2017 Provincial Supplement Saskatchewan
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Tax Update 2017 Provincial Supplement Saskatchewan 1 Table of Contents Introduction... 3 Saskatchewan Tax Rates... 5 Personal Amounts... 5 Dividend Tax Credit... 5 Active Families Benefit... 5 Saskatchewan Low-income Tax Credit... 7 Graduate Retention Program First Home Plan... 7 Corporate Tax Rates... 8
Tax Update 2017 Provincial Supplement Saskatchewan Tax Update Provincial Supplement Saskatchewan Introduction The purpose of this update is to summarize the tax changes for 2016 affecting residents of Saskatchewan. Read the discussion below before taking the recorded webinar in which these topics will be presented in a PowerPoint format. 3
Tax Update 2017 Provincial Supplement Saskatchewan 5 Saskatchewan Tax Rates The provincial tax thresholds have all been increased by the federal indexation factor of 1.3 per cent. The tax rates for 2016 are therefore: 11 per cent of taxable income less than $44,601; 13 per cent of taxable income between $44,601 and $127,430; and 15 per cent of taxable income in excess of $127,430. Personal Amounts With the exception of the pension income amount, the homebuyers amount and the education amounts, the personal amounts have also been increased by the indexation factor of 1.3 per cent. A summary of the rates for the past three years is shown in Illustration 1. Dividend Tax Credit For 2016, the provincial tax credit for non-eligible dividends has been reduced from 3.4 per cent to 3.367 per cent. This adjustment was necessitated by the federal reduction in the gross-up factor from 18 per cent to 17 per cent and will result in provincial personal income tax on this dividend income remaining unchanged from previous years. The rate for eligible dividends remains at 11 per cent. Active Families Benefit Effective for 2016, the active families benefit has been eliminated. As a result, the SK479 has also been eliminated. This follows the federal government s decision to eliminate the children s fitness and arts amounts (although the federal credits are being phased out over a two-year period and will not be fully eliminated until 2017). CRA information sheet 5008-PC Information for Residents of Saskatchewan
Tax Update 2017 Provincial Supplement Saskatchewan Illustration 1 6
Tax Update 2017 Provincial Supplement Saskatchewan 7 Saskatchewan Low-income Tax Credit The components used to calculate the Saskatchewan Low-income Tax Credit were increased as follows for the benefit period that began in July 2016: The annual basic and spousal/common-law credits have been increased from $243 to $246; The annual child credit has been increased from $95 to $96 per child (for a maximum of two children); and The net income threshold at which the credits begin to be phased out has been increased from $31,878 to $32,301. Families with adjusted family net income between $32,301 and $66,500 will receive a partial credit. The components for the July 2017 to June 2018 benefit period had not been announced at the time of writing. CRA Guide RC4210 GST/HST Credit Including related provincial credits and benefits Graduate Retention Program First Home Plan The first home plan was introduced in May, 2016. It allows participants in the graduate retention program (GRP) to obtain an interest-free loan to use towards the down payment on the purchase of a home in Saskatchewan. The amount they can receive is based on the amount of GRP credits they have available to a maximum of $10,000 as shown in the chart in Illustration 2. They must pay back the loan by using the GRP tax credits they are allowed each year. Illustration 2
Tax Update 2017 Provincial Supplement Saskatchewan 8 The program is open to first-time homebuyers and those who have not owned a home either in the calendar year or the four previous years. Only those who took possession of their home on or after May 1, 2016 may participate. Participants in the first home plan cannot also claim the provincial home buyers amount on line 12 of the SK428. However, their eligibility for the federal home buyers amount on line 17 of the Schedule 1. Applications for the plan can be obtained at this link: http://www.publications.gov.sk.ca/details.cfm?p=79600 Government of Saskatchewan website First Home Plan Open for Application at: https://www.saskatchewan.ca/government/news-and-media/2016/may/26/first-home-plan Corporate Tax Rates The small business income tax rate remains at two per cent for 2016 and the small business income threshold remains at $500,000. The general corporate tax rate on income not eligible for the small business deduction remains at 12 per cent. CRA information sheet 5008-PC Information for Residents of Saskatchewan