By Jennifer Gorman, TurboTax. Originally posted to the TurboTax Blog
Over the past few months numerous changes to the current tax system have been announced. Although most new laws announced in December by the Federal Government do not affect this year’s filings, there are a few previously announced changes that apply to tax year 2015.
Child Care Maximums Raised
For tax year 2015, the cap on child care deductions has been raised. For each child who is eligible for the Disability Tax Credit, the deduction limit is now $11,000. The child care deduction limit for a child who is under seven years of age at the end of the year is now $8,000. Parents of children born between 1999 and 2008 can now claim up to $5,000 in childcare expenses.
Refundable Children’s Fitness Credit
Tax year 2014 saw the doubling of the Children’s Fitness Credit from $500 to $1000. For 2015 returns, eligible children’s fitness fees are now refundable up to $1000. The deduction has moved from the non-refundable credits schedule 1 to the T1 General refund/balance owing section. This is great news for parents, especially those who may have previously not seen the tax benefit from such expenses. Individuals who have enough deductions to bring their tax owing to zero will now receive a refund of their children’s fitness fees. In past years, if your tax owing was zero, the credit was wasted.
Enhanced Universal Child Care Benefit
The initial change to the UCCB came last July when all parents with children under 18 began receiving monthly benefits. Part two of the enhanced UCCB program will be seen on your tax return. In previous years, a non-refundable credit named the “amount for children” was granted to parents. The credit was worth $2,255 per child under 18. That credit is no longer available.
Lifetime Capital Gains Exemption on QFFP
For qualified farm or fishing properties (QFFP) disposed of after April 20, 2015, the lifetime capital gains exemption has risen from $813,600 to $1,000,000. Because capital gains are taxed at a 50% rate, this translates to a bottom line difference of $93,200 for claiming lifetime capital gains on QFFP only. Qualified small business shares not related to farming or fishing remain unchanged.
Small Business Job Credit
Employment Insurance premiums are paid by both employers and employees. If you are the owner of a small business and have employees, you may see a refund of a portion of the Employment Insurance premiums you pay as an employer. The Small Business Job Credit applies to small businesses whose employer share of EI premiums is less than $15,000 annually. It translates to 39 cents per $100 of insurable earnings. There’s no application for the credit; CRA will do the math for you based upon the T4’s submitted for your employees. If you are entitled to a refund of EI premiums, you will automatically receive either a direct refund or the amount will be applied to any outstanding balance in your business’s payroll account.
TurboTax makes it easy for you to get your taxes done by staying up to date on all the latest tax credits and deductions, so you don’t have to. To learn more about the tax law changes that took effect on January 1, 2016 and don’t impact your 2015 taxes, click here.
About Jennifer Gorman
Jennifer is a tax expert with more than 20 years experience helping Canadians. She enjoys holding yearly seminars in her hometown in Newfoundland to teach seniors and students how to use TurboTax to prepare their own returns.
