(File Photo)

Lower taxes, new RRSP rules among 2020 changes in Canada

$75 credit for digital news subscriptions and Alberta now has a federal carbon tax

Federal changes coming into effect Jan. 1 will lower taxes for most Canadians and affect retirees, recently separated individuals who want to use their retirement savings to buy a home, and digital news consumers.

The basic amount most Canadians can earn tax-free is going up on Jan. 1, resulting in slightly lower federal income taxes.

The increase in the basic personal amount was promised by the Liberals during the federal election campaign and is being phased in over four years until it reaches $15,000 in 2023.

For this year, the exemption amount will increase from $12,069 to $13,229. That will result in federal income tax savings of $113 in Quebec and $138 in the rest of Canada, according to the Canadian Taxpayers Federation.

The benefit will be lower for anyone earning more than $150,473 during the year and will be reduced to zero for Canadians with incomes above $214,368.

The tax cut will also be offset on individual paycheques by an increase in Canada Pension Plan premiums of up to $97, the CTF calculated. At the same time, employment insurance premiums will decrease, producing savings of about $20 for workers outside of Quebec, where the EI premium benefit will add up to $48 for some individuals.

Overall, residents of Ontario and Quebec earning less than $100,000 annually will see net savings of between $55 and $116, the federation estimated.

Also effective Jan. 1, Canadians experiencing a breakdown in their marriage or common-law partnership can qualify to withdraw money from their registered retirement savings plan, without incurring a tax penalty, to buy a home.

The Finance Department said individuals who make a withdrawal in the year a breakup occurs, or in the four preceding calendar years, can access the Home Buyers’ Plan, even if they are not a first-time home buyer.

It allows first-time home buyers to withdraw up to $35,000 from an RRSP to put toward a down payment without having to pay tax on the withdrawal.

KEEP READING: Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets, commission says

Among the other federal tax changes coming into effect:

— Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.

— Certain journalism organizations operating as not-for-profits will be allowed to register to receive donations from Canadians who can claim the amount for a charitable donation tax credit. Businesses donating money can also apply for tax savings.

— Two new types of annuities are being permitted under the tax rules for certain registered plans to provide Canadians with greater flexibility in managing their retirement savings.

— And, the federal carbon tax is being implemented in Alberta. The $20-per-tonne charge for carbon emissions will add to the cost of gas, diesel and heating fuels. Albertans had been paying a provincial carbon tax until it was abolished by the UCP government less than two months after the party won the Alberta election in the spring. Canadians in other provinces are already paying some form of carbon tax.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

Kelowna man injured during arrest sues RCMP

Supreme Court civil claim alleges Dustin Blondin was the victim of an ‘unprovoked attack’

United Way celebrates seven decades of impact in Southern Interior

Organization sees issues with poverty, mental health and addictions, heighten during the pandemic

Okanagan rental housing market facing challenges due to COVID-19

The impact on real estate markets remains a wildcard

Two new COVID-19 cases reported in Interior Health

The total number of Interior Health cases since the beginning of the pandemic is now at 522

B.C. records 98 more COVID-19 cases, most in Lower Mainland

One new senior home outbreak, Surrey Memorial outbreak over

PHOTOS: Ghost sighting in Vernon’s Polson Park

Mom and daughter photoshoot brings joy and laughter to bystanders

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

PHOTOS: 2nd calf in a month confirmed among Southern Resident killer whale pod

Center for Whale Research said they will eagerly await to observe the calf to evaluate its health

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Parks Canada not responsible for Mount Kobau blockade

Nearby residents have been vocal about plans to turn the area into a national park

97 distressed horses, cats and dogs seized from farm in Princeton

RCMP assisted as BC SPCA executed search warrant

$250K reward offered as investigation continues into Sea to Sky Gondola vandalism

Police also asking for specific footage of Sea to Sky highway around time of incident

Most Read