Your Money Matter

1. No changes were made to the basic personal amounts and indexing that an individual can have of income before being taxed. For federal tax calculation, that brings the basic personal amount up to $10,382, with the top bracket rate applicable at $127,021.
    
2. There was no extension to the popular home renovation tax credit, nor were there any attempts to offer similar programs.
    
3. The existing stimulus plan introduced at the height of the economic downturn has not been prolonged or cut back. It will be allowed to run its course in the year to ensure economic growth remains on track.
    
4. Major spending cuts will be allocated to government administration costs, defense and international aid.
    
5. Proposed changes to the RRSP/RRIF rollover rules to include the Registered Disability Savings Plan (RDSP) where a rollover after death of the plan owner can be made to a financially dependent recipient’s RDSP up to a maximum of $200,000 minus any existing contributions to the RDSP. The Canada Savings Deposit grant (CDSG) and the Canada Savings Deposit Bond (CDSB) would not qualify on this type of rollover. However the Budget proposes to introduce a new 10 year carry forward of CDSG and CDSB entitlement, retroactive to 2008 when the RDSP was introduced.
    
6. Proposed changes to the Universal Child Care Benefit (UCCB) came from highlighting a disparity issue between one-parent and two-parent families receiving the UCCB. For two-parent families, the UCCB is included in the income of the lower-income spouse. A single parent has no choice but to use his or her income. The proposal would allow a single parent the option of including the aggregate UCCB in the parent’s income or in the income of the dependent for whom an eligible dependent credit is claimed. This is expected to reduce and possibly eliminate the tax otherwise applying on the benefit. To improve the allocation of child benefits between parents who share custody of a child, the Budget proposes to allow an apportionment of the Canada Child Tax Benefit (CCTB) (UCCB) and GST/HST credit amounts between the parents.
    
7. Employee Stock Options taxation rules would be tightened to prevent the stock option deduction by the employee and a deduction by the employer.
    
8. US Social Security Benefits proposal to reinstate the 50% inclusion rate for Canadian residents who have been in receipt of US social security benefits since before January 1, 1996, and for their spouses who are eligible to receive survivor benefits.
    
9. Cosmetic surgery qualifications for tax credit redefined.
    
10. Online notices from CRA for notice of assessment with taxpayer’s approval.

Source: Renaissance Investments (Jaime Golombek - Tax Expert) and Fidelity Investments (Peter Drake - Vice-President Retirement & Economic Research)


Theresa Wever and the Money Concepts Team.

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