On April 12, the Government of Manitoba announced several changes to the 2011 tax year. On that day, I only caught some of the highlights on the news but now have a chance to review it more detail.
I suppose it’s good for those of us in the tax business that the federal and provincial governments keep making our personal income tax returns more and more complicated and harder for individuals to do it on their own. I won’t be short of work any time soon!
There is one new item that the province introduced: a new Children’s Arts and Cultural Activity Tax Credit. Here’s what the announcement said: “In order to foster enriching extra-curricular activities for children a new credit is introduced in 2011 to recognize organized and supervised arts and cultural activities taking place in Manitoba and outside a school’s regular program, including: supervised lessons in music, dramatic arts, dance and visual arts; language instruction; natural environment and wilderness activities; private tutoring in school subjects; and the development of interpersonal skills. Children’s organizations, including Girl Guides, Scouts, 4-H and Cadets, will also qualify.”
Now before you get too excited, remember it is a 10.8% non-refundable income tax credit. Eligible activities costs of up to $500 can be claimed annually for a child under the age of 16, providing a family up to $54 in income tax savings for each child. For a child with a disability under the age of 18 on whom at least $100 is spent on eligible activities, the family qualifies for an additional $54 in income tax savings.
Ok, if you are spending the money anyways it’s good to get an extra $54 in your pocket for the year to offset the costs. But remember, those of you who do not have taxes payable (families with lower income) you may not benefit because it is a “non-refundable credit”.
Start saving all those receipts for all the activities your children are in! I’ll be asking for them next March and April while completing your 2011 tax returns!
There are a couple of other changes that were also announced.
First, the basic credit that all of us get is finally being increased. If you read my article last month, you know that it’s been something on my mind for many years. The current basic credit for Manitoba for 2010 is $8134. Remember it has not increased very much in the past 11 years. The federal amount is up to $10,382 because they have been indexing it to inflation in the past decade.
The Province announced it will be increasing it $1000 over the next four years. So for 2011 it will be $8384 and by 2014 it will be $9134. It’s a step in the right direction, but keep in mind the Feds will be increasing theirs too over the next four years, so the provincial basic credit will still be far behind the federal amount.
So the Province of Manitoba will still get more tax revenue out of all of us. I still have my petition at my office, so please feel free to drop by if you haven’t signed it yet. I hope to deliver it to an appropriate person in May. Finance Minister Rosann Wowchuk – you may be getting a visit from me soon!
There were a couple of other increases to note:
The Primary Caregiver Tax Credit is increased by 25% from a maximum annual amount of $1,020 to $1,275 beginning in 2011.The tax credit was introduced in 2009 to provide recognition and financial supports to Manitobans who serve as volunteer primary caregivers to assist care recipients to live independently in their own homes.
If you provide care to a parent, family member, neighbour or anyone else and you want to find out more, give me a call. We can go back to 2009 and adjust your taxes for the past couple of years if you qualify.
The other change that affects most of us is the Education Credit that is increasing from $650 to $700 in 2011. Most of us that own property have it show up on our property tax bill when we get it later in the year. Those of you that are renting will claim it on your 2011 income taxes next Spring. As long as your rent is $395/month or more for the year, you should be entitled to the full $700 credit.
Just a final note on Personal Income Taxes. I’m pretty sure most of you have filed by now, but for those of you that haven’t, here’s a couple of pieces of information for you.
If you are expecting a refund, there is no penalty for filing late, but it’s in your best interest to get it done soon. Also those of you that receive GST credit and or child tax benefits, you definitely want to file soon.
If you owe CRA, you will face a late filing penalty now too plus interest, so get it filed real soon to keep the amounts to a minimum.
Those of you that are self-employed like me, we have until June 15 to file. I normally file my own on June 14 once I have everyone else done. Of course the interest starts accruing now, but at 5% interest, I’m not too concerned about the interest that has started adding up. I did send Canada Revenue Agency some money before April 30 just to keep the amount accruing interest down a bit.
It’s been a “taxing” couple of months for me and my assistant, Ruth, and I’m happy that the long days have come it an end. I’m open all year round, so if you have any questions about your taxes, whether I did them for you or someone else did or even yourself, feel free to give me a call or drop by.
Anni Markmann is a tax professional and an independent financial advisor working, living, and volunteering in our community. Contact Anni at firstname.lastname@example.org or 422-6631 or 107 Central Ave in Ste Anne.