Henderson Partners, LLP

•  change personal tax credit base for both the individual and the spouse/equivalent from $10,100 (as indexed) to $10,320 (from $9,800 for 2008)

• income brackets:
  • 15% - $0 to $40,726 (increased from $38,382 as indexed)
  • 22% - $40,726 to $81,452 (increased from $77,664 as indexed)
  • 26% - $81,452 to $126,264
  • 29% - $126,264 and above

• Tax credit for age – maximum increased to $6,408 with 15% phase out beginning at $32,312 (unchanged) and fully phased out at $75,032 income levels

•  Home Renovation Tax Credit – non-refundable credit on eligible expenses related to the principal residence that are of and enduring nature (typically capital additions or major repairs – routine maintenance does not qualify) of more than $1,000 and less than $10,000 in aggregate, purchased between Jan 28 2009 and Feb 1 2010, to be grouped by family (spouses and children under 18) but can be claimed by any member (or by multiple members) … [i.e. the family shares the $10,000 limit, but $4,000 can be claimed by dad and $5,000 by mom and $1,000 by daughter] – note, this credit is in addition to any other credit available (such as for renovations eligible to be claimed for the medical tax credit – claim both) – non-arm’s length expenditures only permitted if the service provider is GST registered – must be proven with receipts.

• New Home Buyer’s Tax Credit – non-refundable credit based on $5,000 for first time home buyers (no home owned by either spouse in prior 4 years) or for purchasers that can claim the Disability Tax Credit (or for related persons) of qualified homes (same rules as for Home Buyer’s Plan) – not transferrable to spouse

    Child Tax Benefit & National Child Benefit Supplement

• Income means test increased to $40,726 such that the NCBS is eliminated when that income is reached and the CTB begins to be phased out at that income level.

     Working Income Tax Benefit

• to be modified with the assistance of the provincial/territorial governments for implementation with next year’s filing of tax returns

     Home Buyer’s Plan

• limit increased to $25,000

     RRSP/RRIF losses after death

• FMV of plan included in deceased final return, assets transferred to beneficiaries later with a loss … loss can be claimed in the year of death final return – applies where final distribution occurs after 2008

    CCPC Small Business Limit

• Small Business Limited increased to $500,000 effective January 1, 2009
• SRED Expenditure Limit subject to refundable tax credit is $3,000,000, limit reduction based on previous year small business limit

     Capital Cost Allowance

•  M&P Accelerated CCA – Class 43 additions … changes to 2008 budget measures for 2010 and 2011 … continue to use the 50% straight line method rather than the accelerated declining method

• Computers - new equipment otherwise considered for Class 50 (not previously used for any purpose) purchased for use in Canada between Jan 27 2009 and Feb 1 2011 will be allowed a CCA rate of 100% without the ½ year rule [computer tax shelter limitation overrides this rule]

     Acquisition of Control (Time Control Acquired)

• rules related to acquisition of control to be clarified so that the status as a CCPC not be affected on the day control acquired (for acquisitions that occurred after 2005 unless it changes transactions that were structured to benefit from the Federal Court of Appeal case)

     Electronic Filing becoming Mandatory

• For T2s, tax year end in 2010 with >$1,000,000 in gross revenues
• For 2009 T4s, T5s with >50 returns
• Penalties for non-compliance
  • 2010 T2 - $NIL; 2011 T2 - $250; 2012 T2 - $500; after 2012 T2 - $1,000
  • T4s, $250 if less than 50 returns (not slips)
•  Late Filed Information Returns:
  • Formerly lesser of $100 and $25/day late to 100 days max
  • Now lesser of $100 and $10/day (50 or less returns); $15/day (51-500 returns); $25/day (501 – 2,500 returns) … to 100 days max