Haven't filed your taxes yet? Changes to be aware of
If you haven't yet filed your 2016 federal tax return, here are some changes you should be aware of:
The federal government has cancelled income splitting for families. It was a measure that allowed a parent of a child under 18 to transfer up to $50,000 of their income to a spouse, with the credit capped at $2,000. Critics argued it mostly benefited high-income families.
There are also four child benefit tax credits that have ended, for arts, fitness, education and textbooks. That has been replaced by the Canada Child Benefit. But parents of children under 16 are able to pre-pay 2017 arts and fitness programs on their 2016 tax returns as long as total spending for last year does not go over $250 and $500 limits, respectively.
The Canada Child Benefit will instead give families annual benefits based on their income. Parents can get up to $6,400 per year for each child under the age of 6, and up to $5,400 for each child between 6 and 17. The maximum benefit goes to families with an income below $30,000, and goes down gradually as income increases.
You now have to report to the Canada Revenue Agency the sale of a primary residence. Experts say this could signal that the CRA is looking for people who are flipping houses as a form of income, to make sure people are not abusing the principal residence tax exemption.
Other changes will affect life insurance, business owners selling their companies and some mutual funds. You can find more details on CRA's website.