The recent federal budget was tabled early June. It is mostly a repeat of the budget that was announced in March before our recent election. There were a few items announced that will affect some of us individual tax payers for 2011 and in the future. Here’s a quick summary about them. More questions for me to ask of you next Spring during the 2011 tax season!
Guaranteed Income Supplement
The Guaranteed Income Supplement for very low income seniors will be enhanced. This measure will provide a new top-up benefit of up to $600 annually for single seniors and $840 for couples. This measure will improve the financial security of more than 680,000 seniors across Canada.
Children’s Arts Tax Credit
This is a new non-refundable tax credit based on eligible expenses paid for the cost of registration or membership of your child in a prescribed program of artistic, cultural, recreational or developmental activity.
You can claim expenses up to $500 per year for each child under age 16 (under age 18 if the child is eligible for the disability tax credit). If you spend $500, you can reduce your taxes payable by 15% or $75. The program must be at least eight consecutive weeks.
So ask for and keep your receipts for any art programs, piano lessons, scouts, cadets, etc. If you are not sure, keep the receipt and we can figure it out next spring.
Family Caregiver Tax Credit
This is a new credit for an infirm dependent that will provide up to an additional amount of $2,000 for each of the following non-refundable tax credits: spouse, eligible dependent, amount for children under age 18, amount for infirm dependents age 18 or older; and the caregiver amount.
So if you are already claiming one of these credits, you can claim this additional credit if the individual is infirm (likely already has the disability tax credit on file).
Volunteer Firefighter Tax Credit
There is a new credit based on an amount of $3,000 for volunteer firefighters. To qualify, you must be a volunteer firefighter in the year and you must complete a minimum of 200 hours of eligible volunteer firefighter services with one or more fire departments in the year.
A certification from a fire chief or delegated official within the fire department may be requested to verify the number of hours of eligible volunteer firefighter services you performed for the department. (Fire Chiefs: get this information ready and keep track of the hours of your volunteers!)
The “services” include responding to calls, attending meetings, and participating in training.
The credit of $3000 could lower your taxes payable by $450.
As a volunteer firefighter, you may be eligible for an income exemption of up to $1,000 if you received a payment from a government, municipality, or other public authority for carrying out volunteer firefighter duties. If you choose to claim this exemption, you will not be eligible for the new Volunteer Firefighter Tax Credit. Next year when you have your taxes done, figure out which one is better for you!
Canada Child Tax Benefit – Notice of Marital Changes
For a change in your marital status that occurs after June 2011, you will be required to notify the CRA (Canada Revenue Agency) by the end of the month after the month in which the change occurs if you are receiving CCTB. It used to be 90 days before the CCTB would be changed.
If the change in marital status results in a change to your CCTB, your revised entitlement will be effective in the first month following the month of the change in status. You will receive a notice of redetermination advising you of your revised entitlement. So if your marital status changes, contact Canada Revenue Agency the following month!
Hiring Credit for Small Business
This is a one time credit of up to $1,000 based on the increase in an employer’s employment insurance (EI) premiums paid for 2011 over those paid for 2010. A small business whose total employer’s EI premiums paid for 2010 was $10,000 or less and whose total premiums increased in 2011 is eligible for a credit. The credit is calculated as the difference between these two amounts up to a maximum of $1,000. The CRA will automatically calculate the credit when an eligible employer’s 2011 T4 information return is filed. For those of us that have one or just a few employees it should be a bit of a credit.
Anni Markmann is an independent financial planner and tax professional working, living, playing, and volunteering in our community. Contact her at 422-6631 or firstname.lastname@example.org or at 36 Dawson Road in Ste Anne.