Elimination of the amount for children under age 18 2015 T1 Income Tax Changes & Other Considerations For 2015, the line 367 amount for children under age 18 for tax years has been eliminated. In place of this credit the government opted to enhance the payments made through the Universal Child Care Benefit program starting in January 2015. The family caregiver supplement remains. Line 367 is now a credit ONLY for children who are under 18 and eligible for the family caregiver amount. 2 Elimination of the amount for children under age 18 2014 Schedule 1: 2015 Schedule 1: Refundable children s fitness tax credit The children s fitness tax credit is now a refundable credit. Starting in 2015, line 365 has been eliminated from Schedule 1, and the children s fitness tax credit has been made fully refundable. The credit is now calculated and claimed on lines 458 and 459. 3 4 1
New item: repeated failure to report income penalty calculation change. Page 9 of the 2015 Income Tax Guide Starting in 2015, there are two important differences in how the repeated failure penalty is calculated. The penalty will only apply when the unreported income amounts are $500 or more. The penalty will be calculated as either 10% of the unreported income or 50% of the understated tax attributable to that income (whichever is less). 5 6 Tax-Free Savings Account 2015 limit is $10,000. 2016 is back at $5,500 and is indexed to inflation for future years. Re-contributions of certain RRIF withdrawals New formula to calculate the annual minimum RRIF withdrawal revised for 2015. The minimum withdrawal amounts for taxpayers of every age have been reduced. Taxpayers are able to recontribute all or part of the excess if they withdrew more than the new minimum amount from their RRIF in 2015. The maximum amount that may be re-contributed cannot be more than the original 2015 withdrawal amount minus the new reduced minimum amount. This must be done before March 1st, 2016. 7 8 2
Page 37 of the 2015 Income Tax Guide Child Care Expenses Line 214 Child care expense deduction for 2015 The dollar limits have increased by $1,000 9 10 Interest paid on your student loans Line 319 Canada Apprentice Loans Starting in 2015, taxpayers who are registered Red Seal apprentices are able to claim the interest they have paid on Canada Apprentice Loans on line 319. Other Changes & Notables Labour-sponsored funds tax credit phase out - Lines 413 and 414 For 2015, the federal LSVCC tax credit rate has been reduced to 10%. This rate is schedule to fall further to 5% for 2016 before the credit is eliminated entirely for 2017. for 2014, the tax credit rate was 15%; for 2015, the tax credit rate is 10%; for 2016, the tax credit rate will be 5%; and after 2016, the tax credit rate will be 0% Mineral exploration tax credit line 412 Extended another year; set to expire on April 1, 2016. 11 12 3
Other Changes & Notables Lifetime capital gains exemption line 254 For the 2014 and subsequent tax years, the Lifetime Capital Gains Exemption increased from $750,000 to $800,000 with indexation after 2014 for inflation. The LCGE limit for 2015 has increased from $800,000 to $813,600. For dispositions of qualified farm or fishing property after April 20, 2015, the LCGE has increased to $1,000,000. Other Changes & Notables Overseas employment tax credit line 426 Budget 2012 introduced the phase out of this tax credit, and will be completely eliminated it by 2016. This phase occurred over four taxation years as follows: 2013 Specified percentage 60% Specified amount $60,000 2014 Specified percentage 40% Specified amount $40,000 2015 Specified percentage 20% Specified amount $20,000 2016 Specified percentage 0% Specified amount $0 13 14 New changes to form T1135 Foreign Income Verification Statement The CRA has implemented changes to Form T1135 for the 2015 and subsequent tax years. The changes will allow taxpayers, who held specified foreign property with a total cost amount of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each such property. If the taxpayer held specified foreign property with a total cost during the year of: $250,000 or more they must complete Part B Less than $250,000 they must complete Part A (or B, if they want to) 2015 T1135 15 16 4
Graduated tax rate for trusts Removal of graduated rate taxation from grandfathered inter-vivos trust, trusts created by a will and certain testamentary trust. Starting in 2016, the top federal tax rates of 29% will be applied to all trusts except for A graduated rate estate A testamentary trust that has a beneficiary who is eligible for the DTC (a qualified disability trust) 17 5