storm tracks towards the region.

Son of late Canadian professor fights for mother’s release from Iran

Mehran Seyed-Emami’s father, an Iranian-Canadian professor, died in an Iranian jail after being accused of spying.

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Deadly crash raises questions about Uber self-driving system

The fatality prompted Uber to suspend all road-testing of such autos in the Phoenix area, Pittsburgh, San Francisco and Toronto

Most Read