There are not too many changes to the 2018 personal income taxes, but one main item that will affect all Manitoba taxpayers in a good way is the carbon tax rebate.
The official name is the Climate Action Incentive.
Everyone will receive this credit. It will either increase your refund or decrease the amount of taxes you owe. The base amount is $170. Another $85 is added for your spouse, or the eligible dependant if you are a single parent. Plus $42 for each additional child under 18 or other dependant in the home.
And those of us living in rural Manitoba get an extra 10% because we do not have access to public transportation and likely use more fuel than those living in or near Winnipeg.
If you live in Winnipeg and surrounding communities like the RMs of Tache or Ritchot or Springfield, you do not get the extra 10%.
First some explanation of what this credit is for.
In Manitoba the carbon tax will begin April 1 2019. Fuel prices will increase. And everything related to fuel will eventually go up to. We all get our food and other goods using fuel. Maybe more reasons to shop locally and purchase local food and other goods. But I digress.
The new Climate Action Incentive is a refundable tax credit that is intended to help you pay for the increase in your fuel and goods in the next 12 months. And the incentive is for you to decrease your use of fuel.
If you decrease your fuel use (and reduce your carbon footprint), you will be ahead since you will get the rebate and perhaps not use all of it for the upcoming carbon tax.
From a tax issue, my biggest concern will be separated families with shared custody of children. Who gets the Climate Action Incentive? The parents will need to agree. Perhaps they alternate the years?
The credit is too new to determine what Canada Revenue Agency will do, but perhaps like other credits, if the parents cannot agree, then neither parent will receive this new credit (CRA will take the credit back) until the parents can agree.
So if you are a parent with shared custody of your child(ren), be prepared to answer my question: “which of you as parents will claim the new credit?”
As you gather all your receipts to file your taxes, a few quick reminders that in order to claim any deduction or credit, you need proof.
CRA has been more aggressive in reviewing claims taxpayers are making, so be sure you have all of your receipts for all that you claim:
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- – Medical receipts, including proof of payment for premiums to a health plan (direct from your bank account as a deduction from your pay or pension) and proof of any payments the plan did not cover some of your expenses
- – Any employment expenses need all receipts and need authorization from your employer (T2200)
- – Child care: if the provider is an individual, need their name and SIN on the receipt, plus dates and name of child
Most taxpayers have until April 30 2019 to file their 2018 taxes. This is especially important if you find out you have an amount owing. If you are expecting a refund, the date is not important, but you likely want your refund as soon as possible.
Those of you that are self-employed (and your spouse) have until June 15 2019 to file. But if you do have an amount owing, the interest (6% per annum) starts ticking on May 1 2019.
Don’t be late filing your taxes if you owe. The penalty is 5% of the amount owing plus 1% for each month you are late. And if it’s not the first time you are late, the penalties are even worse!
Even if you do not have all your info to file by the deadline, file it with estimated amounts. You can always adjust later.
Happy Tax Season!
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact us at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca